Rogers Chocolate Essay Example for Free

Rogers deep brown undertakeIntroduction R gerss coffee beans is Canadas oldest coffee berrys company that was formed in 1885 in Victoria, British capital of South Carolina by Charles Rogers. The company redundantized in producing different varieties of ward winning hand-wrapped, naughty- whole step chocolate brands as tumesce as aid novelty ice cream which it sold with its retail outlets, exchanges through wholesale deliin truth, online/phone sales, and through Sams Deli restaurant in British Columbia.The address of the face is to double or triple the size of it of the company within 10 historic period (Zietsma, 2007) Rogers purport mart is both end dors and consumers who profane chocolates to indulge themselves or to give as a gift. Rogers orient buyers atomic number 18 in the buff and existing chocolate buyers that love quality chocolates. Demographics tend to be mainly women ages 25-55 years old with middle to high household income of $50,000 upward. They generally wipe out college education and atomic number 18 professionals, white-collar workers, managers, or owners. The majority will be frequent travelers on cruise ships and Internet users.In mark to rise up a succeederful growth plan for the Rogers Chocolates, it is very central to get an integrated understanding of the international and internal environment effecting the chocolate persistence in whole and Rogers Chocolate in particular. An organizations external environment re reconciles the opportunities and threats while commissioning three major atomic number 18as that include general, industry and competitor environment. The firms understanding of the external environment is matched with its knowledge about the internal environment (resources, capabilities, core competencies, organization, management etc.) in state to develop a strategic growth plan that will bring competitive advantage and above-average returns. outdoor(a) Analysis P. E. S. T Analysis Political /Legal * Legal issues regarding child moil in coffee farawayms. * African countries are more than affected by child labour. * Large manufacturers are seeking a redefinition of the term chocolate under USFDA guidelines so that they can produce cheaper version of the product and palliate make it chocolate. Economic * Falling growth rate in the chocolate industry due to economical computes.* delinquent to seasonal vulnerability of the product, it is hard to manage inventory resulting in higher costs for wasted material. * higher(prenominal) cleaning and maintenance costs for the equipment for titanic producers. * Sociocultural * Increasing trend towards healthier diet, organic food, moo-trans blubber and no-sugar chocolate. * More motivation for dark chocolate due to its heart-healthier anti-oxidant properties. * Consumers and employees stressing on more corporate social responsibility. * forgiving rights concerns on forced labour in West Africa. * Environmental concerns influencing pack ripening, procurement and operational decisions.Technology * less(prenominal) focus of private and government supported RD expenditures. * Farmers are less efficient in growing cocoa beans because of lack of proper knowledge, education and training. Industry Analysis Even though there had been a in small stages decline in the growth of chocolate industry as a whole, there is still hazard in the premium chocolate sector of this industry, which is growing at 20% annually. The Canadian market size for chocolates was US$167 million in 2006 and it was projected to grow at 2% annually.The change in demographics with aging baby boomers and their emphasis on brand and quality has given an opportunity to traditional chocolate manufacturers the likes of Hersheys and Cadburys to shift their focus on the employment of premium quality chocolates. Rogers Company is confront with many factors that are directly influencing the company, its competitive actions and competitive r esponses in the overall industry. The Five Forces of Competition Model Michael ushers five forces of contestation is an analytical tool that can be for Rogers Chocolate to measure the saturation of the industry emulation and an industrys profit potential.Threat of New Entrants Hersheys and Cadburys are despicable towards the premium chocolate market through the acquisition or upmarket launches (Zietsma, 2007). The profit potential present in this sector supported by its 20% annual growth rate make it very attractive for large organizations to come forward and avail this opportunity. in that location is a low threat of new entrants prevailing in this chocolate industry because of the high capital requirements and expected retaliation by on-going manufacturers.Current players in the industry to a fault possess whatever barriers to entry for new entrants by maintaining economies of scales with their large mathematical product capacity and keeping their product differentiation with their specialized and novelty chocolate products. Even though there are low switching costs and easy access to distribution channels, but still the brand loyalty of the clients including the Rogers Chocolate itself make it harder for new firms to come into the competition. Bargaining Power of SuppliersThere is a high bargaining position of suppliers because of the need of the key ingredients required for chocolate manufacturing and limited number of suppliers for this industry. Since cocoa trees require tropical climate, it forces the main producers in the west to import them from countries in West Africa or new(prenominal) hot places where suppliers are dominated by few large companies The chocolate and cocoa industry relies on suppliers to deliver high quality products that meet food regulations and consumer taste tests. If the suppliers product is not available or does not meet the quality expected, the industry will suffer greatly.This dependency