Page 52 - FINAL CFA SLIDES DECEMBER 2018 DAY 13

LOS 48.i: Compare characteristics of Session Unit 14:

representative industries from the
48. Introduction to Industry and company analysis
various economic sectors., p.274

To illustrate the long list of factors to be considered in industry analysis, we use the

following strategic analysis of the candy/confections industry.

• Major firms: Cadbury, Hershey, Mars, and Nestle.
• Barriers to entry and success: Very high. Low capital and technological barriers, but consumers

have strong brand loyalty.
• Industry concentration: Very concentrated. Largest four firms dominate global market share.
tanties
• Influence of industry capacity on pricing: None. Pricing is determined by strength of brand, not
production capacity.
• Industry stability: Very stable. Market share changes slowly.

• Life cycle: Very mature. Growth is driven by population changes.
• Competition: Low. Lack of unbranded candy makers in market reduces competition. Consumer

decision is based on brand awareness, not price.
• Demographic influences: Not applicable.
• Government influence: Low. Industry is largely unregulated, but regulation arising from concerns

about obesity is possible.
• Social influence: Not applicable.

• Technological influence: Very low. Limited impact from technology.
• Business cycle sensitivity: Non-cyclical and defensive. Demand for candy is very stable.