Godiva Strategic Management Analysis

This assignment requires a comprehensive analysis of Godiva's strategic management framework. Students are tasked with applying Porter's Five Forces and PESTEL analysis to evaluate Godiva's competitive landscape, identify strengths and weaknesses, and discuss potential opportunities and threats. The analysis should shed light on Godiva's competitive advantages, challenges, and strategies for future growth and success in the dynamic confectionery market.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Company overview.....................................................................................................................1
TASK 1............................................................................................................................................2
External analysis of GODIVA CHOCOLATIER.......................................................................2
TASK 2............................................................................................................................................7
Internal analysis of GODIVA CHOCOLATIER........................................................................7
TASK 3............................................................................................................................................9
Identification of Competitive strategies......................................................................................9
TASK 4..........................................................................................................................................10
Strategic directions....................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management plays a significant role in every business enterprise. It helps
company in planning, monitoring and analysing all the organizational goals. In simple words, it
is a process of formulating and implementing business goals at workplace on the behalf of
owners. It gives core attention to available resources of company and also helps in assessing all
internal as well as external environmental factors which can affect organization and its
operations. Basically, it helps the business enterprise by providing it appropriate directions so
that it can accomplish its desired objectives in the most effective and systematic manner (Zhou
and Wu, 2011). Main function of strategic management is to develop new policies, design plans
and allocate available resources within all departments so that company can achieve its desired
outcomes in an appropriate manner. This project report is based on Godiva CHOCOLATIER
which is highly popular for its premium chocolates. In this project report, various internal as well
as external environmental factors or challenges which are affecting this company are discussed.
Also, some appropriate frameworks have been evaluated which can help organization in
developing strategic recommendations in terms of future strategic directions and business
expansion methods.
Company overview
Godiva CHOCOLATIER is one of the leading chocolate manufacture companies. It is
established in the United States and was found in 1926. Later, it was purchased by THE Turkish
Yildiz Holding in November 2007. It has more than 600 stores in United States, Canada, Europe
and Asia. Its major products are truffles, shakes, cocoa, chocolate liqueur, dripped fruits, sweets,
biscuits, coffee and some other related items. This organization produces only seasonal and
limited edition chocolates. It attracts a large number of customers by its special and unique
packaging. This enterprise also has license agreements for production of cheesecakes, ice
creams, coffee pods and liqueur which have taste of various chocolate related flavours. To
consider diabetic patients, it produces sugar free products as well (Sakas, Vlachos and
Nasiopoulos, 2014). It has more than 5000 workers which contribute their hard efforts in
producing tasty chocolate items. It has a great presence in Belgium and now a days, it wants to
expand its business in other countries so that it can cover a large market share. In the present
scenario, it is facing various problems because of different micro and macro environmental
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factors. This is the reason; it is giving core importance to its strategic management so that it can
operate business activities in the most effective manner which will result in high financial profit.
By taking the help of various strategic management frameworks, this company can successfully
carry out its internal and external analysis.
TASK 1
External analysis of GODIVA CHOCOLATIER
Strategic management is a wide concept which helps in managing organizational
resources in the most effective manner so that they can help in achieving business goals and
objectives. Also, it provides various strategic frameworks through which company can analyse
all its micro and macro environmental factors which are affecting organizational growth and
development (Nixon and Burns, 2012). Godiva CHOCOLATIER is facing various problems due
to continuous changes in business environment in which it operates. There are two major
concepts through which it can analyse all its micro/macro factors and these are as follows:
PESTLE analysis: This is known as the most effective strategic tool which is used by
different organizations to identify their macro environmental factors. It is highly important for all
organizations to consider external forces while implementing the business plan, strategies and
policies at workplace. Otherwise, they can suffer with huge financial loss. With the help of
PESTLE analysis, Godiva CHOCOLATIER Company can determine all its macro
environmental factors which are putting a huge impact on its current business position at market
place. It involves six components which are as follows:
Political factors: This is known as the most important environmental factor which can influence
positive as well as negative impact on business enterprise and its performance. There is no
stability in political factors of Belgium which affects the organizational growth and development
of Godiva CHOCOLATIER. There are various rules and regulations which are made by the
government and all organisations are obliged to follow them (Makri, Hitt and Lane, J., 2010). In
the present scenario, legal authorities have made various laws such as minimum wages act and so
on to protect and promote the rights of customers. Company also have to follow all legislations
otherwise, it can suffer with various financial losses. It is highly important for it to make all
strategies and policies according to legal rules and regulations.
