Strategic Management Analysis of GODIVA Chocolate Company

This report offers a strategic management analysis of GODIVA, a premium chocolate manufacturer. It begins with an executive summary outlining the key frameworks used, including VRIO for internal factors and Porter's Five Forces for external micro factors, along with an exploration of the challenges faced by GODIVA. The report then delves into the current strategic positioning of GODIVA, examining external macro factors through a PESTLE analysis, covering political, economic, social, technological, legal, and environmental influences. Furthermore, it assesses the competitive landscape using Porter's Five Forces, analyzing the threat of new entrants, substitute products, bargaining power of buyers and suppliers, and competitive rivalry. The report provides strategic recommendations to strengthen GODIVA's market position, followed by a conclusion summarizing the key findings and insights.

STRATEGIC
MANAGEMENT

Executive Summary
Strategic management is the tool that helps firms in managing their operations well. Current
study discusses about Internal Factors Analysis by Jay Barney's VRIO Framework. Furthermore,
it describes External MICRO Factors (Porter's 5 forces framework) and Challenges of GODIV.
In addition, Bowman's Strategy Clock Model is being explained in this report.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Current strategic Positioning of GODIVA ........................................................................1
2. Strategic recommendations for GODIVA to strengthen its current position.....................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is the process in which company makes new strategies to compete
with external forces. It is the process to implement new changes in organisation which gives high
number of opportunities and growth. Strategic management helps members to understand
organisation goals. In this given project, GODIVA chocolate establishment will come into
discussion which is a premium chocolate manufacturing institution in the UK. GODIVA
established in 1926 in Belgium. It has overall 600 outlets in the United States. Such as in
Canada, Europe, Asia. Including chocolates, they also provide truffles, coffee and cocoa biscuits,
dripped fruits and sweets. The signature package of GODIVA is Gold Ballotine. It also provides
special packaging chocolates for seasons and for holidays. Furthermore, this company also deals
with ice creams, cheesecakes and coffee pods. They also adopt one strategy for sugar free
customers by providing them sugar less chocolates such as sugar free chocolates and cupcakes.
GODIVA have huge variety of chocolate products which is premium in quality. GODIVA itself
is a big brand. In this present report, In this given assignment it will explain about the analysis of
external factors by using PESTLE model.
Challenges of GODIV
In the current market situation it involves many challenging factors which affects
industries growth. Like external or internal factors. These factors affect the company objectives
and customer policies. To beat the strategies off all these brands, GODIVA has to adopt some
new flavours and products. It will help to retain the existing and attract new customers. For
chocolate industries one big challenge is taste and quality which is important for the companies
to adopt healthy products.
Godiva has five Chefs for making their chocolates who work for GODIVA they discover
new flavours. In GODIVA factories they made 30 to 40 new chocolate recipes on an average.
Overall they make 290 million chocolates. From the past two years they get earn by 12%.
1. Current strategic Positioning of GODIVA
External MACRO factors (PESTLE):
Business environment is changing continuously. There are different macro factors
involved in the market which affect the business positively and negatively both.
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Political (P): There are several factors that are included in the political factors which
have great impact over the organisation. It has been identified that it is one of the factors which
have impact over the policies, rules and regulation of the venture. As per political factors,
GODIVA is liable to abide by the government rules and regulations for smooth functioning. Like
company has to follow the rules related to customer health, sanitary issues, safety rules, etc.,
main purpose of government is to protect the health and environment of society. GODIVA
needs to use high quality of raw material, premium class chocolate powder and all other
ingredients. On the other side, company has to follow the rules and regulations for product
labelling as well (Aithal Shailashree and Kumar 2016). Political factors affect the whole industry
by changing in Employees laws, consumer policies etc.
Political cause is the external factor. if government increases taxes in that case GODIVA
will increase their chocolate prices and customers will less purchase their product and
immediately sales will go down. It can be said that it have negative impact ore as compare to the
positive one. Such as government increase the prices of raw material. Then it will have impact
over the cost of production. Inventory cost increases then price of the products and therefore,
demand for the product and services of the venture will fall.
