Case Study: Rogers’ Choclates

CASE 9 Rogers Chocolates Strategic Management INTRODUCTION Rogers Chocolates is the oldest umber connection in Canada establish in Victoria, British Columbia. Rogers Chocolates focuses on the tribute cocoa commercialise and differentiates itself by delivering award winning attribute fruits at a sporty impairment this conspiracy creates a good valuate for its customers. They also create expertise at creating an outstanding customer bugger off within their Victorian themed retail locations that devote also won awards.The political party is privately held and currently focuses its business in four foodstuff place argonas, devise retail , online/mail order , sell, and sales from a restaurant in Victoria. The fellowship also produces and sells a line of premium ice cream. The caller-out employes 130 people, the majority of which are in retail. Sales from the companys retail establishments mark for 50% of revenue. proceedsion takes place on a one-shift operation in a 24,000 square foot facility and is labor intensive. at that place are currently no measurements in gauge productivity and efficiency in the plant. The past president focused a egression strategy in the in large quantities market and current order fulfillment strategy is to go against priority to online and mail-order business, followed by wholesale accounts, leaving the retail locations last to be processd internally. Sales have seasonal swells during the holidays and entreat omen has been an issue they have addd fund to deal with these sales patterns but still take care out of stock situations.The bracing president has been given a mark by the board of readors to double or triple the size of the company within 10 years. PROBLEM STATEMENT The focus on the wholesale market does not inline with the strengths of the company. Furthermore, the issues in operational efficiency with regard to turnout capabilities and pack forecasting are hindering the company from gaind m aketh potential. ALTERNATIVES revolve about on strengthening current retail trading operations. Focus exploitation the retail business into overbold geographic markets.Continue to raise complementary color business lines (ie. Ice Cream) Develop core competence in operations management to drive efficiencies and reduce inventories. Upgrade technology in toil to increase capacity Create youthful product lines and packaging to pass the customer base. Franchise Sams Deli. Franchise retail chocolate stores. ANALYSIS In 2006, the chocolate market size for Canada was US$167 million with the premium chocolate market growing at a rate of 20% annually.contention within the premium market is a broad mix of slim local niche players to large multinational corporations and is growing as bigger traditional manufacturers enter the market via acquisitions or untested product launches. Product differentiation is healthy and there are no indications of a price war starting between rivals. Pr oduct innovation appears limited, mostly pore on newfound flavor introductions and variations in molding and coloring.Seasonal demands, oddly the eight weeks prior to Christmas, can create demand that can scrap weakened companies with low production capacity and/or inadequate forecasting and inventory management. Competitors vary in the level of vertical integration and companies with large-scale operations and dispersion networks enjoy a competitive advantage through with(predicate) economies of scale. Rivalry among competing sellers is active and beauteously strong overdue to the following conditions There is little to no equal for buyers to switch brand. There is a fair amount of product standardization in the industry.The products in the chocolate market have large seasonal swells and are perishable causing almost price competition. Higher fixed production costs adds to this drag. The addition of new competition by established companies such as Hersheys and Cadburys. Competitive pressure from potential new entrants is medium as most of the major players in the industry are already in the premium chocolate market the projected growth rate in the market will powerfully attract new upstarts but they will have challenges developing distribution and retail penetration with little to no brand awareness.Firms in early(a) industries will have little impact in this market as there arent any strong substitutions to premium chocolate. Competitive pressures stemming from supplier negotiate is mixed large-scale manufacturers will enjoy less pressure from suppliers due to economies of scale while smaller niche companies will not have as much influence, especially in the area of organic and fair trade raw materials. Pressure from the buyer community is fair demand is highschool but so is the ability to switch brands.Growing demand for socially responsible products, such as fair-trade and organic will increase pressure from the buyers. The current driving f orces in the market are the high growth rate in the premium market and the entrance of new major firms consumers emerging interest in fair-trade and organic products is also a force to be considered. Key success factors in this market take a well known and respected brand and strong direct sales and/or wholesale distribution quality and efficient production capabilities are also key success factors.Although profit margins are down, Rogers Chocolates is in a strong monetary position. Retail accounts for 50% of the companys revenues although the two new stores in the companys portfolio are not performing to expectations. Ice cream sales, although small compared to retail, show a strong contribution to overall sales. The key financial indicators are shown below one area of concern is the major increase in the days of inventory and the accompanying decrease in inventory turnaround.This is a concern due to the perishable nature of the product and the negative affect on customer quality perception when product is sold past the expiration date which has occurred with some sales via wholesale accounts. drawframe A SWOT analysis of the company has cancelled up the following points STRENGTHS a distinctive competence in retail, specifically the customer association a strong financial base to grow the business a strong regional brand and company composition to build upon better product quality relative to rivals ood customer service capabilities in retail and online sales. WEAKNESSES weak wholesale network brand/company awareness is poor outside of the region weak supply range of mountains competences in forecasting problems with operational efficiencies with old technology and high cost changeovers. OPPORTUNITIES expansion into new areas entering into alliances or joint ventures to expand market coverage continued expansion of complementary products (premium ice cream) explore new technology within production THREATS increased competition by new entrants in the mar ket slowdown in market growth hift in buyer needs and tastes RECOMMENDATIONS I believe that Rogers Chocolates should implement a combination of the following alternatives Focus on strengthening current retail operations. Focus growing the retail business into new geographic markets. Continue to grow complementary business lines (ie. Ice Cream) Develop core competence in operations management to drive efficiencies and optimize inventories. The Rogers Chocolates brand has been built based on a high quality product and the retail experience of their Victorian themed shops and packaging.This is their core competence and strength and it should be the focus of their growth. By solidifying the performance of the current locations and then opening additional stores in new areas the will expand their brand recognition while preserving the quality of their product. There ice cream line is complementary to the business and should be further developed and sold in the stores. Internally, and ope rational strategy to purify efficiencies in production and demand forecasting will reduce costs, save up product quality and optimize production and inventory capabilities.