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Economical factors: It is those forces which involves economic growth, exchange, inflation and
interest rate. Business activities and practices are highly affected by these factors, also it affects
decision making process of every organisation. In present time, income level of UK people have
decreased which force them to do not spend more on goods and services. They purchase only
those products which satisfy their basic needs. This has influenced a very negative impact on
organisational growth and development of GODIVA CHOCOLATIER. But it is estimated that in
future years, income level of UK people will be increased which will also increase the sales
revenue of This organization.
Technological factors: In modern world, all organisation are taking help of technical forces so
that they can operate their business activities and practices in most effective manner. By taking
help of technology GODIVA CHOCOLATIER can improve its production and packing process.
This company have started using new brew machines to blend coffee and cocoa gains. Also, it
use pathogen testing systems. All these system and machines helps it in producing high quality
products and services (Luo, Sun and Wang, 2011). So, it can be said that technological forces
influence positive impact on its organisational growth and development. By using technical
forces within work place this organisation can also improve its strategic position within market
place and also can achieve competitive advantage.
Social factors: It is highly important for all business enterprises to consider social factors such as
population growth rate, age, career attitudes and so on. People of United Kingdom loves
chocolate and they invest a lot on Chocolate items. So, there are huge opportunities for GODIVA
CHOCOLATIER. By providing huge variety of chocolate items it can attract various people and
also can increase its financial profit. But this company also provide liqueur flavoured chocolates
which can hurt cultural issues of some people. So, it is highly important for company to give
core attention to social factor because without considering them it can not build strong image
within market place.
Legal factors: GODIVA CHOCOLATIER is one of the leading chocolate manufacturing
company it do not need anything to protect its brand within market place. But in present time,
UK government has made various legislations regarding heath and social care which force this
company to use all health measures while producing chocolates. Its confectionery products have
various uncertain obesity risks which can affects its business performance (Lucas, 2010). For
making good brand image within market place, it should not produce any liqueur chocolate. If
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company will use alcoholic substance then it can influence negative impact on its business
performance because parents doe not want that their child will consume alcoholic substance.
Also, government bodies restricts those chocolate company who sells alcoholic substance.
Environmental factors: This is known as most important macro environment factors without
these forces no organization can lead to high level of success. It involves various environmental
aspects such as weather, climate modifications and so on. Farming of cocoa beans has been
decreased due to weather's unstable condition and it in impacting huge negative impact on
company. So, it is highly important for organization to focus on environmental issues and
contribute their efforts in resolving them. GODIVA CHOCOLATIER should invest some its
funds in green technologies which are considered as environmental friendly procedures.
Hence, these are some most important macro environmental forces which should be
considered by organization while making any important work related decisions. Apart from this,
there is another concept namely Porter's five forces which helps this company in determining its
micro environmental factors.
Porter's Five forces Model: It is a strategy tool which helps business enterprise in analysing its
internal structure. Mainly, this framework is used by company for analysing market competition.
In modern world, due to globalisation and use of technology market competition is increasing
very fast so it is highly important for all organisations to determine the competitive intensity.
This model helps in evaluating all micro environmental factors which are close to business
enterprise. There are five competitive forces through which should be evaluated by GODIVA
CHOCOLATIER, and these are follows as under:
Threat of new entrants: In present time, there are various new business entities are developing
in market place which provides same products and services as GODIVA CHOCOLATIER
provides. It is difficult for new entities to enter into such competitive market place. Market is full
of highly developed confectioner companies such as Mars, nestle, Ferrero, Kraft and so on
(Langston and Lauge-Kristensen, 2013). All these companies are highly popular for their own
chocolates. So, there are various market competitors of GODIVA CHOCOLATIER which
influence negative impact on its products, services, pricing policy, and marketing techniques.
