Productivity and Technical Efficiency †Free Samples to Students

Question: Discuss about the Productivity and Technical Efficiency. Answer: Introduction The report discusses on the case study regarding Big chocolate. The big chocolate is the business term that is allocated to the multi-national chocolate food producers. According to the self-described fair trade promoters, that includes the Ghanaian cooperative Kuapa Kokoo, the Big chocolate companies are the Mondelez, which owns Cadbury, Mars, Nestle and the Hershey company. Big Chocolate also refers to the political and social effects of a unifying industry. The merged buying enables the large cocoa users to handle noteworthy impact on the economies and numerous of the poor African nations who rely on the cocoa production as a significant factor of the foreign trade. The discussion elaborates on a detailed analysis and synopsis of the Ghana and Nigeria cocoa production circumstances inclusive of a PESTEL. The report also discusses the analysis of the Hershey group and the growing cocoa shortage with and the Five Forces Analysis. Summary of the Ghana and Nigeria cocoa production In country of Ghana, cocoa is referred to as the king with the manufacture of the cocoa accounting for just under a sixth of the countrys Gross Domestic product (Kumi and Daymond 2015). More than three quarters of the farmers of the country define themselves as the smallholder farmer, which means that the cocoa farm is owned and sustained by the farmers who live on that property. The high operational costs are taking a toll on the Ghanaian cocoa industry. The small cocoa farmers from Ghana are smuggling their cocoa to the Ivory Coast where the cocoa is selling fifty percent more (Laven and Boomsma 2012). The reasons for the success of the cocoa sector are the favorable prices. A range of the models estimate the sensitivity of the production supply to the farm gate prices discover that the small-scale cocoa manufacturers in Ghana and Nigeria have responded in a positive manner to the price incentives. There is liberalization of the domestic cocoa marketing is also a factor for the suc cess of the cocoa sector. The internal marketing has become competitive in nature. The new buying system puts a steadier stream of money in the hands of the producers that gives the farmers working capital to buy manual labor and other inputs when required. The Cocobod maintains the quality of the cocoa. The quality upholding comes at a cost that includes the cost of ensuring that the lower quality beans are not mixed into the ones that are prepared for export and the costs of management. The cocoa production is an agricultural manufacture activity that provides a high level of income in the unit field. The amount of the capital that is invested by the manufacturers is also high when compared to the other agricultural production due to the demand for labor force being high and intense. PESTLE Analysis Political- Ghana had fallen victim to bribery and lawlessness after its independence and hence despite being rich in the department of the resources it could not prosper much. There are two distinct parties in which looks into the matters of the productivity of the country. There is liberalization of the domestic cocoa marketing is also a factor for the success of the cocoa sector. An assortment of the models estimate the sensitivity of the production supply to the farm gate prices discover that the small-scale cocoa producers in Ghana and Nigeria have answered in a positive manner to the price incentives (Srdjevic, Bajcetic and Srdjevic 2012). Economic- the exports of cocoa, gold and oil are the major returns generating resources for Ghana and Nigeria. Cocoa and gold together account for around seventy percent of the exports from the country. However, due to the heavy reliance on these commodities, which have no value, addition to them makes the economy highly exposed and defenseless to the economic distresss. For instance if the prices of any of these commodities fall down then the economy will be hurt. The cocoa production reached an all high time between 2009 and 2010, but the reality was that the two respective countries were unable to put into operation the modern and the productive means of agriculture and the soil fertility that has been decreasing over the years. Social- To persuade the different ethnic groups to blend the government has implemented diverse policies. Nevertheless, there is poverty, the lack of education, diseases, vulnerable rural livelihoods and difficult labor conditions. Technological- The countries have shown tremendous growth in research and development and have spent a major portion of their Gross Domestic product on relevant activities. However, the science and technology needs to be developed. Legal- the government of Ghana and Nigeria has embarked vigorous campaigns in various forms to ensure a healthy workforce by the promotion of cocoa and its derivative products. For maintenance of the reputation of the high quality of the cocoa the Ghana Cocoa Board and the Quality Control Company Ltd. has been implemented for SPS related projects. Environmental- The World Wildlife Fund had made an alignment with the NGOs at Ghana and Nigeria to preserve the forests and the forest life. Analysis to the world's growing cocoa shortage Milton Hershey established Hersheys after his caramel company was a hit. In 1894, the company introduced Hersheys cocoa that was the very first product available to the public. Thus the brand of Hersheys was born. Hershey is a member of the World Cocoa Foundation. The company produces a variety of products that are chocolate and candy based (Beg et al. 2017). The company