Rogers Chocolate Essay Example for Free

Rogers drinking chocolate EssayIntroduction agio Chocolates are like Imported Roses which not consider necessities for one life. raft love to have or get one of those products. However, if there isnt a special involvement or surplus cash, some people leave alone not debauch that unnecessary stuff. In Canada, pension coffee trees were stupefying at 20 percent annu eithery and the Canadian market size for Chocolates was US$ 167 jillion in 2006. An attractive growth from indemnity drinking chocolates makes the current player like Rogers Chocolates, Purdys and others are thinking new strategies to expand market. In addition, some big traditionalistic manufacturers like Hersheys and Cadbury are also very interested and keen to enter this segment (Zietsma 2007). Rogers Chocolates is a king in capital of Seychelles and well kn give in British Colombia. However, outside this area the brand awareness is tranquil woeful. The new appointed CEO is being targeted to double or t riple Sales in ten years. The key successes in premium chocolates are understand the consumers needs, brand awareness, diversified products and enhanced hawkishness.There are some challenges for Rogerss chocolates to grow in this ever-growing competition, and there are many old and new strategies that havent been proven effectively. Moreover, Rogers is small/medium Company that has modified resources to apply all those strategies. The management decision-making forget be very crucial to manage its authorisation and impuissance while at the same time they have to overcome the terror and opportunities in the industry. 1. Competitive driving forces in the premium chocolate industry Porters Five Forces Model.Porters quint forces model uses atomic number 23 competitive forces that determine a particular firms capability to compete (Thompson, Strickland, Gamble 2010). The chocolate and cocoa industry butt joint use the five forces model as an analytical tool to determine the comp etitive market. pic Figure 1 Five competitive forces by Michael Porter 1. Competitive Rivalry The frenzy of aspiration among competitors in an industry can lay down expenditure wars, advertising battles, new product lines, and higher character of client service.There are many circumstances that intensify rivalry which some of them are as follows many balanced competitors, a slow growing industry, demands falls, high fixed or store costs, little switching costs, aggressive competitors and many other circumstances (Thompson, Strickland, and Gamble 2010). Premium Chocolate competition in Canada involves strong regional brands and few world-wide players such as Godiva, Lindt, Callebaut, and Purdys. Even though The Canadian market size of chocolates industry as a whole had been falling (2 % grow projected).However, the premium chocolate market was growing at 20 percent annually (Zietsma 2007). That situation considers less intense rivalry among competitors moreover every area has their own topical anaesthetic king like Rogers in Victoria. Nevertheless, in 2008, Global economy was severely hit by the crisis that originated from the United States and quickly spread to the whole world including Canada. Premium chocolate majority consumers in Canada come from tourists in particular Americans as b dictateing neighbour. When the tourists number drops and the demand for premium chocolate also falls, the fierce rivalry will increase2. Threat of new entrants Frequently, existing industry members are often strong candidates to enter market segments or geographic areas where they currently do not have a market presence (Thompson, Strickland, Gamble 2010). Apparently, Hersheys and Cadburys have been moving into the premium chocolate market through acquisitions or up market launches since this segment still posses high percentage of growth (Zietsma 2007). The market is precisely control by few large and old players which occupy strong market shares.The chocolate ind ustry has a significant economy of scale entry barrier because large companies exist in the industry that has high drudgery output and it trim backs the threat of entrants. In addition to economy of scale, product differentiation is another entry barrier in the chocolate. There are many competitors in the industry that have remarkably identifiable brand names and customer loyalty like Rogers Chocolate itself. New go with must increase its expenditure to overcome the reputation and large customer base of the existing companies. 3. Threat of Substitutes.Rogerss chocolate is often used as gift during numerous seasons and celebrations including Christmas, Easter, Halloween, Valentines Day, anniversaries and birthdays. Other types of gifts during these seasons are viewed as substitute products. These products are flowers, jewelry and stuffed animals. All of these products can be purchased instead of Rogerss chocolate unless they just want only Chocolate as gifts. Many chocolate brand s and a wide variety of seasonal gifts make the threat of substitute products is considered low to moderate in this industry.However, if Rogers Chocolates can maintain its local anesthetic heritage especially in its traditional area like Victoria and British Colombia then the threat for Rogers can be minimized. 4. business sector office of Buyers If a buyer represents a large percentage of the suppliers sales, the buyer has more bargaining power over the supplier. 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% so, they have to take a good care of its big wholesale buyer. other condition that affects the power of buyers is product differentiation. If the product is undifferentiated, the buyer has the power to play competitors against each other and reduce the cost. 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 Today, buyers demanding chocolate more than just a taste, they becoming more health conscious therefore the demand for organic chocolate and glowering chocolate are growing.5. Power of Suppliers The bargaining power of suppliers is a competitive force that can diminish a firms profitability by raising prices or reducing the timberland of the suppliers product. The suppliers of the chocolate industry have significant bargaining power over the industry because of the limited suppliers. In addition the supplier groups bargaining power increases if there are no substitute products. Because the cocoa bean is a required ingredient in chocolate the suppliers do not have any substitute products for which they must compete.This lack of substitutes increases the bargaining power of the chocolate industry The strongest Competitive Forces From the five competitive forces, they are relatively low to moderate in affecting premium chocolate industry especially Rogers Chocolate. However, the presence of Hersheys and Cadburys in the premium chocolate market will cause the strongest threat as they have enormous resources and experiences. The weakest forces should be the supplier as they can only affect the cost thus as long as people still love chocolates then the market is still big.The potential profitability of new entrants from outside industry is low since the barrier of entry for this industry is very high. However, it will be a different story if those big guys in the chocolate industry like Hersheys are very serious entering this premium chocolate market as happening lately. 