Business Policy and Strategy of Corona: An Analysis

This report analyzes the business policy and strategy of Corona, an Egypt-based chocolate and confectionary company. It includes the background of the company, mission, vision, and strategy, business model, industry analysis, SFAS matrix, TOWS matrix, and the possible effect of alternative strategies on stakeholders.

Business policy and
strategy
Mariam Mounib
Zeina Mounib
Leila El Leithy

Introduction
The business policy describes the scope in which decisions can be taken by the subordinates in the organization. It
encourages the lower level management to deal with the difficulties and issues without referring to the top level
managers every time for the decisions. The business policies are actually guidelines developed by the organization to
regulate the actions of the subordinates. The limits are defined within which decisions are to be made. It also pacts
with the acquisition of the resources within which the organizational goals are mandatory to be achieved. This report
comprises the business policy of the Corona which is an Egypt based company. Corona is a chocolate and
confectionary company. The report defines the background of Corona along with the mission, vision, and strategy of
the company. The business model of the company is also defined. The strategic group of Corona is identified. The
report also includes the industry analysis of the company. The SAFS matrix is discussed and alternative strategies are
identified which were used in the TOWS matrix. Finally, the alternative strategy is chosen and its possible effect is
analyzed on the various stakeholders.

Background of the company
Corona was established in 1919. It is the first confectionery and chocolate company in the Egyptian market. The
company was get nationalised in 1963. Corona has established its image as a quality manufacturer. The company is
identified for its nostalgic portfolio comprising various categories of snacks by the famous brand names such as
Cocoa, bimbo, Biscuits, Wafers, Candies, Chocolate Rocket, Toffees, and Gum. On the other side, chocolate is one
of the popular consumer products around the world. The growth of the chocolate industry over the last years has
been caused in the eastern and western world. It is a popular ingredient for the desserts and meals (Ashish 7-25).
The local and global growth has made the price of the products sensitive. The company targets the people of
twenty-five years and more. The current target market of the company in Cairo, Alexandria and the countries
outside Egypt.
The company is passionate to make everyone happy by its wide range. The confectionery is growing at 5% on the
international level which is faster than other packed food markets.

Company’s mission, vision, and strategy
The mission of the Corona is to provide a high quality portfolio of the products like
chocolates, biscuits, cocoa, and jelly in the Egyptian market. The company believes in
promoting customers and build pleasant moments of joy.
The vision of Corona is to be the challenger as the Egyptian confectionary producer with
the deliberate role in the Middle East and Africa.

Continued...
The strategies employed by Corona are marketing penetration and product development strategy. The marketing
penetration strategy is used to introduce selected products like dark chocolate, white chocolate, light chocolate and
hazelnut chocolate in the current market of the company which is Egypt. On the other side, the product
development strategy is used by changing packaging materials of the previous products in order to make more
attractive and in the various sizes (Fiorino and Bhan 310-322). The objective of the Corona behind employing
strategy is to enhance the brand image by the quality improvement. The company also employ a strategy with the
aim of enhancing market share. The company even make use of the improved distribution channels in order to
enhance availability. The re-pricing method is also used by Corona. The strategies are employed with the aim of
making the company a mega brand in Egypt and in all over the world.

Company’s business model
Corona possesses an extensive portfolio which fulfills the expectations of the customers. The strong market position
gives company high flour. Corona possesses various product ranges. The products of the company are having a top
market share. The business model of the Corona comprises:
Key resources: Corona has a wide range of brands ranging from icons to local favorites. Corona has 40,000 employees
and ranks third among the top ten competitors. The key resources of Corona further comprise raw material,
manufacturing plants, production plans, brand portfolio, distribution channels, brand, recognition, and awards.
Key activities: The key activities comprise marketing, manufacturing, production, food processing, logistics,
networking, quality control, operations, innovations, research and development and producing seasoning ingredients.
Key partners: The key partners who are associated with the company are farming community, suppliers, retail shops,
cocoa producers, alliances, acquisitions, and sponsorships.

