Strategic Management Report: Micro and Macro Environment Analysis

This report provides a comprehensive strategic management analysis of Donald B, a chocolate manufacturer based in Australia, focusing on its potential for international expansion. The report begins with an executive summary and table of contents, followed by an in-depth examination of consumer behavior within the chocolate industry, highlighting purchasing patterns and preferences. A detailed analysis of Donald B's microenvironment is presented, including an assessment of supplier power, buyer power, the threat of new entrants, and the role of distributors in the confectionery industry. The report then summarizes the competitive landscape, identifying key players like Nestle, Mondelez, and Mars. Furthermore, the macro-environment is analyzed, considering social influences such as consumer health concerns and political factors affecting the business. The conclusion summarizes the key findings and their implications for Donald B's strategic planning and future success in the global market. The report emphasizes the importance of understanding the external environment for effective strategic decision-making and sustainable growth.

Running head: STRATEGIC MANAGEMENT
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Name of the Student
Name of the University
Author Note

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Executive Summary
The report is based on the analysis of the micro-environment and the macro-environment
based factors which are able to affect the international expansion based plans of a company.
The company which has been taken into consideration for the analysis is Donald B. The
organization manufactures and operates in the chocolate industry of Australia. The company
plans to expand its international operations and further offer the products in Australian
supermarkets like, Woolworths and Coles. The different external factors which are able to
affect the organization have been analysed in the report. The analysis has been able to show
that the organization will be able to able to function in the industry profitably with the help of
proper study of the environment.

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Table of Contents
Introduction....................................................................................................................3
Analysis of the behaviour of buyers of chocolate products...........................................3
Analysis of the microenvironment of Donald’s company.............................................4
Summary of the competitors of Donald’s Company......................................................7
Analysis of the macro-environment of the company.....................................................8
Conclusion....................................................................................................................10
References....................................................................................................................11

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Introduction
Donald B is a maker of chocolates and different chocolate based products. The
organization has two major stores in Melbourne in which it offers different types of products
which are related to the choices of consumers and their preference levels as well. The main
aim of the organization is to start its international operations with the help of proper
expansion in different parts of the world. The different types of products which are offered by
the company thereby include, confectionery products, glazed on crystallized fruits, liquorice,
candied nuts, candied popcorn and drinking chocolate (Simon, Fischbach & Schoder, 2014).
The report will be based on the analysis of the buyers of the organization and their
behaviour levels. The microenvironment of the organization and the macro-environment
based factors will also be analysed in the report. The competitors of the company who are a
part of the industry will be analysed in detail in the report. The analysis will be able to depict
an effective picture of the methods by which the company will be able to function in the
environment in the future.
Analysis of the behaviour of buyers of chocolate products
According to Barros, Hernangómez and Martin-Cruz (2016), the products which are a
part of the confectionary based industry including chocolates are consumed by the
Australians at a huge rate. Chocolates have also been able to develop the position of the
highest consumed snack food in Australia. More than 77% of the total sales of the
confectionary products in Australia come from the sales of chocolates. The purchase based
decisions of the consumers are thereby based on the buying behaviour which has been
developed by them. The organizations in different industries need to understand the ways by
which consumers are able to behave.

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As argued by Daspit et al. (2017), the development of value for the consumers is also
possible with the help of effective analysis of their buying related behaviour. A huge part of
the population of Melbourne consumes chocolate based products and chocolate is considered
to be an important part of the lifestyle of Australians. The main considerations of Donald B
should be different stages of the needs of consumers and stages which can be helpful in
satisfying their needs as well. Huge part of the Australian consumers is found to purchase
their favourite chocolates from various supermarkets which operate in the country.
According to Demir, Wennberg and McKelvie (2017), women form large parts of the
consumers who are interested to buy chocolates from the supermarkets in comparison to men.
The major reason behind the development of the expansion based strategy of the company
with the help of Australian supermarkets like, Woolworths and Coles is based on the amounts
of people who visit these places on a regular basis. The organization however needs to
analyse the needs and demands of the consumers in an effective manner in order to offer
them with products which will be based on their personal choices.
Analysis of the microenvironment of Donald’s company
According to Durand, Grant and Madsen (2017), the levels of competition which have
been created within the chocolate based industry of Australia which is significant for the
company in order to form effective relationships with the suppliers. The suppliers who are a
part of the company on an international level have high levels of bargaining power. The
bargaining based power for the suppliers of the large organizations is considered to be higher
as compared to the smaller ones. The entire confectionery based industry is highly dependent
on the agro-business related supply chain and various companies which manufacture
chocolate.