This company should produce some more tasty chocolates so that it can give tough competition
to its competitors. Main competitors of this company are MARS, Nestle, HERSHEY, FERRERO
and so on.
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Threat of substitutes: This forces is also affects organizational growth and development of
company. In market place, there are various firms which provides substitute items on cheaper
prices which is highly affecting GODIVA CHOCOLATIER'S market share as well as financial
profit. There are some other problems which might affect this company. For better growth and
development it wants to find a good location and for smooth entry it have to cooperate with
foreign policies which is quite difficult for it. There are various Chocolate companies in UK
which provide same flavoured chocolates like Godiva Chocolatier on less prices.
Bargaining power of customers: GODIVA CHOCOLATIER is one of the leading confectionery
brand so it have good buying power. But after the recall of chocolate bars which included
salmonella, it has influenced such negative impact on its buying power. This organisation have
million of customer but in present time there are various competitors which has been entered into
market and provides chocolates on lower prices, this is continuously effecting market
performance of this company. That is it also have to make changes in its pricing policy so that it
can retain its customer for long time period (Harrington and Ottenbacher, 2011). As, income
level of UK people is very low so, Godiva Chocolatier is bound to sell its products on low
prices.
Bargaining power of suppliers: GODIVA CHOCOLATIER is highly known for its positive
relation with its different suppliers. This organization purchase its raw materials form supplier of
agriculture commodities for producing its products and services. In simple words, this company
highly depends upon AGRO business supply chain. This organization is very huge in size that it
why its bargaining power is strong as compare to its suppliers. Mainly, it use milk, nuts, cocoa
beans to produce chocolates. In United Kingdom there are very few suppliers so Godiva
Chocolatier have to purchase raw material on the price which is decided by suppliers.
Industry rivalry: There are various competitors of GODIVA CHOCOLATIER which always
focus on technical forces to operate their business activities in most effective manner. The major
rivalry firms are Nestle, Cadbury, Hershey's and many more. Company can compete with its
competitors by investing more in promotional activities and also it can improve quality of its
existing products. By providing variety of products in lower prices it can easily compete its all
contenders and can build strong brand image within market place.
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Hence, these are some most important micro environmental factors which should be
considered by GODIVA CHOCOLATIER. By determining all these forces this enterprise can
improve its strategic position within market place.
TASK 2
Internal analysis of GODIVA CHOCOLATIER
There are various internal forces which affects organizational growth as well as
development. So, it is highly important for company to determine its all internal activities and
practices. For this, it can take help of value chain analysis which is known as most effective
strategic tool for evaluating all internal activities of business enterprise. With the help of this
model, GODIVA CHOCOLATIER can easily determine its most valuable activities which can
be improved by company for achieving competitive advantage. Value chain analysis gives
importance to two kind of activities which are follows as under:
Primary activities:
Inbound logistics: For better growth and development, organisation should give high importance
to those logistic which helps in getting, storing and distributing the raw material for
manufacturing process.
Operations: All business organizations operates various activities and practices so that they can
convert their raw material into final goods. If GODIVA CHOCOLATIER will give importance
to its each and very operation then it can execute its all organisational activities in most effective
and systematic manner which will result in high financial profit. Also, it will help in producing
quality products and services which can attract a huge number of customer (Hénard, Diamond
and Roseveare, 2012).
Outbound logistics: In involves those activities which helps company in distributing its
products and services to different stores so that customer can easily buy them. GODIVA
CHOCOLATIER should focus on its distribution activities so that it can mage its product's
supply and demand within market place.
