Question

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential.

Kit Kat is a chocolate-covered wafer bar confection created by Rowntree's of York, United Kingdom, and is now produced globally by Nestlé, which acquired Rowntree in 1988, with the exception of the United States, where it is made under license by H. B. Reese Candy Company, a division of The Hershey Company. The standard bars consist of two or four pieces composed of three layers of wafer, separated and covered by an outer layer of chocolate. Each finger can be snapped from the bar separately. There are many different flavours of Kit Kat, including milk, white, and dark chocolate.

Q: Discuss how a SWOT analysis can help inform strategic marketing decision making for KitKat.

Answer 1

Kitkat is from the house of Nestle and is distinguished because it has one of the most iconic taglines ever – Have a break, have a Kitkat. It is also differentiated from the normal chocolate brands because it is more of a wafer chocolate and not chocolate bars. Thus, because of this differentiation, there have hardly been competitors in the Kitkat space, although there is too much competition for chocolate bars.

SWOT analysis for Kit-Kat :

1. Strength:

(a) Unique offering :

The number 1 strength of Kitkat is its unique offering – A chocolate covered wafer which is loved for its taste by people.

(b) Quality management :

The quality management is superior and the same quality is distributed across the globe making people fall in love with the taste and consistency of Kitkat chocolate.

(c) Excellent tagline :

The brand has revolved its marketing strategy around the tagline – That you should take regular breaks during the break, and you can have a Kitkat at such times.

2. Weakness :

(a) Unauthetic :

A problem facing Kitkat is that in developing economies, there are many duplicate version of Kitkat available. Or there are regional players which come up with the wafer biscuit concept. Kitkat has to fight with such duplication vigorously.

(b) Breakage :

Another problem faced is during packaging. Because the biscuit is literally a wafer, it breaks easily and many times the consumer gets a broken piece of a wafer chocolate. This might result in the consumer getting frustrated.

3. Opportunities :

(a) Expansion :

For any FMCG company, more expansion means more revenue which in turn means more profit. The same is applicable for Kitkat. The more it expands in developing economies the more better it would be for the brand.

(b) Rural pentration :

In India, China or other such Asian countries, rural penetration is yet to be achieved and that is where Kitkat can do wonders by using its deep pockets and establishing itself in rural areas.

4. Threat :

(a) Competition :

Kitkat faces two kind of competition – Direct or indirect. Direct competition for Kitkat is very high from Dairy Milk. Dairy milk literally takes the first spot across the globe as the leader in chocolate market. As a result, kitkat always falls second and the gap between dairy milk and Kitkat is huge as well.

(b) Health conscious :

As people are getting more health conscious, they are replacing chocolates with other healthier snacks and therefore this will slowly affect the revenue of the brand.