Economical (E): Economic elements is the second external part which affects company’s
growth positively or negatively. It is the major element which affect external environ mane and
indirectly impacts on the strategic position of the organization. Changes in tax rates, exchange
rates, inflation, deflation affect buying behaviour of the consumers. In such condition revenues
of the entities can get badly affected. When people think about chocolates, the first name that
comes in mind is of GODIVA. This chocolate brand shows the premium, luxury and awesome
flavours. Brand is noted by their given products. Customer purchasing power depends on the
economic condition of a country (Aithal, 2016). If economic condition of the nation is good then
in that situation, customers purchase more services and products but if the country is facing
economic crisis then people would not spend much amount on luxury services or products(Eden
and Ackermann 2013). . But if there is negative economy condition then people think before
buying any products. It affects entire industry. In such condition firm has to modify its
operations in such manner so that it can run its business smoothly (Aithal Shailashree and Kumar
2016).
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GODIVA needs to maintain their profit margin for the uncertain situations. Economic
status will show the profit of company. Furthermore, economic factors affect the overall growth
of industry.
Social (S): It has been identified that there are several factors that have included in the
social factors which have impacted over the organisation. These factors have influence over the
productivity and profitability of the venture, the factors included in this aspect are taste
preferences of the customers, demand and wants of the clients, changing behaviour of the clients,
reduce in the loyal customers etc (Aithal Shailashree and Kumar 2016).
Social cause is the external part which affects the company sales. Social factors include the
individual choices as well as customer needs and wants. Social factors influenced by new
product and services introduce in the market. It is very important for GODIVA to maintain a
positive image in the minds of customers. It helps to maintain the brand value, market share and
sales. One negative step would have taken company into loss. GODIVA needs to use nutrients in
their products so that customers would have trust for company and maintain long term relations
with them. Social factors involves society issue which is important for the company to adopt
healthy services and gives quality of services. Like GODIVA have many competitors who make
new product which is innovative To commove from this situation GODIVA needs to make new
product ideas and provide new services.
From the customers company earn profit. It is important for the company to abide the
society needs and wants to increase their sales.
This social factors affect GODIVA by stopping the consuming level of chocolates.
Beacause some parents suggest avoiding chocolates. To overcome form this social factor
company needs to make product strategies in which they involve less sugar and healthy
ingredients so that customers make healthy trust in terms of GODIVA (Aithal Shailashree and
Kumar 2016).
Technology (T): Technology has changed the structure of GODIVA. The new websites
of Hong Kong, Malaysia and China are designed by infinity e-commerce system (Barney, 2014).
In this new technology, GODIVA provides multilingual facilities for different customers so that
they would visit the site and take all required information. It gives flexibility and easy services
for their customers (Feys and Probert 2015).. On the other side, they also use online commerce
scheme including SEO, SMM and other online components. From this technique, GODIVA
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analyses the customer's attraction ratio and market image. Technological factors give a positive
impact on company and helps to identify the brand image in market. From these techniques, they
get 5000 customers who visit per day.
Technological external factors are gives both positive and negative impacts over the
organisation. All the venture need to adopt the new technology so that they can able to work in
effective and efficient manner. In the above assignment positive impacts have already discussed.
Negative impacts would be online hackers. This negative effects change all information of
websits and make trouble for the company. For that company needs to adopt high security
against cyber crime. Current position of GODIVA company is high by adopting new
technologies (Aithal Shailashree and Kumar 2016).
Legal (L): GODIVA is the most famous brand in United Kingdom. Legal factors include
the major implications which is mandatory for the company to follows according to the
government rules and regulations. Like company should needs to adopt fair practises and use
quality of raw material or sale healthy product and services. Legal factors may improve the brand
image in front of government. It gives various benefits and services by the government to the
company. GODIVA provides various chocolate products like cupcakes, cake pods, ice creams
and premium quality of chocolates (Aithal Shailashree and Kumar 2016). For the same, company
needs to follow the laws of the government to maintain its position in the market.
