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Rogers Chocolates
Time Context
Viewpoint
Objectives
Global expansion (to increase brand awareness and increase market shares)
Join the trend of advance technology (acquire new machines and equipment)
Focus on controlling the inventory management of the product (out of stock problem).
Areas of Consideration/Analysis
Porters 5 Forces
Entry into premium chocolate market requires large capital investment for branding and
production facilities.
There are already both major international players and regional, high quality brands with loyal
followers.
The main ingredients of cocoa beans, sugar, and milk are so common that they can cheaply
acquire.
There are limited of supplier of chocolate in the premium market which makes the suppliers of
chocolate very important to the industry.
The buyers of chocolates in the market today are becoming more health conscious.
Rogers has unique price points and quality that are not easily obtainable by customers.
Distinctive and exclusive taste.
Numerous brands of higher and lower quality/ price points, even similar premium regional
products.
There are many substitutes and a wide variety of choices available for the customers to
choose.
The premium chocolates are the ordinary chocolates that you can find in groceries, desserts,
and other sweets that satisfies customers cravings.
SWOT Analysis
The SWOT analysis of Rogers Chocolates reveals important strengths, some weaknesses and
threats, and many opportunities for growing. This analysis shows that the company has a tremendous
opportunity to improve and expand its business.
Strengths:
Customers at Rogers Chocolates have a high index of loyalty and repeat purchase. People
who has taste the quality of the product have experimented the chocolate experience that
Rogers offers
The premium chocolate segment is experiencing a 20% annual growth rate. This segment is
where Rogers is targeting its product
Rogers has a strict control of the quality of the raw materials; in addition, most chocolates are
handmade, then hand-packed and assorted in fine art tins.
Award winning recognition
Devoted & passionate employees
Weaknesses:
Opportunities:
The targeted segments have a huge rate of internet use and on-line purchases. Rogers has
an opportunity to expand its online sales by improving and promoting its web site. This could
help Rogers to attract new and young customers.
Franchising and joint partnerships
Development of special line of chocolates
Re-engineering of processes, and the improvement of the brand image
Threats:
Competition
The business is shared with big players with different strategies. For example Godiva
(Nestle) achieves price higher than Rogers with lower quality products, Callebaut
products have a huge penetration in Western Canada as well as Cadbury and
Hershey.
Redefinition of the word Chocolate
The EU has redefined the word Chocolate allowing low quality products to receive
this denomination. The USDFA is following the same trend
Environmental concerns and human rights concern
Economy and demand fluctuations
PESTEL ANALYSIS
Demographic/Environmental
Consumers are finding new ways to go green, decrease their environmental footprint and to
have a healthier lifestyle. Thus, consumers are demanding more dark chocolates, organic
products and expect manufacturers to be as environmentally friendly as possible.
Economic
The Canadian market size for chocolates was US$167 million in 2006 and it was projected to
grow at 2% annually. The premium chocolate segment was experiencing a 20% annual growth
rate (Thompson et al., 2008). Economic growth has been declining worldwide. Nevertheless,
the premium chocolate segment has not received a huge impact of the crises and the growth
expectation is maintained at the same level.
The Great Recession also affecting Canada, consumers have less disposable income.
Political/Legal
Larger chocolate manufacturers are asking to the US Food and Drug Administration to change
the definition of the term chocolate. If this requisition is validated cheaper and lower quality
products can still be labelled as chocolate.
Varying laws outside of Canada for expanding business practice.
Social-cultural
Trend for healthier diets, organics products and with no trans fats.(Aging baby boomers desiring
higher quality)
Higher demand in dark chocolates, in part because of heart healthy and anti- oxidant traits.
Technological
May want to focus on technology that other larger competitors utilize, such as forecasting models
for sales so that they dont short out on inventory.
Increase internet shopping of younger demographic is a huge opportunity.
Functional Level
Marketing Department: must be knowledgeable in segmentation, targeting and positioning of their
products.
Human Resource Department: must have quality sets of skills with knowledge of chocolates to continue
product innovation.
Finance Department: must focus on the alignment of financial management within an organization with
its business and corporate strategies to gain strategic advantage.
