Haighs Chocolates E-Marketing Plan

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Table of Contents

Executive Summary_________________________________________________________________1
Introduction_______________________________________________________________________2
Core Competencies and Capabilities of Haigh’s Chocolates________________________________3
Tangible Capabilities and Resources___________________________________________________3
Intangible Capabilities and Resources__________________________________________________3
Summary of the Company’s Strategic Factors Analysis___________________________________4
Porter Five Forces Analysis___________________________________________________________5
Opportunities______________________________________________________________________6
SW Analysis_______________________________________________________________________7
Craftsman Style of entrepreneurship___________________________________________________8
Advantages and Disadvantages of a Family Business______________________________________9
Recommendation and Conclusion_____________________________________________________10
References________________________________________________________________________11
Appendices_______________________________________________________________________12
 1
HC E-Marketing Plan

Executive Summary
The report is based upon the current challenges faced by Haighs Chocolates regarding taking an
entry into the online market. A number of analyses have been conducted in order to evaluate the
current market condition and core competencies of the company. Despite these a detailed market
analyses and viability of the decision to take the business online is also discussed in this report.
The advantages and disadvantages of a family based business are also discussed in the report
along with appropriate suggestions to overcome the disadvantages of such business. Although,
the company is currently performing very well in terms of revenues and customer base, but
establishing an online retail store will require the company to enhance its production capabilities,
so that it can meet the demands of a wide range of customers. Therefore, a number of
recommendations have been made in this report to overcome the challenges that the company
would face in establishing an online retail store. It is also recommended that the management
should modify the company’s current business and corporate level strategies to meet the future
challenges.
Introduction
Haigh’schocolate is an Australian based family owned business, which was established by
Alfred Haigh in 1915 in Mt Gambier. The business was initially comprised upon an ice cream
parlour and a sweet shop. Alfred Haigh introduced his ice cream to the silent picture audiences
and after getting an impressive response he moved back to the Adelaide and expanded his
business there by establishing a shop on King William Street by the end of 1915. The business
experienced an impressive response from the customers and in order to meet the rapidly
increasing demand, Alfred Haigh bought a land behind his Parkside home and opened six new
shops by the end of 1933 [ CITATION Cla13 \l 1033 ]. However, giving that last expansion to
his business the chapter of his life was ended and he died as a result of a sudden heart stroke
leaving behind a successful business to his ancestors. During the World War II the overall world
economy faced a high downturn, but at that time sugar was rationed and the company continued
its survival by manufacturing toffees and boiled sugar for the armed forces. In 1946, the
company’s management was taken over by the Claude’s son, who went to observe the American
and European chocolate markets and learned a lot of productive ideas regarding the marketing
and manufacturing methodologies of these markets [ CITATION Con08 \l 1033 ]. The company
had shifted its operations to more advanced and cost efficient technologies by employing a
number of innovative and productive techniques and also expanded its operations to other cities
of the country including Melbourne and Sydney. The company got the same response in all these
cities and therefore, it had diversified its product portfolio and offered chocolates in different
designs. However, with the increasing development of technology people becomes more
technology oriented and prefer to shop online instead of going to the markets and buy products
physically. Therefore, the major challenge that the company is currently facing is related to
offering its premium products over an online forum with the same level of quality and values
offered by it through real world outlets.

Q1: What strategies can Haigh’s employ to ensure their strong commitment to high quality
and sustainable environmental entrepreneurialism are maintained in the online business?

In order to suggest an appropriate strategy to the company, so that it can maintain the high
quality of its products and sustainable entrepreneurialism in the online business, we will have to
conduct an in-depth analysis of the company’s current core competencies and capabilities and
the summary of its strategic factors.

Core Competencies and Capabilities of Haigh’s Chocolates

The company competently maintained high quality and unique taste of its products since its
inception. The major competency of the company lies in the manufacturing of ice cream and
chocolates from the locally purchased raw cocoa because the main vision and point of
differentiation of the company lies in this fact [ CITATION Cla13 \l 1033 ]. The company has
continually improved their production practices over time, while following the same
commitment, which was made by the founder of the company that they will serve their
customers with pure homemade chocolates. The company is offering almost the same product
mix in different cities of Australia except the offerings during Christmas and Easter, but the
major difference at the retail end lies in the packing, product design and shop design, which is
one of the major marketing competencies of the company.

