Ferrero Group is a confectionery manufacturing company, which makes chocolate spreads and chocolates with hazelnut as its primary product. The firm is the biggest buyer of world hazelnuts (25%). The firm procures hazelnut the world's biggest producer of processed hazelnuts with a market share of 25% to 30%, from Oltan. Ferrero buys nearly 70% of the hazelnut production of Oltan. This has raised the costs of hazelnut.
Esha is contemplating the vertical integration, in which it may consider buying the big companies including Oltan of Ferrero. Further, she's also assessing the consequence of this kind of strategy on closing market prices of Nutella.
PUBLICATION DATE: May 01, 2016 PRODUCT #: IMB565-PDF-ENG
This is just an excerpt. This case is about TECHNOLOGY & OPERATIONS
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