on the suppliers product and the absence seizure of replenishment products increases the suppliers bargaining force. Bargaining Power of Buyers Even though there are no shift products for the manufacturing of chocolate, the buyer classs are still powerful because they purchase a large portion of the industrys total output. Since there are many wholesale buyers of cocoa beans for the manufacturing and selling of the chocolate, it increases the bargaining power of the buyers that forces suppliers to inflict their prices or increase their product quality.An some different condition that affects the power of buyers is product differentiation. If the product is undifferentiated, the buyer has the power to play competitors against distributively other and reduce the cost. The chocolate and cocoa industry has a differentiated product, which reduces the power of buyers. The industry has several large players that cook brand identification and customer loyalty, which makes it hard for buyers not to use a par ticular supplier. Threat of Substitute Products Majority of the chocolate sales occur during the Christmas season and multitude buy chocolates to give as Christmas gifts or during the Valentines Day or Halloween.Other types of gifts during these occasions are considered as substitute products that may include flowers, jewellery, stuffed toys etc. legion(predicate) people consider chocolate as unhealthy while some people can use other flavours such as lemon, vanilla, earthnut butter or mint instead of chocolate that brings a low to moderate threat of substitute products to replace chocolate. Intensity of Rivalry Among Competitors The presence of a many and equally balanced chocolate producers increases the emulation among the competitors by permitting vigorous actions and responses by the competitors.With the slow industry growth, chocolate industry for instance, markets become more strong as companies battle to increase their market shares by attracting competitors customers. I t results in more price wars, marketing and advertizing battles between the competitors. Another factor that intensifies the competition and rivalry among competitors is the high storage and fixed costs that pushes chocolate producers to maximize their production capacity. In order to sell this bare capacity, organizations give purchase rebates and other special discounts to customers that increases the competition.Standardization and differentiation along with low switching costs in chocolate industry overly fuels competition. Competitor Analysis Competition in the chocolate industry in Canada is led by some regional brands along with a few larger producers. Major players in the market include Godiva (Nestle), Bernard Callebaut, Lindt, Purdy and a few local premium chocolate companies like Laura Secord and Rocky Mountain Chocolate Company. There are many factors influencing the competition in this industry that include variations in the price points and quality of different premi um chocolate product lines.Each individual company has its own unique technique to boost itself from its competitors. Many companies have their own fancy packaging styles for their products delivery that target different customers helping them in getting above average returns. Widespread distribution of products and attractive presentation and displays are some other potent tools that are adapted by many companies in this business offering them good returns on their investment. A company with good and intense marketing and advertising along with widespread geographical location gains more market share compared to the one that is limited to a certain area.Some companies have focused more on their mall outlets while some have taken spots in different phaeton attractions. For some companies, retail sales are more promising than wholesale strategy, which shows that selling strategy plays an important part in the success of a company. Even though all forces stated above hastens competi tion among these chocolate companies, product quality surface to have least impact on extent of competition (Zietsma, 2007). Attractiveness and profitability of chocolate products is determined by how the product is moulded, coloured, and packed (Ellis, M.et al, 2007).Key Success calculate Analysis Numerous factors that can add up to the successes of Rogers Chocolate are as follows Understanding and red-blooded Consumer Needs Part of the external analysis is to scan, monitor, forecast and assess the timing and importance of environmental changes and trends. In order for Rogers Chocolate to get strategic competitiveness, its very important that it understands the trends in the chocolate industry that are moving towards premium chocolate with high-quality and high-taste matched with classy packaging, beautiful retail experience and fair pricing.Rogers Chocolate already has award-winning reputation with its friendly customer service, pretty theme in its retail outlets with images and aromas. Customers buy premium chocolates for special events or for corporate gifts, so its very important that special focus is put on their attractive and unique packaging. Rogers Chocolate has it all. Rogers Chocolate needs to focus on the sale of its wholesale orders that constitute 30% of the total sales but it has been declining gradually due to inclination of the buyers towards other cheaper brands.It needs to reconsider its pricing strategy, marketing and relations with these customers. Extensive marketing in order make better brand awareness Regardless of Rogers Chocolate being the dominant player in the chocolate industry, it single occupies 7% share in the $167 million market. Premium chocolate is a growing sector with high profit potential and Rogers Chocolate has the ability to avail this opportunity if it extends its marketing strategy in order to grow in the near future. Pricing Strategy Price of