Tangible Capabilities and Resources

Being a family owned business, the tangible resources and capabilities of the company are quite
limited because in order to expand its business or considering any other strategic move, the
company would have to rely upon its own resources for the sake of fund raising and capital
generation. On one side the local suppliers of the company can be considered as a key resource
of the company, but on the other side, it limits the company’s capabilities to go abroad because if
the company decided to expand its market, then it would become difficult for it to maintain the
same quality of its products and follow its vision [ CITATION Cla13 \l 1033 ]. However, the
company has highly sophisticated production equipments at all their manufacturing facilities,
which ensure their high level of commitment towards building a strong a competitive brand in
the market, by offering high quality products to the customers.

Intangible Capabilities and Resources

The company has established a high brand image in the market over the past few decades and
most of the people buy their products as a symbol of status. It has a team of highly competent
employees and management that helps the company in designing their strategies and building a
competitive advantage over the rest of the market. The company is highly conscious about the
increasing environmental issues and it had also taken a number of initiatives for creating
awareness among people about avoiding endangering the wildlife by producing chocolates in
Bilby shapes instead of rabbits during the peak season of Easter [ CITATION Bru09 \l 1033 ].
The company has also based most of its manufacturing units over manual production techniques,
which is not only ensuring the production of high quality products, but also show the company’s
commitment towards saving the environment from pollution. It has also established a high social
responsibility brand image in the market by using only recyclable materials in the packing and
designing phases.

Summary of the Company’s Strategic Factors Analysis

The company has recently updated its manufacturing and administrative functions by integrating
new and innovative technologies, which has helped them in the reduction of their production cost
and also improved the efficiency of its management and retail outlets. The company has
experienced a rapid increase in its revenues during the past few decades due to the stable
economic growth in Australia and the increasing confidence of the customers. The company is
also enjoying a premium position in the market due to easy availability of raw materials or
suppliers, which lowers down the suppliers bargaining power and helps the company in
negotiating over their own terms and conditions [ CITATION Bru09 \l 1033 ]. The company has
a long history in the country and therefore, it has already achieved a high brand loyalty and
customer base. One of the most important strategic factors of the company is its values and
vision of the company’s founder Alfred Haigh, which helps the managers in motivating their
employees and making certain effective and appropriate decisions during difficult times of the
market.

On the basis of the above analysis, it has been evaluated that the company currently possesses all
the capabilities and resources to go online, but in order to launch its business online it has to
make some modifications into its business level strategy and corporate strategy. It has to develop
and design its website in such a manner that customer can enjoy all the real life services and
products, while setting in the home. According to the company’s current business level strategy,
it is currently addressing a single market segment because of its existence in all high end areas.
However, after going online the company will get access to a wide audience and therefore, it has
to further diversify its products and also focus upon targeting certain new market segments, i.e.
should develop products for the middle and lower class customers as well [ CITATION Cla13 \l
1033 ]. It should also try to establish a one call and within an hour delivery system, which will
not only enhance its brand value, but also increase its profits. The company should also connect
all the outlets with the centralized database, so that different regions can be monitored and served
simultaneously. Whereas, at the corporate level strategy, the company should also make a
number of modification like it should also ensure the same type of vertical integration in the
online market that is currently employed by it in its real world operations [ CITATION Con08 \l
1033 ]. This will not only reduce the cost of the company, but also ensure a high level of services
to the employees. It should also launch its online stores internationally, which will address the
needs and demands of international customers and should also take steps for ensuring a high
quality delivery system for the international clients.

Q2: What will be the main Challenges for Haigh’s as they take their business into online
retail?

The company will definitely face a number of challenges in setting up their online existence
because of the complex nature of the online industry and a high level of competition. In order to
understand the challenges that the company could face while going online, we will have to
understand the behavior of five major market forces by conducting Porter Five Forces Analysis.

Porter Five Forces Analysis

Buyers Bargaining Power
The buyers bargaining power in the online retail industry is very high because there are a number
of online stores, which are easily accessible to the buyers and they are almost offering the same
line of products therefore buyers can easily switch from one company to another [ CITATION
Mag12 \l 1033 ].