has been criticized for not having programs to ensure sustainable and ethical cocoa purchase (hersheys.com 2017). The company has none policies to produce cocoa that has been devoid of the use of labor misuse and they have refused to make available public information about its cocoa resources. As of August 24 the Hersheys Company it at the price of $105.52 with a volume of 2,298,937. The Hersheys Food Corporation holds the top position is the U.S. confectionary market. The name is identical with chocolate. The company operates in two main divisions, Hersheys Chocolate North America and Hershey International, the latt er exports the products of the firms to over 90 countries. The company is renowned for its major candy brands and also markets grocery products that are used for the purpose of baking. The global cocoa production has been down in the recent years due to handful of factors that also includes climate and crop failure while the demand has been on the rise. The cocoa bean shortage has resulted from the plagues and cost the farmers around $700 million in losses each year and is a concern for the Hersheys Chocolate, Mars and Incorporated who together produce three quarters of all the chocolate products that are sold in the United States each year. Five Forces Analysis Threat of New Entrants- The threat of the new entrants is low due to the existence of the economies of scale, difference in products, need for large capital requirements, lack of the distribution channels and regulations which are in place for the food manufacturers (E. Dobbs 2014). Bargaining power of the buyers- The number of large volume of the buyers and the buyers relatively low profits from the product increases the bargaining power of the buyers. It is low because of the differentiated products in the industry and the presence of the switching costs and the lack of backward integration. Bargaining power of the suppliers- The bargaining power of the suppliers is decreased due to the industry being an important consumer of the supplier group and the supplier does not pose a threat of forward integration. The bargaining authority is reasonable to high as this supplier group is concentrated. There are no substitute products and the importance of the supplier of the supplier product to the industry. Threat of substitute products and services- The threat of the substitutes are high in the cocoa industry. The industry has to compete with other alternate cooking flavors as vanilla and lemon. There should be competition in the retail arena also. The competition should also be with the non-chocolate snacks and other alternatives. Intensity of Rivalry among Competitors in an industry- The intensity of the opposition is high. There are equally balanced contenders that are slowly growing and have high storage and fixed costs and high exit barriers. These create the price wars, battles in advertising, new product lines and higher value of the customer service in the chocolate and cocoa industry. Conclusion Thereby, the report elaborates on a detailed examination and synopsis of the Ghana and Nigeria cocoa production situations inclusive of a PESTEL. The report also discusses the analysis of the Hershey group and the growing cocoa shortage with and the Five Forces Analysis. The big chocolate is a commerce term that is allocated to the multi-national chocolate food manufacturers. According to the self-described fair trade supporters, that includes the Ghanaian cooperative Kuapa Kokoo, the Big chocolate companies are Mondelez, which owns Cadbury, Mars, Nestle and the Hershey company. Big Chocolate also refers to the political and social effects of a unifying industry. References Aneani, F., Anchirinah, V.M., Owusu-Ansah, F. and Asamoah, M., 2012. Adoption of some cocoa production technologies by cocoa farmers in Ghana.Sustainable Agriculture Research,1(1), p.103. Beg, M.S., Ahmad, S., Jan, K. and Bashir, K., 2017. Status, supply chain and processing of Cocoa-A review.Trends in Food Science Technology. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry analysis templates.Competitiveness Review,24(1), pp.32-45. hersheys.com (2017).HERSHEY'S | Products Nutrition. [online] Hersheys.com. Available at: https://www.hersheys.com/en_us/products.html [Accessed 25 Aug. 2017]. Kumi, E. and Daymond, A.J., 2015. Farmers perceptions of the effectiveness of the Cocoa Disease and Pest Control Programme (CODAPEC) in Ghana and its effects on poverty reduction.American Journal of Experimental Agriculture,7(5), pp.257-274. Laven, A. and Boomsma, M., 2012. Incentives for sustainable cocoa production in Ghanamoving from maximizing outputs to optimizing performance.Amsterdam: Royal Tropical Institute. Lee, H., Kim, M.S. and Park, Y., 2012. An analytic network process approach to operationalization of five forces model.Applied Mathematical Modelling,36(4), pp.1783-1795. Oluyole, K.A. and Taiwo, O., 2015. Socio-economic Variables and Food Security Status of Cocoa Farming Households in Ondo State, Nigeria. Oluyole, K.A., Emaku, L.A., Aigbekaen, E.O. and Oduwole, O.O., 2013. Overview of the Trend of Climate Change and Its Effects on Cocoa Production in Nigeria.World Journal of Agricultural Research,1(1), pp.10-13. Onumah, J.A., Al-Hassan, R.M. and Onumah, E.E., 2013. Productivity and technical efficiency of cocoa production in Eastern Ghana.Journal of Economics and Sustainable Development,4(4), pp.106-117. Oyekale, A.S. and Oladele, O.I., 2012. Determinants of climate change adaptation among cocoa farmers in southwest Nigeria.ARPN Journal of Science and Technology,2(1), pp.154-168. Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure.Water resources management,26(12), pp.3379-3393.