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As argued by Dyer et al. (2015), the high levels of purchasing based power and
effective relationships with suppliers who provide the agricultural products in the country.
The organization will thereby need to struggle in the Australian industry with the companies
that are leading the market. The leaders in confectionery based industry have huge levels of
power over suppliers. The raw materials which are provided by the suppliers are offered in
bulk to the organization. The different raw materials which are a part of the industry mainly
include, cocoa, nuts, milk and different special ingredients as well. The suppliers are thereby
able to support the needs based on chocolate production in the country. The large
organizations like Cadbury are capable of buying the raw materials in huge quantities as
compared to the companies which are of medium size (Engert, Rauter & Baumgartner, 2016).
As discussed by Ethiraj, Gambardella and Helfat (2018), the buyers in the chocolate
industry have high levels of buying power based on the large confectionery based producers
which operate already in the market. The large and well-known organizations in the country
have the existing buyers who are loyal to the different international brands. The international
chocolate organizations have billions of consumers in the Australian chocolate based
industry. The prices based on different chocolate based products of the organizations are
based on the choice of the consumers. Donald B is facing high levels of competition from the
international organizations based on the prices and choice of consumers as well.
The levels of prices which are set for the products of Donald B needs to be considered
by the organization. The price of the products which are offered by the company needs to be
considered by Donald B before it starts the operations. The bargaining based power of
consumers in the industry is thereby considered to be moderate in nature. The organization
will also face huge amounts of threat related to low levels of switching costs and the
backward integration as well (Frynas & Mellahi, 2015).

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The distributors are able to play a key role in the operations of the organizations in
confectionery industry. The chocolate producing organizations in the industry are able to
offer the effective levels of products to the consumers with the help of various distributors.
The marketing related activities which are conducted by the organizations are also related to
the distributors of the company. The marketing based chain of the organization is also based
on the methods by which the distributors operate in the industry. The distributors of the
organization are able to provide the products to different types of customers in the industry
(Hill, Jones & Schilling, 2014).
Donald B has plans to distribute its products to the different supermarkets which
operate in Australia. The distributors in the industry will be able to play a key role in the
ways by which products of Donald B can be offered to a larger groups of consumers. The
distributors of the organization are thereby an important part of the marketing based process
which is conducted in the market. Donald B thereby needs to develop a strong distribution
based network in order to enter a new country or area of market with the help of its products
(Hubbard, Rice & Galvin, 2014).
As discussed by Kasemsap (2014), the marketing and promotional activities within
the industry are able to play a key part in the methods by which the company can create
awareness based on diverse products which are offered to the consumers. The distributors
will be able to help the organization to maintain their specialised stores in the country. The
speciality stores will be able to provide the products to the consumers in an effective way.
The organization is planning to offer its products to the customers with the help of
supermarkets which operate in Australia, namely, Coles and Woolworths. The distributors
will be able to maintain the uninterrupted levels of supply to the consumers within lesser
amounts of time. Donald B will thereby require to develop a group of distributors in such a

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manner so that they are helpful in offering the products to consumers (Hubbard, Rice &
Galvin, 2014).
Summary of the competitors of Donald’s Company
As discussed by Meyer, Neck and Meeks (2017), the chocolate or confectionery
industry of Australia is widespread in nature and has been able to affect many people in a
huge manner. The different organizations which are considered to be a significant part of the
chocolate based industry of Australia mainly consist of international companies like, Nestle,
Mondelez, Lindt and Mars. The organizations are able to provide high levels of competition
to Donald B with the help of huge customer base. The organization thereby needs to grow
strategies in such a way which will be helpful for maintain the levels of competitive
advantage.
According to Michael, Storey and Thomas (2017), the organization thereby needs to
analyse the levels of competition which it can face in the industry from the domestic and the
international players. This will play a key role in the ways by which Donald B can increase
the profitability based levels in the confectionery industry of Australia. The sustainability
based measures which have been taken by the organization have played a key part in the
effective processes of the company. The demands in Australian confectionery based industry
can provide huge amounts of opportunities to Donald B so that it is able to operate in a
profitable manner.
The organization can further develop its competitive advantage and customer base in
the market with the help of lower prices. The lower rates of high quality products will be
helpful for the company in order to develop its position in the confectionery based industry.
The organization can also take major steps in order to maintain sustainability in the
operations. The sustainable operations will be able to offer effective levels of opportunities to