Suppliers Bargaining Power

The suppliers bargaining power in the online industry is different for different customers. But the
overall industry bargaining power is quite low because the major raw material in the
manufacturing of chocolates and other confectionery are cocoa, milk and sugar, which can be
easily available with different type of suppliers.
Threats of new entrants
Threat of new entrants is low due to the requirements of high capital cost for the establishment of
a premium quality chocolate company and then developing its online existence.

Threats of Substitutes
Threats of substitute are very high because a large number of other chocolate manufacturing
companies are also operating online and customers can easily go for the substitute products.

Industry Rivalry
Industry rivalry is also high because there are a number of other premium class chocolate brands
operating online. The company will face a tough competition in the online market from different
local and international brands [ CITATION Mag12 \l 1033 ].

The above analysis evaluates that the company will face a number of challenges while going
online because there is a tough competition in the online industry and customers can switch to
other companies very easily[ CITATION Ans79 \l 1033 ] . Although, the company is currently
enjoying a high customer base, but going online means that the company would be operating in
the international market and there it has to build a new customer base right from the start. The
company can face resistance from different foreign countries in the form of strict cyber rules and
regulations. It has to invest a high amount of capital for the development of a competent online
platform, which should be secured by a competent cyber security services company, so that the
confidential information of the customers could not be hacked [ CITATION Dea00 \l 1033 ]. The
company will also face tough competition from different local and international online retail
stores and it will be required to either further differentiate its products or lower down its prices.

Q3: What do you see as the main opportunities and how should they be maximized?

Opportunities
The company can offer its products to the large portion of the rural population as well, which is
currently unserved by any premium brand of the country. It can expand its business to the remote
areas of the country by getting entry into the online market. It can increase its customer base by
expanding its business to other countries of the world and especially to the Asian countries
where the demand for premium quality chocolate is very high. It can raise funds and generate
huge capital by going public [ CITATION Alb87 \l 1033 ]. The company can also use a
franchising based model and enter into the international markets without spending a single
penny. It can also increase its sales by expanding its current offerings, i.e. it should also
introduce chocolate cakes and biscuits etc…. The company should link its online model with the
popular social networking sites, like twitter, Facebook, etc… by making collaboration with them
and increase their customer base through a social networking marketing campaign.

Q4: How does Haigh’smaintain their sweet spot, resonant position in the market, and what
they will need to do to maintain it when venturing online?

Haigh’s is the only oldest chocolate manufacturing company, which has been offering high
quality chocolates to the customers consistently. In order to understand that how the company
has maintained such a high brand value and resonant position over the past many decades in the
market, we would have to conduct the SW analysis of the company.

SW Analysis
Strengths
The company has a long history in the country and it has developed a strong brand image and
customer base overtime. It has established a highly competent supply chain management system
and good relations with the local suppliers for quality raw material. The company has also
employed a number of innovative and technologically advanced methodologies for increasing
the production and enhancing the quality of its products. The company’s products are considered
as a symbol of status and its existing customer base is mostly comprised upon high end
customers [ CITATION Alb87 \l 1033 ]. The company’s marketing function is also very
competent and helped the company a lot in such an aggressive expansion across the major cities
of the country. The employees of the company are highly committed to the development and
growth of the company because most of these employees have been working with Haigh’s for
more than 20 years [ CITATION Des93 \l 1033 ]. The company is offering mostly high end
products, which are comparatively expensive than the other offerings of the market, but customer
still prefer to buy the products of Haighs because of its high commitment towards building a safe
and healthy environment.
Weaknesses
One of the key weaknesses of the company is its high dependability upon the local suppliers
because it would not allow the company to move its operations into the international markets. It
is a family owned business and cannot enjoy the privileges of large sized public companies. The
company’s products are limited to some specific regions of the country only, while leaving a
wide area unserved. The absence of the company’s online existence is also negatively affecting
its growth and popularity.

