In order to double or triple Roger’s Chocolates revenues in the next decade, the following strategic actions must be taken:
More effectively utilize the company’s Website and the vast reach of the Internet to expand customer base.
Current Internet sales represent only four percent of total sales. The Internet can create the largest increase in sales with the least amount of fixed costs all with tremendous contribution margin. The upcoming Olympic Games present an opportunity for Roger’s Chocolates (RC) to showcase itself as a uniquely Canadian treat to the people arriving from all over the world. The reach of the World Wide Web allows RC to stay accessible to the tourists even as they ...view middle of the document...
Because of this, seasonal kiosks and temporary store locations can also prove to be profitable retail store operations.
The cost of opening new stores is highly risky due to the fixed costs. This option should only be used once RC’s management feels that wholesale distribution has been effective in particular markets.
An increase in business has to be met with improved production process and better inventory management. None of the strategic options listed above can be effective if RC doesn’t improve their production capabilities.
These strategic options offer the largest opportunity for success because of an appealing Macro-Environment and a growing and profitable industry. Detailed analysis of this Macro and Industry Environment can be found in Exhibit 1.
Macro Industry Environment Analysis
Roger’s Chocolates has an opportunity to grow its market share within the premium chocolate market due to the specialty nature of their product. The main demographic of the premium chocolate consumers are “baby-boomers” and affluent families. This is a growing market that is willing to pay a premium for their chocolate. Additionally, there is room for growth because of the growing comfort level with Internet purchases. These Internet shoppers offer a much larger market than that of the traditional premium chocolate market shopper.
Overall Industry Analysis
The premium chocolate industry has been an appealing and attractive industry due to high margins, a twenty percent growth rate, and low threat of new entrants. While large manufactures like Hershey have begun entering the premium chocolate industry due to the high growth rate, they are unable to match the retail shopping experience like that of Rogers, and they will find it hard to duplicate.
However, with International and regional players entering the market, a need for innovative...