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Donald B in order to create a position in the confectionery based industry. Donald B will be
able to appeal to the customers of international organizations with the help of effective
pricing based policies (Morschett, Schramm-Klein & Zentes, 2015). The international
organizations have created a loyal base of consumers with the help of its products. Donald B
will be able to operate in the confectionery industry with the help of high quality based
products which are provided at lower prices.
Analysis of the macro-environment of the company
Social influences - The operators in chocolate based industry of Australia have to
face fast changes based on the preferences of the consumers within the last few years. The
growth which has been seen in the concerns of the consumers are based on the levels of sugar
and fat in foods related to chocolate. The participants in the confectionery industry have
started facing increasing levels of demands based on the diverse needs of the customers. The
demands for healthier products have increased in the recent environment which has caused
changes in the products which are offered to them. The demand of consumers for premium
levels of products have also been able to influence the ways by which organizations can
operate (Sakas, Vlachos & Nasiopoulos, 2014).
Political factors – The changes which take place in the Australian government based
activities are able to affect the operations of Donald B. The entry of workers within the
country of operations is hugely dependent on the government regulations. Another major
political factor which is able to affect the operations of an organization like Donald B is
based on the levels of investment and imbursement which is provided to the shareholders.
The employees who form an important part of the effective operations of Donald B can be
managed effectively with the help of proper imposition of taxes. The lack of an effective and

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proper workforce is thereby able to influence the prices of the products which are provided
by Donald B (Simon, Fischbach & Schoder, 2014).
Economic factors – The monetary downturn all over the world has been able to affect
different chocolate based organization which have their operations in Australia. The changes
which occur in the tax rates have a major effect on the sales based performance of Donald B.
The larger or international organizations will be able to mitigate the risks which are based on
their operations in the industry. However, an organization like Donald B will not be able to
mitigate the risks easily (Steinbach et al., 2017). The economic situation of the country in
which Donald B plans to operate thereby needs to be considered by the firm in order to
function in the industry in a successful manner for a longer period of time.
Natural factors – The high demand of chocolate based items are able to affect the
ways by which it influences the environment. The activities related to cocoa farming are
thereby considered to be highly important for the effects which these have on the
environment in the country in which the organization operates. The environmental conditions
are also able to influence the ways by which organizations are able to produce the chocolate
based products. Donald B thereby needs to take into consideration the ways by which its
operations are able to affect the environment (Trigeorgis & Reuer, 2017).
Technological factors – The production and packaging based processes have an
immense effect on the speed of activities. The innovations which have taken place in the
industry have affected the ways by which chocolate products are manufactured. The
introduction process of new machinery for the purpose of brewing can be used by the
organization in an effective manner in order to mix the cocoa grains and coffee. The levels of
technological innovation in the industry is a major factor which will affect the profitability of

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the company. The technological factors will be able to affect the revenues of the organization
(Wheelen et al., 2017).
Cultural trends – The social and cultural factors always play a key role in the
demands for chocolates. The organizations in the industry thereby need to take into
consideration the needs of people effectively in order to offer them with the desired products.
The companies which operate in the chocolate industry are able to become a part of the
lifestyle of consumers. Donald B can maintain its position in the industry with the help of
appropriate fulfilment of different needs of the consumers (Trigeorgis & Reuer, 2017).
Demographic factors – The demographic factors are able to play a major role in the
ways by which consumers make purchasing decisions. The decision making capabilities of
the consumers are affected by the demographic factors. Donald B can analyse the
demographics of the consumers in order to function in the market in a profitable way
(Steinbach et al., 2017).
Conclusion
The report can be settled by stating that Donald B can operate in the chocolate
industry in a lucrative way with the help of proper analysis of the internal and the external
environment. The expansion based activities of the organization will be influenced in a huge
way by the ways by which it is able to mitigate the risks which arise from the external as well
as the internal environment. The proper development of a supply chain is also considered to
be highly important for the operations in different areas or countries. The development of a
distribution network is also considered to be highly important for the ways by which the
company can maintain the operations in the competitive market. The organization will then
be able to provide tough competition to the international organizations like Nestle which
operate in different countries.

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