Business strategy: discussing focus and adaptation

B2
90 min
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1

Think about these questions before watching. Share your ideas with a partner.

  1. Think of a brand that is famous for doing one thing very well. What are the advantages and potential disadvantages of this highly focused business strategy?
  2. Describe a time you noticed a global product, like a snack or a fast-food item, was different in your country compared to how it is elsewhere. Why do you think the company made that change?
  3. If you were launching a new company, would you aim to be the best at one specific thing, or would you try to offer a wide range of products to appeal to more people? Explain the reasoning behind your choice.
2

Watch the video carefully. Pay attention to the main ideas and key details.

Video script151 segments · click a timestamp to jump

- [Narrator] When you open a bag of Haribo Goldbears

in the US, you'll notice that there are more red bears

than there are of any other color.

That's on purpose.

Haribo found that US consumers

prefer raspberry-flavored bears,

so they tweaked the mix in production.

Today, the company's Wisconsin factory

churns out 60 million Goldbears a day,

and it's this factory that Haribo is betting on

to take on the US candy market.

This is the economics of Haribo.

Haribo is one of the largest

gummy candy manufacturers in the world,

thanks in part to a simple strategy: focus.

- A lot of the bigger companies

have these very diversified businesses.

- [Narrator] Hershey, best known for chocolate,

now makes pretzels and dipped fruit snacks.

And Ferrara owns brands across hard, chewy,

and powder-based candies.

- And it just allows them

sort of to have something for everyone

versus just having really a single product

that you're marketing all year long.

- [Narrator] But Haribo goes the other way,

focusing primarily on gummy candy,

and that focus is an advantage.

- They are pretty much a one product company.

It's really just simplicity of production.

If you even think about like in your home kitchen,

if you were just making one meal

over and over and over again,

you really only need a certain set of ingredients,

a couple pots and pans.

In an industrial context, it's really the same.

- [Narrator] In the US,

the company uses select core recipes.

- It gives us expertise

so that when we want to make a flavor change

or a texture change, it allows us to tweak things.

- [Narrator] And at scale, gives the company an advantage

in negotiations for equipment and ingredients.

- The leverage it gives us is just the fact

that we're buying more of one thing.

When you are able to buy more of something,

you get volume discounts.

It gives us economies of scale.

- [Narrator] But-

- If your particular product isn't the one

that's currently on trend, then you can sort of lose out.

Efficiency only benefits you

when you are efficiently making something people want.

- [Narrator] So knowing exactly what consumers want

is key to staying on top of demand.

And in fact, creating more demand.

That's why-

- Having facilities that are local has definite benefits

in the sense that you can just really be closer

to your consumer.

- [Narrator] That strategy is clear

in Pleasant Prairie, Wisconsin.

Home to Haribo's first US production facility,

a 500,000 square foot factory that opened in 2023.

Before the factory-

- We were importing 100% of our product.

- [Narrator] Getting Haribos to the United States

used to take months.

- It could be up to 12 to 14 weeks

because it had to be made in Europe,

and then it went through Rotterdam,

then it went on a very long boat journey.

- [Narrator] Now it's a matter of weeks

with the Wisconsin factory

producing about 25 different types of gummies,

and the Wisconsin base is key

to determining what Haribo makes in the US.

- The faster you can react, the better your sales are.

- [Narrator] Local offices run focus groups

and can develop new products accordingly

in shorter periods of time.

- We ask about both texture, flavor,

but how you're gonna use the product.

We also do the same testing for packaging

'cause packaging also plays an important role.

- [Narrator] All that feedback

drives a very specific insight.

What's considered good varies by region,

and Haribo tailors accordingly.

Take this bag of Starmix.

In the US, the original mix

included Goldbears, Happy Cola, Friendship Rings,

Twin Snakes, and Happy Cherries.

But after learning American consumers

wanted the Fried Egg and Foam Heart gummies

they saw in the UK version,

Haribo swapped in those marshmallow textures.

This strategy plays out

across Haribo's 16 factories worldwide.

The company's manufacturing facility in Turkey, for example,

makes Halal certified products to meet local demand.

- In the Scandinavian country, Denmark, Sweden,

they love licorice and they love strong licorice taste

and even salty products.

This wouldn't work in other markets.

So the decentralized structure helps us to be agile

and to react on development in different markets.

- [Narrator] If demand is strong enough,

Haribo will also expand its horizons.

Take the Chamallow, the only Haribo product

that includes chocolate.

An existing marshmallow product was the base,

but market research in Belgium

showed demand for a chocolate version,

so Haribo launched it there,

and Haribo can use its larger international portfolio

to its benefit.

- One of the big things that US candy companies are facing

are a lot of pressure from federal and state policymakers

to transition to natural food dyes.

- [Narrator] Some Haribo products made in the States

still have Red 40 in the ingredients,

but the company already uses fruit and vegetable juices

for color in other products and in other countries.

- We, in our current portfolio,

have different types of coloring agents,

different kinds of flavoring agents,

so we feel very prepared to do things different,

or if there's regulations that change,

having this factory gives us the agility

to make those changes.

- [Narrator] Today, Haribo produces

more than 800 different products around the world.

And in the past year alone,

Haribo has added 2.6 million new American households

to its customer base.

- Different candies have their moments in the sun.

