Competitive Position of Thorntons - Essay Example

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Name Institution Course Instructor Date Competitive Position of Thorntons Analysts can assess the competitive status of an organization, company or an industry by use of the Porter’s five forces model that helps in determining the position and the competitive strength of an organization…
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Competitive Position of Thorntons
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Download file to see previous pages In case of Thorntons, their competitive nature is indeed numerical and the company can generate and withstand different levels of income in reference to its structure. The competition nature of Thorntons is advantageous since the company operates on seasonal bases. Therefore, business becomes partial as government influences rising cost of energy by use of economic factors that may influence positive results on cost of production as well on total sustainability cost. Furthermore, microenvironment is another Thorntons position of competition. Performance indicators like level of growth, volume of sales, and price of shares reveal that this company has a higher competition position. This is prevalent due to amount of revenue collected in 2010 shrunk to 0.1 percent because of challenges the company underwent. Additionally, Thorntons witnessed significant loss of share price in the beginning of 2012. What caused this, according to Thorntorns, is the passing typical situation of its sales and the taking over of Cadbury by Kraft. However, Kraft’s take over of Cadbury affected Thorntons since the overall chocolate industry has grown by four percent which is a total of 3.6 billion a margin Thorntons cannot reach hence they cannot compete. Despite the huge potential Thorntons have, their competitive position continue to dwindle since its profit earnings dropped by 0.1 percent at the fiscal end of June in 2010 compared to revenue earnings of 2009. As a result, the company’s operating cost increased thereby crippling its strategic operations. Thorntons level of competition is high since the company has clean reputation of over a hundred years in market. This serves it as a marketing tool. It is also multi-generational, as many people in Great Britain perceive the idea of chocolates is synonymous with the Thorntons. Due to franchise dollars that help the company bring in fiscal earnings over time, the level of competition continue to build and portray significance sense of market growth. In relation to Porter’s five forces model, if Thornton’s wish to survive the current stiff market competition, it must put into consideration the following industrial contexts in order to help itself surpass this agony. First, they should evaluate the power of their suppliers. In spite of the advantage that they run their own stores, there is still deteriorating performance within its operations. Therefore, they should better their understanding of profits by differentiating the impact of inputs on cost, providing presence of substitute inputs in case of changes in market trends, and confirm their relative cost to total purchases (Hill & Jones, 2009:54). This will in turn reduce their operating costs hence achieve maximum benefits. In order for Thorntons to solve their relative issues, they should consider exploring other markets and produce other products as opposed to their niche commodities. Then using buyer power, which is one of Porter’s five forces model, they should seek to provide variety of other products to increase buyer’s volume of purchase. They should also consider offering incentives to their prospective clients as part of enticing them, making them repeat customers thus fostering market expansion. It is clear that the management is striving to transform the operating length of the company into annual bases. However, the effort put is not adequate. Thereby, ...Download file to see next pagesRead More
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