MBA: Case Study Template

General Environment
Internal Environment
Competitive Advantage
Imperfectly Imitable“Costly to imitate”
Inter firm Rivalry
Bargaining Power of Buyer
Bargaining Power of Supplier
Threat of new Entrants
Threat of Product Substitutes
Company Strategy

Here is an example of a case study I created using the outline:

Case introduction:

PKG Capital a large US based Private Equity firm has a substantial stake in Kraft Foods since 2001 (@ $31 ps) and are considering selling their share. This is after Kraft share price is declining and there had been a friendly, then subsequently hostile takeover bid to purchase Cadbury’s.

Cadbury’s is in the confectionary space and includes products such as Chocolate (48.6%), gum (12.5%) and sugar treats (34.6%), with cereal bars the remainder.

COGS: ~ 35%

33% Asia, 30% sugar comes from South America

Cocoa from Africam Asia and South America

StrengthsGrowing confectionary market @ 3%3 largest purchase category behind soda and milk.Market leader in the Chocolate category, which accounts for  48.6%Positioned for greater margins. (Commodity prices are in decline reducing COGS)
WeaknessesRetailers making 30% margin and squeezing manufacturers (who make 12%)Single industry (not diversified)Private labelsLow barriers to entry for new playersHigh capital and overhead costs which require high utilization to offset the overhead and operational costsRequires brand constant innovation and marketing to stay relevant due to appeal being driven by brand advertising and packaging.
Competitive Advantage
Imperfectly Imitable“Costly to imitate”
Social/CulturalHealth product revolution – smaller portion, fat content. CSR
Political/LegalTheir position as a major employer in BritainKraft is a US company and taking over a national brand
EconomicMarket decline in 2008
GlobalCorporate social responsibility, fair trade 
Bargaining Power of BuyerHigh, lots of suppliers of RM’sFactories close to suppliers
Bargaining Power of SupplierLow, options
Threat of new EntrantsHigh – anyone can technically make chocolate, but obviously scale is not easy
Threat of Product SubstitutesHigh – Health conscious alternatives, power bars, etc.
Inter firm RivalryHigh – retail space is a constant battle for shelf space 
Company StrategyKraft – 4 building blocks
RecommendationsFrom a manufacturer’s perspective, how attractive is the global market for confectionary?Why has Cadbury become a takeover target?Why does Kraft want to purchase Cadbury? Does the proposed deal make sense for Kraft? How about for Cadbury?What is Cadbury’s value to Kraft? In other words, what should Cadbury’s purchase price be?Economies of scaleDo exist. As a ordinary Food manufacturing industry, confectionaryindustry also has economy of scale. Large amount of output lower costs ofnearly all functions of production process. Buying more ingredient can directly bring in a bargaining advantage when negotiating with suppliers,and a large amount of output makes a high-cost production line worthwhile,So there will be less need of labor and better standardized products. 1.2Product differentiationNot vary high. Though Cadbury has its own brand of chocolate, the recipeof chocolate doesn’t differ much in The industry. 1.3Capital requirementsVaries. Confectionery can be a one-person corner shop to a giant globalcompany like Cadbury, Mars and Nestle. In China, starting up a smallestcandy shop Only needs less than 100000 yuan (about 14529 US dollars).1.4Switching costsHigh. Production lines and invisible assets like recipe or production patent of a confectionery company are usually highly specified, so that cannot be easily used for other needs.1.5Access to distribution channelsHigh. Current confectionery manufacturers mostly rely on wholesalers andother middleman to deliver their products from factories to supermarketsand grocery stores. And these middlemen are willing and happy to signcontract with many different brands in order to provide a wild range ofproducts to its customers. Confectionery ingredients are all standard andlack of differences, so there are nearly zero switching cost about theseproducts.1.6Access to raw materialsEasy. Candy and chocolate require no unusual materials, it only needssugar, coco beans and some food additives. It is not complex nor difficultfor new entrants has its access to raw materials
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