Current Market Conditions Competitive Analysis

Current Market Conditions Competitive Analysis

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Current Market Conditions Competitive Analysis

Many competitive forces exist within a market.  Identifying, examining and understanding these forces are critical and necessary for successfully launching a new product or reinventing a current product.  Hershey Chocolate has been on top of the candy market for many years with their unique and delectable treats.  With the health food movement in full swing, Hershey Chocolate must continue to focus on their new products, such as Brookside Fruit and Nut Protein Bar.  This product includes today’s popular buzz word “protein” while still offering the very product that put Hershey on top – chocolate.  Hershey has also begun to experience notable growth outside North America.  Markets like China have provided Hershey with the opportunity to expand their market on a global level.

Supply, Demand and Equilibrium Prices

        Continually working hand in hand to reach an equilibrium price within the competitive market, supply and demand.  The chocolate industry has become increasingly competitive over the years with companies such as Nestle, Mars and Kraft Foods, which are also seeking to be leader in the chocolate market.  With consumer brand loyalty and promotional contracts, each of these competitors have carved out their own niche.  

        The supply of Hershey’s chocolate can be determined by the availability of the cocoa bean as well as the dairy market and milk used in the manufacturing of the product. The cocos bean has been a stable commodity over the years, however, the price of dairy products have increased over the years.  In the case of a shortage in cocoa beans due to unforeseen circumstances such as the massive loss of harvest due to a weather incident or significant crop damage, there would be a notable supply shortage of the necessary commodity to manufacture this product. Raw material supply can never be counted on to be constant and will need to be continually monitored.

        Affecting and influencing the demand of the product is the continued consumer loyalty of Hershey’s product like and the external factors of the health food movement. Hershey has a long standing history and has survived many market shifts.  The decision to move and add a product line which appeals to those engrossed in the movement to eat healthier, will significantly increase the demand for the new Brookside product line, which offers a protein product while satisfying the craving for a sweet treat.  The number of alternatives on the market may affect the demand for this new product line. Many other companies have joined the healthy movement by offering more products aimed towards conscientious consumers with new protein products.  There has been a flood of this type of product into the market.  This could significantly affect the demand for this new product.  Both the demand as well as the supply for this product will drive the pricing for this product line.