Legal factors may give a huge impact on company’s growth. If industries doesn't follow
the instructions.
Environmental (E): This is the most important factor of external environment.
Customers are the most essential part in company’s profit they always compare the products on
the basis of alternatives if they get best services at low cost they definitely switch to other bra
nds. So, it is important for the organisation to hold customers by providing new products and
services because external environment keeps on changing. This factor affects GODIVA by
reducing its sales(Freeman and McVea 2015).. Company also makes sure that its services does
not affect the healthy environment. Otherwise, customers give less interest towards the products.
External MICRO Factors (Porter's 5 forces framework)
This micro factors affect the company. To identify the strength and weaknesses of the
company Michael Porter's 5 forces model in 1979. This model helps company to identify their
actual position in the market. It also helps to measure the risk involvement in external
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environment. This model helps GODIVA to make new potential strategies and ideas to overcome
from these negative effects. These 5 models are given as below:
1. Threat of New Entrants: In this external factor include the risk of new potential
competitors entries in the market. GODIVA itself is the high big brand image in the
market. There is less scope for the new companies to beat level of quality of services
provided by GODIVA. It depends on the situation external factors are always uncertain.
New strategies or company’s services may affect the sale of GODIVA. It needs to
determine the needs and wants of customers with making product according to their
choices to protect company against competitors.
2. Threat of substitute products or services: Customer is very clever they have brilliant
analysing power to select best one. Today's customers before purchasing of any product
services they comp[are the product with other alternatives and then compare its price,
quality, durability, and brand image(Hill, and Jones, 2013.). Then decide to purchase. In
the market there are different other chocolates brand which provides same product like
GODIVA. For GODIVA it needs to make new services attracting offers which is
different and innovative so that company retain its existing customers and attract new
customers as well. GODIVA company provide exciting services of gift pack chocolates
it premium quality attracts customers. They also provide alcohol flavoured chocolates.
On the other side few customers cannot afford high range of chocolates so they select any
other alternatives whose price is less comparatively.
3. Bargaining power of Buyers: GODIVA has large numbers of buyers. They provide a
variety of products and services which give luxurious feel to the customers (Ortega Jalón
and Menéndez 2014). Its packing, labelling and the best refreshing flavours attract
millions of buyers. This quality of GODIVA gives high range of profit revenue. No one
can attract customers of GODIVA. But on the other side, as above already mentioned that
external environment is dynamic in nature, any competitor also make strategy to low their
prices to attract the customers on the basis of this reason buyers my switch the services to
another brands due to less cost. It is a bargaining power style adopted by many of the
competitor to attract the customers.
4. Bargaining power of suppliers: Suppliers are the individuals who provide raw material
to the businesses. Supplier is the factor which reduces the profit of the company by
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making high prices of raw materials and less availability of products. It makes more
competition level among industries. On the other side weak supplier makes more profit
for company. It depends on the situation when there are fewer suppliers and more buyers.
In this situation, supplier bargaining power is high. Reversed, when suppliers are more
and numbers of buyers are less then, in that case, supplier’s bargaining power is less.
GODIVA needs to purchase their raw material from the best suppliers at low price.
5. Competitive Rivalry Existing Firms: In this external environment, there are many
rivals of GODIVA such as Hershey's, Peanut Butter Cups, Milk Chocolates, Snickers, Kit
Kat, Twix, Reese's Pieces (Peppard and Ward 2016. ). . These are the other chocolate
brands situated in United States. In the chocolate industry, there is high number of other
companies situated in all over the world like Cadbury, Nestle. All companies have their
own flavours and quality. There is large number of competitors available in the chocolate
industry. To overcome from these effects GODIVA needs to take innovative strategy to
beat their competitors. For that GODIVA joint their hands with Sainsbury’s to expand
their business growth.
According to the GODIVA company it is the best model to analyse the Micro factors. It helps to
measure the all factors properly as compare to SWOT analysis.