VRIO Analysis
PROS
Low Cost of Sales
No intermediaries
High reorder rate
High chance of gaining loyal
customers
Easy ordering facility
CONS
Shipping fee is parallel to the amount of
chocolates bought
Sales agent are not prompt in responding
PROS
Creates another source of income
CONS
Brand image might be spoiled
No quality control
Disclose confidential information to
franchisees
PROS
There are 2 stores in Vancouver
and 1 in Whistler, all of them are
within the area of Olympics
Less cost for advertising to the
crowd/people attending the
Olympics
CONS
-
PROS
Can create economies of scale
Sale of excess production capacity
CONS
-
PROS
Helps block competitive threat
Easy stretch of geographic reach
Creates more cost effective production
CONS
-
Leadership issue
Resistance from rank and file employees
PROS
Stronger brand image
Increase stability
Help increase core competencies
Easy geographical expansion
Gain access to technology, expertise
and
capabilities
CONS
-
Sharing of information
The other firm may eat up your identity
Diverging objectives of partners
Cultural barriers
CONS
Not all customers are into the superior
type/
high-end product
8. Image Rebranding
PROS
Brings fresh look to the business
Consumers prefer edgy brands
CONS
-
PROS
Decrease out stock in retail stores
Increase capacity
CONS
-
PROS
New production area can be placed near
the biggest area that accumulates
highest
shipping quantity to reduce shipping
costs
Easier access to market
CONS
-
Cultural differences
Recommendation
Rogers specializes in a wide variety of premium chocolates that are enjoyed by all who
experience the products. Whether looking for a truffle, nut and chews or premium ice cream, consumers
can always expect high quality, handcrafted products. But the strategies they build, is not yet competitive
as compare with its competitors. This recommendation, could really help to Rogers to excel in the
industry:
Unionize their retail outlets, as well as the other stores that carry their products and provide a
written contract to them. It will be easier for Rogers to forecast if they have the power and control
on each and every product that they offer.
Rogers must allot a budget for acquiring machines for the production of their packaging and for
wrapping their chocolates as well. It may cost a lot but it is more economical in the long run. It will
prevent shortage of packaging from their Chinese supplier and lessen the production time of
hand-wrapping the chocolates which leads to out-of-stock issues.
To lessen costs of production plants and shipping, Rogers must acquire a new area for
production that have easier access and distribution since, Victoria has expensive real estates and
shipping fee. Plus, having a new location for production can give Rogers a better visibility to
possible market.
Rogers must apply the think global and act global in order to catch its target preferences, not only
in the taste of chocolates but also in the packaging and advertisement as well. Another, that think
global should apply not only in British Columbia but also outside the vicinity like for example in
some part of Canada and USA and also to increase the brand image and awareness on the
product offered, this is done through business expansion.
In order to adopt with the rising trend on healthy conscious market, Rogers must research
where they can find a supplier that offers high quality cocoa and organic cocoa. They can build a
partnership to make both their company stronger not only within the sales department but also
within the access and knowledge that can be shared by both.
Conclusions
Rogers has many options to strategize their business. My recommendations could help you
where Rogers to go through. But my conclusion is just a one part of my recommendations that could help
a lot to Rogers Chocolates to minimize the problems. For this, I would rather chose to expand its
business (Global Expansion) retail and wholesale outside British Columbia particularly USA and some
part of Canada, it could be costly, more time to invests but for sure, it could help a lot in the long run.
But before Rogers expand its business there should be an improvements to be made: brand
image renovation while still maintaining the steady balance tradition and modernization, increase internal
capacity through improving production processes and adding technology to the packaging step,
innovation and etc. Forward integration model could also be apply.
Benefits of expanding globally:
To penetrate USA and some Canadian countries, Rogers should do the following:
Build partnership with some souvenir stores, wholesale or retail outlets and high food retailer.
Build partnership on Airport Souvenir Management like for example DUTY FREE, as we all
know almost tourists people are the one who always buy homecoming gift in their love ones.
Build partnership with some supermarkets (even though some competitors would do this also)
Brand management