Management 313 Operations Strategy Case Study
Capacity and Process Technology Strategy Advice for Bonkers Chocolate Factory:
A central aspect of the dynamic problem facing a business in an evolving and competitive industry is the decision about additions to productive capacity. The purpose of this report is to provide strategic advice for the CEO of Bonkers Chocolate Factory (BCF), the U.S division of a multi-national candy company operating in the highly competitive chocolate products market. In late 2001, the main issue facing BCF management involves determining and agreeing on an appropriate strategy for the purchase of extra conching capacity, through the implementation of either new in-house developed conching technology or existing conventional conching technology. Other issues that need to be addressed by BCF management include decisions about the timing of capacity change, the scale of capacity increase, and evaluating the feasibility, acceptability and vulnerability factors associated with the proposed process technology options. In addition, another issue requiring BCF consideration includes the effects of competitor behaviour. It is understood Nestle and Mars are investing heavily in new technology in order to further develop and increase their resource capabilities with new product development and operations efficiency competitiveness.
In order to assist BCF management in determining the most appropriate strategy for their operations, an analysis of the relevant factors that influence and affect the capacity and process technology decision areas will be applied; to provide BCF management a greater understanding of the various risks and opportunities facing the company in their choice of capacity and process technology decisions. For BCF, conching technology is a critical element in their primary production process, transforming fatty cocoa powders (input) into liquid chocolate with increasingly controllable physical properties that are used in secondary processes for the production of a variety
A central aspect of the dynamic problem facing a business in an evolving and competitive industry is the decision about additions to productive capacity. The purpose of this report is to provide strategic advice for the CEO of Bonkers Chocolate Factory (BCF), the U.S division of a multi-national candy company operating in the highly competitive chocolate products market. In late 2001, the main issue facing BCF management involves determining and agreeing on an appropriate strategy for the purchase of extra conching capacity, through the implementation of either new in-house developed conching technology or existing conventional conching technology. Other issues that need to be addressed by BCF management include decisions about the timing of capacity change, the scale of capacity increase, and evaluating the feasibility, acceptability and vulnerability factors associated with the proposed process technology options. In addition, another issue requiring BCF consideration includes the effects of competitor behaviour. It is understood Nestle and Mars are investing heavily in new technology in order to further develop and increase their resource capabilities with new product development and operations efficiency competitiveness.
In order to assist BCF management in determining the most appropriate strategy for their operations, an analysis of the relevant factors that influence and affect the capacity and process technology decision areas will be applied; to provide BCF management a greater understanding of the various risks and opportunities facing the company in their choice of capacity and process technology decisions. For BCF, conching technology is a critical element in their primary production process, transforming fatty cocoa powders (input) into liquid chocolate with increasingly controllable physical properties that are used in secondary processes for the production of a variety