Internal Factors Analysis by Jay Barney's VRIO Framework
This business model helps company to make new strategies ideas. Every organisation has
their own vision and mission on which they accomplish their objectives. VRIO framework helps
company to identify their strengths and weaknesses of internal environment. This procedure
helps to create new opportunities and remove uncertain events. In this process, some questions
asked company to itself like question of value. Question of Rarity. Question of Imitability and
Question of Organisation. In this model, company identifies its lacking point and try to
overcome from the major issues which affect its growth. GODIVA needs to adopt this model to
measure the position of internal environment. This tool was generated by Barneyin 1991. From
this model, GODIVA can make more competitive strategies to maintain its position in the
market. Two factors is very important to accomplish the goals of the company that is Resources
and capabilities(Pestle Crowley and Weirauch 2014.).. Resources which is important for the
production of goods and services and capabilities that helps to implement the strategies into
correct manner. These four models of VRIO are mentioned as below:
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Valuable: In this question explains that which factor involves high valuable to
accomplish the goals of company. If resources of the product is gives more value so it means
resources increase the more profit for the firm. Resources are valuable when they give more
helps to get customer attraction. It is important for the GODIVA to review its resources regularly
to nourish them to make more profit.
Rare: In this second questions resources can be found rarely in competitive environment.
Extraordinary and priceless resources may create highly competitive situation. Rare means when
resources occupied by one or more than one company that resources become rare When these
resources become uses by different companies it creates more competitiveness in the market. It
depends on the organisation. Loses essential resources would impact negative effects on the
company image (Peteraf Gamble and Thompson 2014).. It is a big challenge to take same
resources in different ways.
Imitability: Sometime, company faces less number of resources and so, in that case, they
use other alternatives instead of that. From this model, company also creates opportunities by
using alternatives.
Organise to capture the value: In this model, author wants to say that company has to
adopt valuable resources. GODIVA needs to create skilled employees and team members who
create valuable resources in the best manner. Company needs to utilise all resources to
accomplish goals of organisation.
According to above explanation, GODIVA needs to analyse the internal resources to find
best opportunities. These four models show the resources values and their imitation. Company
needs to make competitive strategies to maintain its sustainability in long term. GODIVA should
adopt the best strategies or utilization of resources so that they would achieve the objective.
These models help to create new business expansion plans and reduce the uncertain
events(Porter and Heppelmann 2014).
Critical analysis
According to the internal and external facts it was concluded that. It will affect the
company growth directly and indirectly. Company need to modify their plans and strategies to
overcome from these facts. Furthermore, it gives positive and negative impacts on the company
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growth. Like High interest rates may increases the prices of company products and decrease the
demand.
2. Strategic recommendations for GODIVA to strengthen its current position
Strategies plays a very important factor to reach the destination. Strategic management
helps to accomplish the process of strategies (Rothaermel, 2015). It helps to create the business
opportunities and increase profit revenue. GODIVA’s current strategy is to focus on the needs of
customers especially chocolate lovers. It focuses on the quality of chocolate services. GODIVA
adopts a creative approach which gives higher satisfaction to their customers. GODIVA makes
new changes to increase the quality of its websites and make it more attractive and different from
other companies. Also, they adopt the best strategies in valentines or in moth of December.
During this season, they are engaged and busy. On the other side, they provide wedding favours
for that they create different website so that customers don't waist either time to navigate on the
current site. This the all strategies of GODIVA to attract different customers according to the
choices. Adding to that, they provide different varieties of chocolates on the special days
including Mothers day, Easter, Spring and summer periods. It also makes some different unique
catalogues for their customers.
Strategic management helps GODIVA to implement strategies into more specific ways. It
helps to implement the proper planning and controlling which enhance the company image and
productivity level. With the help of good Strategic management GODIVA creates new product
for the new customers according to their needs and wants. On the other side GODIVA needs to
follow proper direction towards the organisational goals. Strategic management also helps to
implement proper resources at the right place at the right time.
