Roger's Chocolate

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Case Study
Rogers’ Chocolates

Due date: August 6, 2011
Course: ADMN 4876
Management of Small Business Enterprises
Prof: Pouya Seifzadeh
Sarmad Shahjahan

Introduction
R
gers’s Chocolates is Canada’s oldest chocolates company that was formed in 1885 in Victoria, British Columbia by Charles Rogers. The company specialized in producing different varieties of ward winning hand-wrapped, high-quality chocolate brands as well as premium novelty ice cream which it sold through its retail outlets, sales through wholesale delivery, online/phone sales, and through Sam’s Deli restaurant in British Columbia.

The goal of the organization is “to double or triple the size of the company within 10 years” (Zietsma, 2007) Rogers’ target market is both end users and consumers who buy chocolates to indulge themselves or to give as a gift. Rogers’ target buyers are new 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 have college education and are professionals, white-collar workers, managers, or owners. The majority will be frequent travelers on cruise ships and Internet users. In order to develop a successful growth plan for the Rogers’ Chocolates, it is very important to get an integrated understanding of the external and internal environment effecting the chocolate industry in whole and Rogers’ Chocolate in particular. An organization’s external environment represents the opportunities and threats while focusing three major areas 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 order to develop a strategic growth plan that will bring competitive advantage and above-average returns.

External Analysis
P.E.S.T Analysis:
Political/Legal:
* Legal issues regarding child labour in cocoa farms.
* African countries are more 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 still call it chocolate. Economic:
* Falling growth rate in the chocolate industry due to economical factors. * Due to seasonal vulnerability of the product, it is hard to manage inventory resulting in higher costs for wasted material. * Higher cleaning and maintenance costs for the equipment for large producers. *

Sociocultural:
* Increasing trend towards healthier diet, organic food, low-trans fat and no-sugar chocolate. * More demand for dark chocolate due to its heart-healthier anti-oxidant properties. * Consumers and employees stressing on more corporate social responsibility. * Human rights concerns on forced labour in West Africa.

* Environmental concerns influencing packaging, procurement and operational decisions. Technology:
* Less focus of private and government supported R&D 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 gradual decline in the growth of chocolate industry as a whole, there is still opportunity 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 like Hershey’s and Cadburys to shift their focus on the production of premium quality chocolates. Rogers’ Company is faced with many factors that are directly influencing the company, its competitive actions and competitive responses in the...
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