SWOT And PESTLE Analysis Of Personalized M&M

Question:

Discuss about the Gaining and sustaining competitive advantage.

A common business model for any business refers to producing a large stock of products which was then sold to the different retail stores. This way the company enjoyed large economies of scales facilities and incurred less selling and distribution expenses for the company. However, for the personalized M& Ms the business idea and model which was planned to be applied was different from the usual as it would have been taking orders from different sources and then produce accordingly (Wheelen et al., 2017). This way it would be taking smaller orders and shipping to a larger number of consumers. This model challenged the company’s model of Tons R Us. The given report will elaborate further into the business case and analyze it by using SWOT Analysis of the business idea. A PESTLE Analysis will also be used to further analyze the given case.

The first tool to analyze the given case study is the SWOT Analysis.

Swot Analysis can be described as a tool which can be used to understand the Strengths, Weaknesses, Opportunities and Threats relating to a particular business idea or planning of a project. Very often this tool is used to understand the validity and capability of different business ideas. Using SWOT Analysis business is generally able to find out answers for extremely valuable questions.  Generally the Strengths and Weaknesses of the business relate to the internal aspects of the company whereas the Opportunities and Threats relate to the external environment components of the business.

• Strengths: These are the components of the business that provide the business and opportunity over other aspects in the same field (Barney, 2014). 
• Weaknesses: The weaknesses can be described as those characteristics which can be a threat to other relatives
• Opportunities: The opportunities can be described as those components that are present in the outside environment and can be utilized by the firm to its advantage.
• Threats: On the other hand the threats are similar to the opportunities and are those components which can be bad for the business.

The SWOT Analysis of the business case has been given as follows:

• Reputation in the market place- The Company has a good reputation in the market place. This reputation can help the company in gaining advantage.
• Presence of expertise- The Company has a good expertise as it has been in business for a long period of time. It can use this advantage to this particular business case and gain expertise.
• Relevant popularity- The Company has good popularity and M& M is a very famous product. The idea of customization will attract a larger crowd
• Related occasions- Events is the key to success and therefore, it is extremely important that the company targets accurate marketing to reach out to the events (Armstrong et al., 2015).
• Discovery of advanced technology- As the company has been able to figure out a new technology, hereby the cost of small batches will be extremely low, and the company will be able to make the idea a success.

• There exists a shortage of relevant staff for the particular endeavor. There does not exist enough trust in the organization for the particular business idea and thus makes the organization vulnerable to a shortage.
• The business idea is different from the contemporary ideas and the company will not be able to gain advantage of economies of scale or take advantage of costs savings on delivery (Keller & Kotler, 2016).

• Events are the key to success- The Company needs to hire the event industry in order to make their business a success. People generally tend to order the products for different events and therefore it is important that the company has various ideas for the respective events and sees to it that proper marketing is being done to target events. These events may be business events like office parties, birthdays, appraisals or house events like birthdays, cocktail parties and others.
• Exploring to emerging markets- There are various emerging markets around the globe which can be targeted like the South-east Asian companies.

• The primary threat of the given business case is that the company`s competitors have come out with a new business idea that is similar to that Hershey`s (Hollensen, 2015).
• Another threat that exists is that the increase chocolate costs could tend to decrease opportunities for the idea.

PESTLE Analysis is a strategic tool which is used to analyze the external environment and the various components present. For the business case the following has been analyzed.

• Political- Different countries where the product will be shipped to have different policies and beliefs which is primarily governed by the political scenario of the given country (Brooks, Heffner & Henderson, 2014). The kind of government and the ideologies with reference to the product ingredients and concept has to be kept in mind.
• Economical- The economy of various countries around the globe has not been doing well. There exists intense competition around the globe and this has given rise to the marketing of various cheap chocolates products. Hence, m&m will not be able to find success in this scenario (Bresler & Lubbe, 2014).
• Socio-Cultural- The income group and status of the target market has to be considered. The product should be marketed in a way that it suits the income group the people belong to. This will help the company to get a better response.
• Technological- There is various advanced technologies available for which the given product needs to adhere to in order to compete with the different products.
• Legal- The legal laws and legislatures need to be kept in mind in order to see to it the company does not come under any suit by any other companies or for not following the quality standards (Foxall, 2014).
• Environmental-The quality standards need to be followed by the company for the given customized product. The ink which needs to be used must be edible and it should be seen to it that the company uses good quality inks to print on the chocolates (Foxall, 2014).
• Hence, there are various considerations that the company needs to keep in mind in order to market the given product and make it a success in the external environment of the business.

The traditional M & M`s candy make use of a normal business model which makes use of extensive production of large volumes, low costs and wide distribution networks to grocery stores and other stores were extensively adopted (Gillam & Siriwardena, 2013). This helped the company to save a large amount of money on the production as it was done in bulk. It also helped the company to save money on distribution as it distributed to a limited number of places whereby the transfer followed a chain like method. Lastly, the production costs were considerably low because of larger bulk.

For the customized products, the company has planned to follow a method which is quite different from the former business model (Newton, 2014). The company has aimed to produce in small bulks. This is because the production capacity of the business is not very huge and the products will be produced in lieu of the customer orders which will be received. Secondly this will lead to higher costs for the firm and in return higher costs for the customers as well. Lastly, previously the company used to distribute its goods to determined groups however, for the given concept it will be marketing its products to a large group of people preferably thousands of customers. Hence its mantra of Tons R Us will not be followed (Titman, Keown & Martin, 2017).

The management is generally used to the Tons R Us concept and it is very difficult to change their ideology However, the given recommendations have been made:

• The cost benefit analysis- As a manager, a cost – benefit analysis of the given idea could be performed in order to see to it that the venture which has to be undertaken by the firm is a profitable one and therefore it can be adopted by the company to prove to the higher management (Meffert, 2013).
• Proper presentation- A proper business analysis needs to be presented in front of the company which will help the firm to understand the minute details of the given idea. Only when the idea will appear confident, the approval will be achieved.
• A dummy test- They can run the given venture for a few months as a dummy test. If enough success is achieved then the company can go ahead with it.
• Pro forma balance sheet- By forming a template or a profit and loss account, the returns on the assets can be found out. Once this is done, the company can present it to the management and raised their resistance.

Conclusion

Therefore, from the given report it could be assessed that the customized m&m`s prove to be a good idea for the company which can be adopted by the firm and expanded in order to see to it that the revenue of the firm increases and the company can retain its position in the chocolate industry thereby adopting new innovative ideas.

References

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Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson higher ed.

Bresler, M., & Lubbe, I. (2014). Marketing management.

Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.

Brooks, G., Heffner, A., & Henderson, D. (2014). A SWOT analysis of competitive knowledge from social media for a small start-up business. The Review of Business Information Systems (Online), 18(1), 23.

Foxall, G. (2014). Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.

Gillam, S., & Siriwardena, A. N. (2013). Leadership and management for quality. Quality in primary care, 21(4).

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education Limited.

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Newton, P. (2014). What is the PESTLE Analysis?.

Titman, S., Keown, A. J., & Martin, J. D. (2017). Financial management: Principles and applications. Pearson.

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.