On the basis of the above analysis, it is evaluated that the company has all the required strengths
that are necessary for a business to go online, but in order to gain a competitive position in the
online industry as well the company needs to further diversify its products according to the
priorities of the international customers [ CITATION Tho11 \l 1033 ]. It should focus upon the
development of such a delivery system that can ensure safe and timely delivery of the products to
the customers once they make an online order. The website of the company should be developed
in such a manner that it provides an open platform to the customers for their suggestions and
comments about a particular product. The company should also offer discounts on their products
for the initial promotion of its online entry. Due to the tough competition in the online industry
and easy access of customers to other brands, the company should provide certain innovative
stuff and services over their website, like it should create a social networking platform over the
website, where the customers can login and share their experiences with the other customers. It
should also offer certain unique services where people can order cakes or chocolates for their
loved one with their name or certain specific design on it [ CITATION Tho11 \l 1033 ]. This will
not only increase the loyalty of the existing customers, but also help the company in attracting
the customers of other online retail stores.

Q5: What style of entrepreneurship best describes AlisterHaigh and the Haigh family?

Craftsman Style of entrepreneurship

The Craftsman style of entrepreneurship best describes the character of Alister Haigh and his
family because they held almost all the activities and resources of the business within their
hands. This style of entrepreneurship is usually adopted in a family business or sole
proprietorship, where business has a single owner and he has the ultimate power of authority for
decision making because such style of entrepreneurship usually limits a business from further
expansion [ CITATION Gab00 \l 1033 ]. It is usually adopted in such type of businesses where
the major concern of the business is to enhance the quality of their products instead of the
quantity or maximization of revenues. In this style of entrepreneurship everything is done with
high level of expertise and the production cost is also minimized, but the major disadvantage of
this type of business is that it limits your exposure to a wider customers range [ CITATION
Kic10 \l 1033 ].

Q6: What are the advantages and disadvantages of the family business of decision making,
and how would you manage them and exploit them in the expansion into online retail?

Advantages and Disadvantages of a Family Business

Family business is easily manageable because of its small sized operations and high level of
understanding among all the employees as most of the employees belongs to a single family. The
decision making process in a family business is quite simple and once a decision is made, it can
be easily implemented in the organization. Family business is always less complicated an require
low resources for its establishment and operations as compared to a large sized publicly owned
business. The organizational hierarchy is almost negligible in a family business and therefore,
the decision making process is very quick and effective. However, there are a number of
disadvantages as well associated with the family business [ CITATION Dav73 \l 1033 ]. Due to
a single line of authority the managers and lower level employees get de-motivated due to the
autocratic attitude of the head of the family and business. Some time the business is managed by
a younger family member, but the elders still interfere in the business and the subordinates lack a
clear line of authority in this case. Family business limits the ability of any sort of business
because of the limited capital resources and exposure to the other markets. Most of the time
family members are not competent enough to run the business effectively and as a result get
dissolved or experience heavy losses.

In order to take the business into the online market, it is necessary for a family business to take
out all the family members from the management positions and hire a competent manager for the
organization because going online means that an organization is joining the global market. The
external manager would be vested with key authorities for effectively managing the business,
while the owners would act like the board of directors of the business with the final hearsay. The
family members should also be given a clear line of authority regarding doing the business and
the other members should stay away from the affairs of the business [ CITATION Awe06 \l 1033
]. These measures will not only avoid the risk of conflict among the employees and the family
members, but also improve the productivity of the business.

Recommendation and Conclusion

On the basis of the critical and in-depth analysis of different areas of Haigh’s chocolates, it has
been recommended that the company should step-in to the online market after incorporating a
number of changes into the business level strategy and corporate level strategy. It should also
eliminate the control of Haigh family from the business or let the business to go public because
after establishing an online retail store the company’s operations would automatically be
expanded and it would not be effectively managed by the family members alone. It is also
recommended that the company should also increase its product portfolio before entering into the
online market [ CITATION Spe15 \l 1033 ]. It should develop a highly sophisticated delivery
system for the timely delivery of customer’s orders.

On the basis of the in-depth analysis and detailed discussion regarding the challenges faced by
the Haigh’s chocolates, it has been concluded that the company can only respond all these
challenges, if it follow the recommendation made in this paper. Although, the company is
currently performing very well with the current organizational setup, but after going online the
demands for its products will automatically increase and it would become impossible for the
current management of the company to meet such a high level of demand [ CITATION Sad03 \l
1033 ]. Therefore, the Haigh family is required to take certain bold steps regarding their business
because it is the right time to take the business public otherwise the online venture is not going to
be succeeded.
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Appendices
SW Analysis
Porter Five Forces Analysis
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