Lindt Executive Summary

Economic Distance

Demand is dependent on income: rising dispensable income and growing middle class in China creates more demands

Lindt has devoted to making high-quality chocolate since 1845 and its products have been recognized as the premium by the whole world. Compared to local chocolate companies in China, Lindt offered a wide variety of higher priced chocolate from “Excellence” to “Praline Hochfein”1, which are often referred as “luxury”. Thus, the premium products Lindt offers cannot reach a certain amount of low-income people and should set the target market among the high-income group.

Nowadays China has become one of the largest economies in the world with a bright market. The growing number of middle class and the greater purchasing

In the year 2013, among the first-tier cities in China, high-end chocolate products have been highly accepted by chocolate gourmet and high-end consumers, who represents 12.5% of all chocolate consumers8. While launching into the Chinese market, income factor should be recognized with high importance. The sheer weight of Chinese numbers makes the area compelling for chocolate producers. Double-digit economic growth, more than a million millionaires and a taste for luxury may spell higher profits in the

The products of Lindt & Sprüngli mainly rely on two kinds of cocoa beans: fine grade cocoa for the manufacturing of premium products and Forastero cocoa for the filling process. Fine grade cocoa is purchased through traders at a substantial premium price over ordinary bulk cocoa while Forastero cocoa is procured from Ghana1, where one of the top quality Forastero beans come from and where a premium price is paid for. Through purchasing cocoa beans in large quantities, Lindt is able to negotiate the purchasing price and reach economy of scale