Rogers Chocolate Case Martin Siegert Catalina Tapia

1) What is competition like in the premium chocolate industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? In the industry there is great pressure on the overall performance because there is increasing competition from rivals and threats of new competitors, we can say that the premium chocolate industry is having an intense competition with strong growth potential. Roger Chocolates has been known to have high brand recognition and quality in their products, thereby gaining customer loyalty and sales success. The rivalry between competitors and the threat of new entrants consider stronger force, since the chocolate market is growing annually. The intensity of rivalry among competitors in an industry can create price wars, advertising battles, new product lines, and higher quality of customer service Premium Chocolate competition in Canada involves strong regional brands and few global players such as Godiva, Lindt, Callebaut, and Purdys. The force weaker than Rogers has the bargaining power of buyers and suppliers, but also think that the threat of substitute products given a weak point. The first as customers who prefer this brand of chocolates, they differ by a time luxury look and unique experience, Rogers still has managed to bring out the distinction in the niche market with a good strategy and good differentiation. Rogerss chocolate 50% of sales is contributed from its 11 retail stores which is a strong one. However, since the previous president Mr. Jim Ralph had grown its wholesale market up to 30% thus, they have to take a good care of its big wholesale buyer. The premium chocolate has a differentiated product, which reduces the power of buyers. Rogers have brand identification and customer loyalty, which makes it hard for buyers especially the loyal ones not to consume Rogers for their premium chocolate consumption. And the second weakest force, and that should be a very expensive type of chocolate and unique, is exposed to cheaper substitutes exist, where they can try to mimic this type of chocolates. The suppliers of the chocolate industry have significant bargaining power over the industry because of the limited suppliers. Roger must work with supplier to improve supply chain. The premium chocolate market has strong growth potential, but also has increasing competition from rivals and threats of new entrance which may put pressure on profitability. Suppliers are exerting strong competitive forces on smaller manufacturers, and buyers are exerting moderate pressure as they change their preferences and insist that manufacturers use fair trade and organic chocolates.

2) How is the premium chocolate industry changing? What are the underlying drivers of change and how might those driving forces individually or collectively change competition in the industry? The industry is clearly changing , people are preferring a standard of living healthier , are more conscious about their health and how it is affecting people in general lead a healthier life. Thus, the demand for healthier products is growing , as well as in the chocolate industry , people are preferring formerly healthy products . This creates a large change in the chocolate industry, buyers are demanding more dark chocolate flavor. Also, because of this, the demand for dark chocolate is growing , due to its healthy qualities for health than traditional chocolate . With the growing trend in healthy diet preference , change the underlying factors of competition in the industry of premium chocolate in the strongest level the preferences of buyers of refined products , instead of the current . As stated in the company website, Rogerss philosophy is making only premium products and packaging elegantly, and that is related to today's concern for the environment is also on a rise, the corporate social responsibility is still a big issue. All societal concerns, attitudes and changing lifestyles are strong enough to shape competition and impose the restriction in chocolate, on the profitability of the industry and competitive survival. 3) What key factors determine success for producers of premium chocolates? The premium chocolate industry has very similar price and quality balance points among its competitors The key factors that determine the success of high-quality producers, are (in terms of product) Taste and quality (high quality ingredients), product packaging design expertise is essential in an industry in which perception of the product is equal in Importance to quality of the ingredients, distribution and advertising and price. A functional level plan: - Having a well-known and well-respected brand name. - Accurate and Timely filling of buyer orders will create superior customer perception of service value, Along with reducing high cost of labor that inefficiency results from back ordering. -Have a good distribution network -Marketing: advertising good campaign and packaging. Manufacture: quality product and inspires confidence in customers -The use of technologies to make more productive manufacturing is also important. -Having talented employees with knowledge of chocolate to continue product innovation, required production management and supply chain management skills and software for accurate decision making.