In the uncertain situations GODIVA needs to adopt proper planning so that they adopt
risk and make the best strategies to overcome from the situation like In inflation company need
to increase the price to cover the profit ratio.
Bowman's Strategy Clock Model
This strategic model helps to design the marketing strategies. It is a generally based
diagrammatic representation which shows the relationship between customer value and prices.
This strategy is also called generic strategies model. It explains three factors by which company
compete with its competitors (Team, 2013). These are the price of product, its quality and
customer satisfaction. GODIVA needs to identify the competitor’s business plans before making
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its marketing strategies. There are 8 models which helps GODIVA to identify the best strategic
plan for future.
1. Low Price: This first segment helps company to attract more new customers. This
strategy adopt generally those companies who have differentiated value. According to
this model, it explains the needs of customers. Customers attract from those products
which have less price. This marketing strategies will attract more new customers towards
the company. GODIVA Company provides premium quality of chocolates which
involves high prices. Instead of that maybe they provide low value added services and
provide it at low price. To expand their business or image company has to attract those
customers as well(Tsyhankova Yatsenko Яценко and Zavadska 2014.)..
2. Low Price: In this next step company also suggest for their product and services. These
strategies generally adopted by this organisation which wants to aware the customers
about its product and services. Like in future if GODIVA wants to create product
expansion in that condition they want make aware to customers at low prices. So that
more customers are attracted towards the new product and services. But on the other side
company doesn't get high profit during this time. Its just to attract new customers towards
the new services. In tBowman's Strategy Clock Modelhis situation only customer get
benefit of low prices.
3. Hybrid (Moderate Situation): In this next model in which company deals with low
prices of products (Wheelen and Hunger 2017. ). It helps to maintain the image in front
of the customers. Like they provide discounts and exciting offers. During December or in
new year GODIVA comp[any gives different new offers and discounts on chocolates.
This is the marketing strategy by which company attracts more new customers and helps
to retain existing customers in the market. This set the image in the market that they
provide low cost products to the buyers. Adding to that it also create trust and faith in
between the consumers.
4. Differentiation: This is the most essential factor when company provides differentiated
products and services at low costs. It increases the competition level. It helps to make
new customers and opportunities. GODIVA deals with different premium class products
like cupcakes, ice creams and chocolates with different flavours at premium prices .
Customers are well known about the brand of GODIVA and about their quality of
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services as well(Yunna and Yisheng 2014).. To grow in the future, it is important for
GODIVA to adopt low priced strategies to adopt more new customers.
5. Focused Differentiation: In this model, strategies are based on the quality of services.
This focused model explains that customers focus on their quality of services. Customer
aklways decides their product on the basis of the quality of services. So, before making
marketing strategies, GODIVA needs to analyse the needs and wants of potential
customers.
6. Increased Price and Quality of product: In this model, company increases their prices
of services without increasing any feature in the product (Zalengera et.al 2014). Without
any reason, company increases their product’s prices. This technique helps to attract more
new customers towards the company products.
7. High price Low value: In this model, company increase their prices and decrease the
value. This situation arise when in the market there is only one company which exists
This situation arises when demand is high and supply is low.
8. Low Value: In this situation sometimes companies sale same price of product which is
old or not good for the health. This strategy of marketing would definitely low the market
share of that particular company. So before making marketing planning, GODIVA needs
to analyse those factors which gives more value to the product.
According to the above methods it helps company to adopt better strategic plans and
policies. GODIVA needs to make proper marketing or future strategies on the basis of customer
needs and wants.
CONCLUSION
From this above report was concluded the external and internal factors which affects the
company growth. This report explained the GODIVA PESTLE analysis and Porters 5 forces
models. Furthermore, it is concluded that the marketing strategies model for future growth. In
this given project it was explained about the strategic management of chocolate industries.
Furthermore, the impacts of current strategies helps to increase the future growth. Furthermore, it
was concluded that GODIVA needs to measure the current facts nd some methods by which they
make better strategic plans by using Bowman's Strategy Clock Model. This model guide to make
new business plans and strategies to make the image in front of the customers.
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