Marketing and sales: It involves those activities and practices which helps business enterprise in
promoting and advertising its different products and services. GODIVA CHOCOLATIER should
spend more on its marketing function so that it can promote its brand in most effective manner
which will results in high customer base. This is known as most important organizational
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function because without this company can not attract a huge number of people. With the help of
merchandising activities this business enterprise can build strong brand image within market
place and also can get competitive advantage because people like to purchase goods from that
company which is highly popular in market.
Services: It is considered as those activities which helps in maintaining product's performance
after it has been produced and delivered to end user. GODIVA CHOCOLATIER can provide
various effective services such as home delivery of chocolates, setting arrangements for
customers and so on. By providing these types of services this company can provide better
satisfaction to its clients and also can retain them for long time period (Gregorini, 2012).
Support activities:
Procurement: It is considered as that process which helps company in acquiring raw material for
its production procedure. For providing high quality products and services, GODIVA
CHOCOLATIER should obtain fine quality of cocoa beans and fresh milk so that it can produce
such tasty chocolate which can provide high satisfaction to customer. So, procurement is that
most important process which can lead this company to high level of success and growth.
Technology development: In modern world, almost all organisations are attracting towards,
technical forces so that they can operate their business activities and practices in most effective
and systematic manner. With the help of technology development, GODIVA CHOCOLATIER
can improve the quality of its production process which will result in high business growth. This
concept gives importance to the activities of research & development, product design and
process automation (Gold, Seuring and Beske, 2010).
Human resource management: In involves those activities which helps company in hiring and
retaining high skilled employees so that they can operate business functions in most effective
manner. By focusing more on workers, GODIVA CHOCOLATIER can easily increase its
profitability as well as productivity. HRM is that concept of company which gives importance to
needs and wants of employee so that they will feel comfortable while operating business
operations. High satisfied workers can produce quality products and services which can attract
huge number of customer.
Firms infrastructure: Organisation should give importance to its management system,
organisational structure, planning, accounting, finance and quality control mechanisms so that it
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can improve its infrastructure. These activities helps company in managing its all business
activities and practices.
Hence, these are some most important internal activities which should be analyse by
business enterprise on continuous basis for achieving high organisational growth. In simple
words, by focusing more on above mentioned activities GODIVA CHOCOLATIER can achieve
huge competitive advantage within its market place (Godet, 2011).
TASK 3
Identification of Competitive strategies
In modern world, market competition is increasing every day. All this happened because
of globalisation and high use of technology. It has become most difficult task for all
organizations to survive in such competitive market place. So, it is highly important for
GODIVA CHOCOLATIER to take help of different tools and techniques so that it can exist in
marketplace for long time period. Porter's generic strategies is most effective strategic tool
through which organization can achieve competitive advantage within market place or can
compete with its different competitors easily. There three major competitive strategies through
which company can achieve build strong brand image in market place and also can compete with
its customer. All those strategies are follows as under:
Cost leadership strategy: This concept gives importance to lowest cost procedure so that
company can produce extra products and services. If organisation will manufacture its goods and
services on lower prices then it can offer them in market at lower prices also, which can affect
pricing policy of other companies (Foss and Knudsen, 2013). With the help of this, business
enterprise can earn high level of financial profit. To become cost leader company, it is highly
important for organization to firstly decide that to whom with it wants to compete. Godiva
CHOCOLATIER wants to compete with Cadbury, Nestle and some other confectioner
companies. Then it should determine that what kind of feature customer want in their products
and services. After determining that enterprise should focus on its own costs and cost drives and
at last, it should produce products and services of comparable quality on lower cost. By using
this strategy, Godiva CHOCOLATIER can get high margin on lower costs. Also, can compete its
market competitors. If company will get high margin then it can make better scope on its
suppliers and buyers. The main buyers of this company are kids and college students. The
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biggest disadvantage of this strategy is that sometimes customer does not compromise with
product quality and that it why they gets attracted towards high priced products (Cinquini and
Tenucci, 2010).
Differentiation strategy: This is the second strategy of Porter's generic strategies model. In this,
organisation focus on product differentiation so that it can produce highly unique and innovative
goods and services which can give high competition to competitor's products. Godiva
CHOCOLATIER can make differentiation in its product's quality, design, image and packaging.
