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Ent101 roger's chocolates final pres
1. Roger’s Chocolates Case
Analysis
By: AJ (Hejian) Liu, Nick Rosati, Rooby Fortulien, Tim Sprague,
Alonso Vela, Jaime Simon
Suffolk University
Entrepreneurship
101
2. Agenda
• Introduction
• Current Operations
• Roger’s Product Profile
• External Analysis
• State of Chocolate Market
• Key Competitors
• 5 forces: Threat Analysis, Bargaining power
• Product Life-Cycle
• SWOT Analysis
• Ratio Analysis
• Recommendations
• Conclusion
3. Current Operations
• Head Office and Flagship store in Victoria, BC
• 24,000 ft2 manufacturing facility in Victoria located 8km from
Head Office
• 11 retail outlets owned and operated by Rogers’ Chocolates
• Privately owned company with 5 board members
• Awards:
• (2006) Winner of Superior Taste Award
• (2000) Winner of Canada’s Innovative Retailer of the Year
4. Current Operations
• Employee Base:
• Steve Parkhill is current president (2007)
• 110 non-unionized retail and production employees
• 20 employees in management, administration, and sales
• GOAL: To double or triple size of the company in 10 years
5. Roger’s Product Profile
• Premium Hand-Wrapped Chocolates
• Victoria creams, truffles, nuts and
chews, almond bark, nutcorn
• Pure milk chocolate, dark chocolate,
white chocolate
• Specialty items- chocolate covered
ginger, caramels, brittles, orange peel
• Premium Ice Cream
• Baking and fondue chocolates
6. State of the Market
• Canadian Chocolate Market
• Market size: $167 million in 2006
• Annual growth rate of 2%
• Low Margins
• Premium Chocolate Market
• 20% growth per year
• High Margins
•Consumer Base:
•Customers who looking for luxury and superior taste
7. Key Competitors
• Godiva, Bernard
Callebaut, Lindt,
Purdy’s
• All companies have
excellent, modern
packaging, but differ
in price and quality
8. Threat Analysis
• Threat of New Entrants
• Low threat level
• Premium Chocolate Market is difficult for new companies to
enter
• Require high level of capital assets, manufacturing know-how
• Decline in traditional chocolate market, growth in premium
chocolate market
• Well-established companies of traditional chocolate (Nestlé's,
Hershey's, Cadburys) move into premium market
9. Threat Analysis
•Threat of Substitution
•High Level of Threat
•Consumers can buy other types of candies and sweets
•Numerous other brands of many different types of chocolates
• High-quality, low-quality, organic
10. Bargaining Power
• Bargaining Power of Suppliers=low
• Many different suppliers
• Ingredients for chocolate fairly common
• Bargaining Power of Buyers=low
• Roger’s Chocolates has unique selling points and
unique products
• Distinctive taste promote customer loyalty
11. Industry Rivalry
•Industry Rivalry is mixed
•20% growth in premium chocolate market decrease rivalry
•High level of product differentiation decrease rivalry
•As more traditional chocolate companies move into
premium market increase rivalry
12. Product Life Cycle
• Currently, Premium
Chocolate Market
nearing Maturity
Stage of product
lifecycle
• Still experiencing
growth, but now
abundance of
competitors
13. Strengths
• Competitive Weapon: High Quality Products
• Long business history with experienced
management team
• Knowledge of products, and manufacturing
• Good advertising and brand reputation in
Victoria
• Devoted and passionate employees
• Excellent Retail Experience leads to repeat sales
• Customer loyalty and well-established brand
14. Weaknesses
• Weak brand awareness outside of Victoria
• Old and Inefficient production process- no means of
measuring productivity
• Demand forecasting- difficult due to seasonality of sales
• Management and employees resistant to change
• Inventory management and planning- products going out-
of-stock
• Negative brand image from using forced/child labor made
materials from West Africa
15. Opportunities
• Increase in e-commerce
• 2010 Olympics in Vancouver
• Increase production capacity
• Second Shift Possibilities
• Joint Partnerships
• Branch out to European and Asian markets
16. Threats
• Economy and Demand fluctuations
• Increase in competition
• Consumer traffic- decrease in tourism traffic in
Victoria
• Environmental and Human rights concerns
• Aging consumer base- loss of loyal customers
19. Recommendations: 5 Point
Plan
1. Improve internal production processes and update
inventory and forecasting technology
2. Engage in aggressive marketing and advertising campaign
3. Rebrand traditional image to reach out new client base
without compromising quality
4. Maintain Customer Base with generous Rewards and
Loyalty Program
5. Expand globally through partnership and joint business
ventures
20. 1.Update Technology
• Must update decades-old manufacturing equipment to reduce
cost of production and increase efficiency
• Develop means of measuring manufacturing productivity for
future reference
•Such data is essential to have for future growth
• Develop effective tools to forecast customer demand to avoid
item shortages and extra production
• Current Net Book Value of Machinery: $317,544
21. 2.Marketing Campaign
• Increase brand awareness and recognition by increased online
advertising to higher income, quality conscious consumers
• Adapt to changes in technology
•Develop an app- costs around $35,500
•Effective advertising on social media less costly than
traditional advertising
• Advertising Costs in 2006: $489,345 must increase
22. 3. Rebranding Image
• Advice from expert brand-image consultant:
• Dangerous to play it too safe, customers love edgy brands
• Rogers’ quality already in high standing, make it appealing to a
wider range of people
• Develop younger, sexier image while maintaining core design
elements and brand integrity (i.e. BMW, Cadillac)
•Luxury products for young professionals, high-middle class
• Develop new packaging art: 4-5 new designs
• Dominate Premium Chocolate Market
23. 4. Loyalty Program
• Leverage Rogers’ high quality, excellent customer service to
satisfy and maintain already loyal customers
• Offer special promotions, discounts, coupons to attract repeat
buyers
•Chocolate of the month, personalized chocolate orders,
corporate discounts
24. 5. Expand Globally
• Seek partnerships or joint ventures to expand company on global
level
• Target the affluent all around the world: Europe, Middle-East, Asia
•China has 2,378,000 millionaires in 2013
• Establish at least 10 retailers and production facilities all over the
world
• Typical Retail Store (Sidney) costs $102,413 annually
•Once Rogers’ Chocolates globally renown, phone and online order
will increase
25. Conclusion
• Weaknesses old technology, poor inventory
management
• Advantages high quality premium chocolate,
reputability, and customers’ loyalty
• Recommendations promote brand awareness,
improvement of inventory management and expand