A case study of Mondelez
®
4
Approximately each company within the confectionary industry has multiple suppliers
(Armstrong, 2015; Data Hero, 2015). Some of the suppliers are dominant within the market
compared to others, which means that they have significant control of the prices of the products
that they supply to companies such as Mondelez
®
. Specifically, the firm has been struggling to
maintain a steady supply of cocoa, which is the primary raw material in the production of its
confectionary products. The fact that suppliers of this factor input are quite strong within the
market has always meant that the organization cannot control their prices in the manner that they
would have wished. The reducing volumes of cocoa production around the world suggest that the
company is likely to struggle with its suppliers since such trends bolster their bargaining power
(Leake, 2010). Therefore, the effect of the bargaining power of the suppliers has been reduced
profitability of Mondelez
®
.
Bargaining Power of Buyers
Consumers of confectionary products are quite demanding since they always want to
obtain the best products at the least possible prices. In addition, confectioners, such as
Mondelez
®
are obliged to research the markets for consumer tastes and preferences if their
products have to be appealing to their target markets (McDaniels & Gates, 2013). In this case, it
suggests that the bargaining power of consumers is quite strong for Mondelez
®
, which has to
always adjust its production according to the market trends.
Threats of Substitute Products
Companies that adopt vigorous marketing strategies dot the industry in which the firm
operates, which means that substitute products would have significant effects on the profitability
of Mondelez
®
. For example, some of such companies have profound pricing strategies that could