Gummies are really going gangbusters right now.

- [Narrator] Sugar candy sales are up 74% since 2020,

and with cocoa prices historically high-

- You're seeing a lot of the big confection companies

rolling out, you know, new gummy products as a result.

- [Narrator] So for Haribo-

- On the one hand, it's great, you know,

they've probably got a lot of demand for their core product.

On the other hand,

it is inevitably going to mean more competition.

They just have to be really nimble and adaptable

and keep trying to appeal to consumers with new products

to keep the sort of fire alive for gummies

as long as they can.

3

Answer these questions in your own words. Support your answers with evidence from the video.

01How does Haribo's core business strategy differ from that of competitors like Hershey?
Sample answerHaribo's strategy is to focus almost entirely on one product category: gummy candy. This is different from competitors who have very diversified businesses, selling everything from chocolate to pretzels and hard candies.
02What are the main advantages for Haribo of having a production facility in the US?
Sample answerThe main advantages are speed and proximity to the customer. It reduces the shipping time from over 12 weeks to just a few, and it allows them to conduct local focus groups to react much more quickly to what American consumers want.
03In what way does Haribo's approach to product development demonstrate a 'decentralized' strategy?
Sample answerIt's decentralized because they don't just make one standard product for the whole world. Instead, their local factories can adapt products to local tastes, like making Halal gummies in Turkey or salty licorice for Scandinavian countries, which wouldn't be popular elsewhere.
04According to the video, what is the biggest challenge Haribo faces due to current market trends, and how is its business model prepared for it?
Sample answerThe biggest challenge is increased competition, as the popularity of gummies is causing other big candy companies to enter the market. Haribo's business model is prepared because its focus gives it expertise, and its local factories allow it to be agile and adapt quickly to consumer demands to stay competitive.
4

Key vocabulary for business strategy

Vocabulary
These expressions will help you discuss business strategy and market trends more effectively.
Examples
To corner the market — to gain control of a particular area of business, making it difficult for competitors to succeed.
Usage note: this idiom implies an aggressive and successful strategy. It's often followed by 'on' or 'in' a specific product or service. Example: 'The company's goal is to corner the market on sustainable packaging.'
To put all your eggs in one basket — to risk everything on the success of one plan or venture.
Usage note: this is a common idiom, often used as a warning against a lack of diversification. You can use it to talk about the potential risks of a focused business strategy like the one in the video.
Core competency — a specific skill or area of expertise that gives a company its main competitive advantage.
Usage note: this is a common semi-formal business term. You can say 'A company's core competency is...' or 'They focus on their key core competencies.' For Haribo, a core competency is efficient gummy production.
To ramp up production — to significantly increase the rate or volume of manufacturing.
Usage note: this phrasal verb is often used when a company needs to meet rising demand or prepare for a product launch. Example: 'They had to ramp up production to meet holiday orders.'
To stay ahead of the curve — to be more innovative and proactive than your competitors by anticipating future trends.
Usage note: this idiom is the opposite of 'being behind the curve.' It describes a company that successfully predicts what consumers will want next. Example: 'To succeed, tech companies must constantly invest in R&D to stay ahead of the curve.'
5

Decide if each statement is true or false based on the video. Correct the false ones.

01The video states that Haribo's factory in Turkey specializes in producing chocolate-covered marshmallows.
02The mix of gummy bears in US bags was adjusted because American consumers showed a preference for the raspberry flavor.
03Haribo is well-prepared for potential changes in US food dye regulations because it already uses natural colorings in other countries.
04Before opening its US factory, it took Haribo approximately 12 to 14 days to import its products from Europe.
05The video suggests that due to high cocoa prices, major chocolate companies are leaving the gummy market to specialists like Haribo.
6

Complete the sentences with words from the box. One word is extra.

Word bank
01Many tech companies start with one product but eventually into other areas like cloud computing and hardware to reduce risk.
02The company was able to its strong brand recognition to successfully launch a new line of products.
03Instead of competing with the big players, the small startup found a market for handmade, sustainable pet toys.
04To cut costs and improve efficiency, the new manager decided to the company's complex approval process.
05Businesses that fail to to changing consumer preferences often find themselves falling behind their competitors.
7

Choose the best answer based on what you heard in the video.

01According to the video, how does Haribo's focused production strategy provide a financial advantage?
02What potential disadvantage of Haribo's 'one product company' approach is mentioned in the video?
03How did Haribo adapt its Starmix product for the US market?
04Which of the following is NOT mentioned as a benefit of Haribo opening a factory in the US?
8

Haribo's Business Strategy

Test your understanding of Haribo's business approach and related vocabulary.

Match each item on the left with the correct item on the right.

A
B
9

Discuss these questions with a partner. Try to use vocabulary from the lesson.

  1. The video suggests Haribo's focused strategy is a key to its success. Do you think this approach of developing a single core competency is a sustainable way to stay ahead of the curve, or is it a risky case of putting all your eggs in one basket in today's fast-changing market?
  2. Think of a successful company from your country that, like Haribo, has a very strong core competency. How did they manage to corner the market in their specific niche, and what risks might they face if they don't diversify?
  3. Imagine a successful company known for its one core competency suddenly decides to diversify into new, unrelated products. What challenges might they face when trying to ramp up production and compete in these new areas? Could this move damage the brand's reputation?