- Understand consumer needs -Possess product diversity -Human resources management 4) What does a SWOT analysis of Rogers' Chocolates reveal about the prospects for company's future success? What are its key resources strengths and competitive capabilities? its resource weaknesses and competitive liabilities? its external opportunities and threats? The SWOT analysis shows the strengths, weaknesses, opportunities and threats of the company. In this case, Roger's Chocolates has a good foundation for success in the chocolate industry due to its management team building intense, online sales, investment in technologies, among other things. Strengths: Rogers Chocolate is small / medium business Weaknesses Malthus its still not very damaging and the company situated in fairly strong position. Existence of loyal employees committed to the company , the use of natural ingredients in their products attentive to the concerns of today, great sales valued at winning different prizes small , has a large base of potential customers , is an established brand , its products have quality and taste, Rogers own retail stores Weaknesses: The production is long and expensive , the products have high prices, problems with out-of- stock which generates lost sales and more opportunities for growth, there are interruptions in the production process with special order commitments , too, there is a resistance of workers to change their strategies . Market Opportunities: As mentioned earlier, the growth in demand for organic dark chocolates , increase sales opportunities online , young people are consuming more premium chocolates , managing to grow by 20 % annually , sales pre Christmas time are growing. External Threats: Intense competition and new entrants, competitors such as Godiva , Bernard Callebaut , Lindt , also a clear threat is the increasing nutritional and environmental concerns of the people , rights concerns on child labor in West Africa, constant threat of some competitors Cadbury and Hersheys , and is increasing its presence in the premium chocolate market .

5) How would you describe Rogers' Chocolates' competitive strategy? How is it positioned in the industry? What specific steps has management taken to implement this strategy? Do the company's functional strategies and tactics appear to be consistent with its competitive strategy? Rogers Chocolates positioned as High quality and premium price Chocolate Rogers is attempting to occupy a differentiation position from the rest of the premium chocolate market. Rogers strategy is defined by its specialized product attributes that appeal only to its premium niche members. They have an extremely well-known brand name in Canada, and have the reputation of great customer service and high quality chocolates. The current strategic position for Rogers can be identified as focused differentiation. It is serving the niche market of wealthy consumers, people who are willing to spend extra amount for the chocolate of their choice. The corporate segment of the population is also the one which has no issue with spending. In addition to this, tourists are also a part of the niche market being served by Rogers chocolates. Therefore it can be concluded that within the local and international context, Rogers is using the strategic position of focused differentiation. The main competitive advantage is that it is able to serve the niche market with high quality chocolates which are highly valued by its consumers. The overall thrust of Rogers strategy is to provide premium chocolates and excellent service to affluent customers and travelers looking for an elegant, prestigious, and uncommon gift item from traditional chocolate producers offerings. We can say that Rogers strategy is focused on differentiation. 6) How well is Rogers' Chocolates' strategy working in terms of the financial performance it is delivering? What is your assessment of its level of profitability, its degree of liquidity, and the extent of its leverage? Although Rogers is profitable in 2006, their sales and profit are down slightly from 2005. Gross margin is consistent but all other profitability measures are down. ROE is reduced 6% from 2005.The companys operating margin is reduced 3%, reducing profitability from operations. This is a sign that their selling and administrative expenses are high. The net profit margin has dropped from 8.9% to 7.5%, which is also a bad sign. This has dropped from their higher expenses. The return on total assets has also dropped by nearly 2%; this indicates the profit per sales dollar, so the downward trend is not a positive sign. Return on stockholders equity has dropped by nearly 7%, which technically it still falls into the average range however it was in a much higher range before which is cause for concern. Overall all the profitability ratios seem to be on a declining trend.

7) Which of the strategic options available to Rogers Chocolates should be given the highest priority? Which of the growth options is the most attractive? Why? Rogers should focus on a workable option, long term to serve and you should give a high priority. The theme of growing in BC, in terms of presence of retail and beyond. The issue of being able to control your sales and the quality of its products and sales experience is created and where it is going. The idea is to develop stores that challenge, but always exploring feasible locations, meeting heritage building to store identity, and hiring and manage retail employees Expand one store at a time, focus energy into ensuring that store is successful. With one store, Rogers do not need to finance a lot of debt to expand, and can still develop a brand presence in that market before moving on. This option clearly will make Roger's grow, always careful not to disparage the brand and care, since they could grow well if they expand, reaching many more people than as currently reach. 8) What specific actions should Steve Parkhill undertake to improve Rogers' competitiveness in the Canadian Premium Chocolate Industry? How will the culture of the organization impact Parkhill's decision? As a relatively new CEO, how would you suggest that Parkhill reconcile the competing growth suggestions championed by various members of the Board of Directors? Place Expand distribution outside of British Columbia , in how products wholesale. Also, opening franchises outside of Vancouver , without changing the image that the company currently . In online sales how to create a competitive advantage that differentiates and gain ground in this area . Promotion Increase the budget for the development of advertising outside the province, and thus a more mass marketing together . Promote with discounts, coupons, among other things to have a better promotion, both retail and wholesale . Product Focus on keeping the brand identity, but update the package in a more modern and consistent. Operations Improved production processes, focusing on greater efficiency and lower labor costs. Improving communication equipment company management . Rogers Chocolates has a strong fit within the industry for many different reasons. They are a motivated company when it comes to their product, locations, and highly trained employees.