Continued...
Value propositions: The purpose of the Corona is to enhance quality of life with the contribution towards good
health. The company even aim to improve the livelihood of the communities connected with the company. It is the
leading beverage company in Egypt. It provides chocolates which are used as an ingredient by the cafes and other
companies (Deuscher 92-119).
Customer relationships: The company has attained effective relationships with customers. The company keeps on
innovating. It has gained the trust of the customers on behalf of the quality provided by the company.
Channels: The channels used by the company are retail stores, media, news, social networks, web sites, call center,
mail order and media contacts (Corné and Beukeboom 58-67).
Customer segment: The customer segment of Corona comprises individuals, families, communities, homes, offices
and massive market.

Identification of the company’s strategic group
Corona’s strategic group comprised of competitor identified as Kraft foods. Kraft food is part of Mondelez
international group of the companies. Kraft is the importer of the global products. The company made its presence
worldwide with the help of strong acquisitions. The biggest acquisition of the company is Cadbury which was made
in 2010. Currently, the company focuses on four categories and nine brands. The company is the market leader in
gum, chocolates, candy, beverages, and biscuits (Kimberly 32-42).
Mars is also identified as one of the strategic group of the company. The growth of the company is marked mainly
by the Egypt region. The bars of the company are sold in two different originations. There are British version and
the American version of the bars. The American version of the mars was stopped in 2002. Mars is liked more of the
youngsters. Twix is the popular chocolate product of Mars.

Continued...
Ganache chocolatier in Egypt offers delicious chocolates. The company also give chance
to the customers to make their own chocolates. The chocolates can be customized in the
form of color, flavor and shapes. The company provides unique kind of experience which
appeals to the customers. The premium chocolates of the company range from bars,
chocolates to the desserts. The company also makes delicious cookies. Agamya is more
preferred out of them.

Industry analysis
The industry analysis is possible with Porter’s five forces. The analysis comprises the five factors given below:
Bargaining power of the buyers: The main buyer’s segment of the confectionery in Egypt includes children and young teenagers. This
segment accounts for 85% of the sales. It sits eh target market of the Corona due to the demographics of Egypt.
Bargaining power of the suppliers: Kraft Cadbury Plc is the market leader in Egypt comprising 13% share in the Middle East. The
company provides eighty products comprising 50% market share of Egypt. On the other side, Mars Inc has attained sales of USD3Bn in
2011 and has a regional office in Egypt. Add on, Nestle, Unilever, and other multination corporations regulate 10% of the market share.
Industry rivalry: The Egyptian confectionery market is a greatly profitable and appealing industry. The demographics of the company
desire to target rural areas. The chocolate confectionery contains 18.5%. The Egyptian chocolate industry is highly productive in spite of
the 2011 stagnation. The Egyptian chocolate industry is desired by the investors as it is capable of maintaining growth. The 2% increase
in the population causes 85M demand for the products of the company.

Continued...
The threat of substitutes: There is an extensive range of the salty, sugary and low calories
confectionary which generates substitution possible. The chocolate substitute companies
hang around similar price and the consumers are quite pricing sensitive. An extensive
range of the products offered by the competitor prices creates high competition
(Davidovich-Pinhas and Marangoni 65-91).
Barriers to entry: The taxes applied to the imported products makes local products in
Egypt more desirable. The economies of scale are enjoyed by the main suppliers with the
Egypt based plants lie Mars and Cadbury. The natural barriers include an image of the
company and apparent satisfaction from the rival products.

Strategic Factors Analysis Summary (SFAS) matrix
The SFAS matrix includes measuring the strengths and weaknesses of the company’s
position. There are various tools which are used as the basis for the strategic analysis of
the business and SFAS is one out of them. It focuses on the internal strengths and
weaknesses along with the external environment of the company. There are various factors
which are critical to developing strengths into the competitive advantage over the
competition. It has a role in improving specific weaknesses which are equally helpful in
hindering efficiency and growth of the company. Corona is required to enhance its internal
operations before worrying about the external business environment (Mark 236-268).

