1. What is the situation in 2005? Is this an attractive market? In 2005, the cookie market in France was suffering from general market maturity.
However, although it remained a massive market, its growth rate was somewhat
weaker than that of the global market itself. Moreover, a new trend had appeared in
France; growth rates in cookie market were driven by a shift in quality and higher
prices, whereas relative worldwide growth rates were pushed by the significant rise in
the volume of cookies produced (Bruno, H., A., 2014).
Big hitters, such as Kraft foods (present via LU), United biscuits and the German
Bahlsen GmbH & Co, dominated the cookie market in France, as they held
tremendous market shares and market power. On the other hand, small cookie
producers, without much funds and power were trying to survive and contest in local
The majority of cookies were sold in the shelves of supermarkets and hypermarkets at
75.1% (Bruno, H., A., 2014). As a result, the major retailers controlled the market and
held a great negotiating power, particularly over small manufacturers. Besides,
supermarkets and hypermarket chains offered private label cookies, by providing
consumers with lower-priced options, as well as premium quality products. In
particular, in 2005 supermarkets and hypermarkets held 23.4% share in the French
Sweet Biscuit Market (Exhibit 4, Bruno, H., A., 2014).
Regarding suppliers, there were a vast number of competitors in this market, which
means that manufacturers could easily switch to alternative providers, while large
companies could influence the prices of the raw materials.
Furthermore, in 2005 the biscuit and cookie industry had to face the competition from
alternative products. A wide variety of sweet snacks, other artisanal confectionery and
traditional treats, along with healthier substitutes and organic products were affecting
the demand for cookies. This...