chocolate product also affects success of producing firm.Companys Pric e of the product determines consumption rate of the product. Whether price is regulated by the organization itself or state-based decision, it affects demand of the product. Demand and price of any product are inversely related. Low market demand implies low net sales, which makes success of the company to be uncertain. Another aspect of price factor is in determination of production cost. Lower prices than other producers of the same type of commodity make production cost expensive. On the other hand, high price reduces market demand of any product.In a case where different companies sell similar product at different prices, companies using extreme prices are at risk of failing Geographical Distribution It is very important for the success of the company to have a widespread geographical distribution of its products. A company with many locations is more likely to have its customers familiarized with its products and image. Brand loyalty increases when customers know that their pre ferred brand is located not too far from them. Product Diversification Product diversification is applied in cases where stiff competition exists in the market. quite of maintaining production of only one type of chocolate product, modification in shape, color, and different composition ensures go on success of a company. Internal Analysis Strengths * Well-established and reputable Brand * Experienced Management Team * bountiful history and tradition in Canada * Award winning recognition * Revenues * Loyal customers * Devoted Employees and Passionate Employees * timberland products hand wrapped Weaknesses * Production process not efficient and no measuring capabilities * Demand anticipation difficult due to seasonality of sales * Managements and Employees resistance to change.* Management team conflicts * package * Lack of brand image and customer awareness * Cost of setting up and cleaning equipment * inscription Management Out of Stock and Over stock production planning issues * Decrease in wholesale * Online Sales only 4% Opportunities * Growth in European and Asian markets * Retail and Online expansion * increase production capacity * Trends and shifts in consumer confectionary market * Kiosks in airports * Organic trade line Threats * Economy and demand fluctuations * Competitors * Decreased number of tourists.* Environmental concerns and human rights concerns expressed by some consumers * USFDA guidelines for redefining chocolate Rogers Chocolate has 24,000 sq. ft. production facility with 110 non-unionized retail and production employees. 75 employees work in retail while 35 in the production. Hand making and hand packing made the chocolate production very labour intensive while big portion of the costs were that of set-up time and cleaning time for the equipment during the batch processing. There are no means of measuring the productivity and efficiency in the plant.Another issue faced by the Rogers Chocolate is its inability to forecast th e demand and hence the production of its products due to the seasonality of the sales. This problem is dealt with excess production to deal with the out-of-stocks during the peak seasons. The delays in the import of art tins for assortment from China also get to the schedule off for the next product in production line. Rogers Chocolate has a very low turnover rate because of its historic heritage of 120 years and strong family values. Some workers were third-generation Rogers employees with strong loyalty and passion for the company.However, it created a problem for the company because employees were resistant to any change in the company. Rogers Chocolate was also involved in the local community service by employing people with disability and a group of brain-damaged individuals. The organization had a very good and friendly corporate culture where people respected each other on first-name basis. Compensation packages offered to the employees were also very competitive in order t o retain the experient employees. Rogers Chocolate has the potential of growth with its present resources.The company has a well-managed and competent workforce, which is the driving force for the complete organization. The board of directors consist of educated and experienced people who have good know-how of the industry. The production facility and other tangible and non tangible assets permit Rogers to come forward to lead the industry. It has all the right business tools that are required by an organization in order to succeed. Rogers has access to the main markets of the country that include its retail outlets, wholesale sales and online sales.All these resources and its ability in making premium chocolate with high quality and high taste make it a potential threat to its competitors. If utilized properly, these resources and capabilities can allow Rogers Chocolate to formulate a strategy to earn above average returns. Recommendations * sharpen on strengthening certain ret ail operations than wholesale. * Rogers good corporate social practices will also focus on human rights (labour laws), packaging, procurement and operational decisions. * Increase brand awareness to capture more market share. * Focus growing the retail business into new geographic markets.* Continue to grow complementary business lines (i. e. deoxyephedrine Cream) * Develop core competence in operations management to drive efficiencies and reduce inventories. * Upgrade engineering in production to increase capacity * Create new product lines and packaging to broaden the customer base. * Franchise Sams Deli. It has large amount in administration expenses. * Franchise retail chocolate stores. * Offer promotions on special events like Christmas, Fathers Day, Mothers Day, and Valentines Day etc. * grasp existing customers happy with special discounts and customer loyalty programs.