Continued...
Corona has attained strengths in the product quality. The product quality of Corona complies with the ISO 9002. The
company has also achieved strength as a national Egyptian brand. The company is even capable of maintaining
competitive prices. The weaknesses of Corona such as poor marketing research and plans can be improved by the
external recruitments like a sklled marketing manager and social media manager. The company has also lack of
financial sources; it can be made available by the banks and the loan companies. There is involvement of the external
environment as funds cannot be generated within. There is a requirement of the external agency which can provide
funds to the company and the flow of the financial activities can be enhanced. Corona also faces weaknesses in the
form of using the cheap ingredient in the production. There is also poor research and development. The research and
development activities of the companies can be improved by hiring new staff from the external environment. Corona
is also blamed for using the cheap ingredient in chocolate manufacturing. This weakness can be improved by
changing suppliers who assure good quality raw material. The poor packaging can also be improved by making use
of green products which do not harm the environment anymore.

Identification of the alternative strategies used in the TOWS
matrix
As a part of the SO (Strength opportunities) strategies, Corona makes use of the
advertising, product diversification, and media exposure in order to expand company
overseas. The use of social media and technology are an effective technique to
generate awareness of the company overseas. The company can put its advertisement
on Facebook and Instagram. The youngsters are active on these social media
platforms. The target segment of the company also mainly consists of youngsters.

Continued...
The product diversification is also a unique concept in the market. The customers are not interested in buying the
old taste. They want modifications in the taste. The customers like to have unique favors on a regular basis. The
company is also required to update its flavors in order to attain the attention of the customers. The product
diversification is the innovative method which can be used by the company. There are still some countries which
offer only the traditional chocolates. The local companies do not offer unique flavors. On the other side, the
company can even make use of the traditional methods of advertising like on the television, radios, boards,
pamphlets and more (Rodica 663-674). Although the advertisements have taken digital form there is still relevancy
of the traditional modes. The digital platform has more roles in the factors contributing to the expansion overseas. It
is because the franchising company of the host country can contact the company. If the host countries are interested
in conducting activities of the company in the home country.

The possible effect of the alternative strategy on the various
stakeholders
The stakeholders of the company are affected by the activities of the company. The
stakeholders have an interest in the company and are affected by the decisions taken by
the company. The stakeholders of the Corona are in the form of the communities,
consumers, employees, suppliers and the government. The employees have a role in
maintaining the culture of the company. If Corona makes a decision of the product
diversification then they are required to update themselves with the new variety of the
products. Their activities are affected if the company diversifies its product portfolio. It
also results in more responsibility (Lupton, 1-34).

Continued...
On the other side, customers are affected being a stakeholder of the company. It increases the responsibilities of the
customers. The customers are affected by the guidelines of the company revealed in the advertisement. The
company even makes use of social media to advertise its products. The impact of the social media on the customers
is realized as their interest increases towards the company. They like to buy more products from the company after
viewing the appealing advertisements. The community is affected by the operations of the company. The decision of
the product diversification sometimes put a negative impact on the environment. The production of the enlarge
variety of products results in more waste releases. Such wastages affect the community residing in the environment.
The suppliers also got affected if the company takes the decision of expanding overseas. It may not be possible by
the suppliers to deliver raw material in the host country. The suppliers are most affected by such decision (Moonhee
and Auger 729-737).

Conclusion
The business policy of the Corona provides guidelines in favour of the subordinates. The subordinates can take a
decision on their behalf. They do not need the involvement of the senior managers. The company is accomplishing
its mission of providing a high quality portfolio of the products. From the above analysis, it can be concluded that
Corona can successfully accomplish its vision of to be the Egyptian confectionary producer with the considered role
in the Middle East and Africa. The business model of the company comprises key resources, key activities, key
partners, value propositions, customer relationships, channels, and customer segment. The strategic group of the
company comprised of competitors like Kraft Foods, Mars and Ganache chocolatier. The chocolate industry in
Egypt is analyzed with the help of Porter’s five forces. The SFAS matrix has been successful in measuring the
internal strengths and weaknesses along with the external environment of the company. Corona has identified
strategy used in the TOWS matrix. Finally, the possible effects of this strategy have been stated on the different
stakeholders such as employees, customers, suppliers, community and the government.

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