By making goods and services more attractive and unique this company can sell its goods on
high prices and also can provide high satisfaction to its customer. Quality products of this
enterprise can reduce the attractiveness of its substitute items. The biggest disadvantage of this
strategy is that most of customer can not pay such high prices of quality products that is why
they look for their substitute goods or services. Also, needs and wants of clients changes on
regular basis so that company can not depends upon its unique [product for ever.
Focus Strategy: This last competitive strategy which given core attention to particular market
segments. In simple words, in this strategy organization do not cover a large market share instead
of this it select a specific geographical area. If company will focus on only a particular market so
that it can decrease its operational cost. Also, it can give importance to differentiation in which
enterprise only focus on differentiating its products from other substitute items (Bettis and et.al.,
2014). By focusing more on a specific market Godiva CHOCOLATIER can clearly understand
that market place.
Hence, these are some most important competitive strategies through which Godiva
CHOCOLATIER can increase its customer base, organisational profitability, productivity and
also can give high competition to its market competitors. Above mentioned all strategies have
their own advantages as well as some disadvantage, it depends on company that what is its
current market position and which strategy is most suitable for its work place. By answering
these two question, organization can easily select appropriate strategy for its.
TASK 4
Strategic directions
By evaluating all the internal as well as external factors of Godiva CHOCOLATIER it
has been determined that its market position is good and also it is generating enough level of
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financial profit. But for better growth and development, it should consider its all micro and
macro environment factors while taking any important work based decisions. It should operate
its al activities in most effective manner so that it can generate high financial profit. There are
various competitive strategies out of which it can go for cost leadership strategy. With the help
of this strategy it can increase its production level and also can attract a huge number of
customer. This company is specialised in -producing chocolates, by following cost leadership
strategy it can produce more chocolates on low cost and also can sell them at less prices which
can help it in achieving competitive advantage within market place (Aula, 2010). For better
growth it can enter into new market such as Asian and Russian market, also can different range
of its products by experimenting in its existing products and services. Its financial condition is
quite well so it can do expand its business in other countries and can cover large market share.
CONCLUSION
By evaluating this project report, it has been concluded that strategic management is the
most important concept of all organisations. It provides various frameworks through which
organization can easily determine its internal as well as external environmental factors. It can
also be defined as a process of setting goals, examining competitive environment, analysing the
internal business, determining strategies and ensuring that selected strategies have been
successfully implemented within organization. This project report is based on Godiva
CHOCOLATIER which is specialised in producing different variety of chocolates. In the present
scenario, this company is facing various problems because of continuous changes in business
environmental factors. In this report, PESTLE analysis has been conducted which helps company
in identifying all external factors which can influence positive or negative impact on its strategic
management. Apart from this, porter's five forces and value chain analysis have been evaluated
so that company can determine all its internal factors which are affecting business performance.
For better growth and success it should consider all the micro and macro environmental factor
and then should implement any strategy. Also, a detailed description has been given on
Bowman's clock strategy in context of company so that it can effectually achieve competitive
advantage within market place.
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REFERENCES
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Cinquini, L. and Tenucci, A., 2010. Strategic management accounting and business strategy: a
loose coupling?. Journal of Accounting & organizational change. 6(2). pp.228-259.
Foss, N. J. and Knudsen, C. eds., 2013. Towards a competence theory of the firm (Vol. 2).
Routledge.
Godet, M., 2011. Scenarios and strategic management. Boston: Butterworths.
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Porter's Five Forces. 2017. [Online]. Available
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APPENDIX
Appendix 1
These are the major macro environmental factors which can influence positive as well as
negative impact on Godiva company. It is highly important fro this company to consider all these
companies while implementing any new strategy within work place.
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Appendix 2
These porter's five forces which helps company in analysing all internal factors of business
enterprise. By taking help of this concept, Godiva company can better decisions regarding its
future growth and development.
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