2. Drivers of Change Those competitive forces as explained above can be a driver of change either individually or collectively. Another unique driver of change is consumer behavior towards health consciousness.Toda y, the demand for organic products and glooming chocolate are growing worldwide. Rogers has responded well to this healthy lifestyle by offering non-sugar added chocolate. People also put strong cast to the caller that normal good corporate social and environment right. Therefore, the premium chocolate players that will remain in the market are only those who could ride the changes and rise above the expectation of consumers because brand and quality play a significant role in customer purchase decision. 3. Key Success Factor in the premium Chocolates Industry.3. 1 Understanding the Consumers Needs The company must understand that they must have the features required by the consumers. For premium chocolate consumers, their reasons in buy are for themselves or for gifts. The first thing in the consumer mind for the products is the taste, and then packaging, shopping experiences, and the price. Rogers Chocolates has earned a reputation as one of Canadas prime(a) chocolate maker s and many consumers stating that Rogers is one of the best chocolate they have ever tasted (Customer Review 2010).The retail stores create a unique costumer experience with the aromas and image of the store and one of the friendliest staff. Since the premium chocolates serve as a gift either individually or as corporate gifts in special occasion then their packaging need to be unique and attractive. The Rogers packaging are appealing and other competitors are trying very hard to improve theirs. Another 30 percent of Rogerss costumers are wholesale distributors and stores. The relationship that Rogers maintains with these customers has been essential to the growing success of the company.They have to strive to provide competitive price, huge customer service and inventory in a timely manner. 3. 2 bulls eye Awareness Rogers Chocolates had a brand share of approximately 6% out of $167 trillion Canadian Chocolates market in 2006. Consumer pay premium price for premium chocolates and this fact can be looked intimidating to the retail and wholesale customers who are unaware of the brand and unwilling to try it. Therefore, the chocolates companies need to have a strong brand name and brand image. Rogers Chocolates brand is iconic and local heritage in Victoria but less known in the rest of Canada.Either customers love the brand or completely unknown. 3. 3 modify Products We bought raspberry filling dark chocolate, pistachio and fruits in milk chocolate, a white chocolate bar and a lemon meringues and couple of truffle bars. Did we buy too much chocolate between the 2 of us? Nonsense, one can never have too much chocolate. The review above came from Tom, atomic number 20 who visited Rogers Shop in Vancouver on October 3, 2009 (Customer Review 2010). People love to choose their own selection and favourites.The company has to strive to provide innovative and delicious products to run the market demand. Rogers also has addressed the health conscious consumer by provide non-sugar chocolates. Rogers can offer a great breadth of products that enables the company to reach a large customer segment 3. 4 Enhanced Competitiveness Increased marketplace competition has significantly given an impact in Rogerss business and as a result, Rogers must continuously seek for areas for improvement in order to enhance competitiveness against other competitor in the market.Improving weakness could be done in terms of product innovation, operational and manufacturing, marketing, advertising and promotion, inventory and distribution, and customer relationship. The company has to observe their capabilities and make the most of them in order to stay and win in the competition. 4. SWOT analysis Strengths Opportunities .Product Market Established brand Tourist approach in cruise ship part taste Growing Markets 20% annually Award-winning Young people market Variety USA and International Market Consumer Loyalty in Victoria 2010 Olympics Human Resources Licen sing,Franchising and partnership Employee pride and loyalty Products Skilled and experienced management Ice cream Rogers own retail stores Health conscious products Sams Deli Performance Consumer Trends Strong financial position Affordable luxury products Healthy lifestyles Technology Mobile marketing Production capabilities Internet Weaknesses Threats Product/Brand Intense competition and new entrants Little awareness outside Victoria Economic Downturn/ Drop tourists Production Change consumer traffic to Vancouver Planning, Documentation and prevision Private label Chocolate .Suppliers Fluctuating demand Capacity Environmental and human concerns Equipment and processes Human Resources Resistance to change Conflict management Multiple responsibility Sales force Distribution Location Market Coverage Inventory management Financial Sales growth .The BOLD/ Italic and BIG coat fonts are the key factor for each category The company has a str ong set of strength. Rogers Chocolate is small/medium business thus its weaknesses still not very damaging and the company situated in fairly strong position. However, looking at the threats, the company needs to repair its weakness especially in Branding, Production and Inventory in order to sustain in the business. The opportunity table shows great opportunity for Rogers to grow and expand. However, Rogers needs to expand its strength beyond outside Victoria especially towards young people and definitely repair the weaknesses to cater the growing market. 5. Strategies and positioning.Rogers Chocolates positioned as High quality premium price Chocolate As stated in the company website, Rogerss philosophy is making only premium products and packaging elegantly. In the premium Chocolate market, Rogerss chocolates control only 6% and price the products in high price point but still competitive and even slightly lower then Godiva and Callebaut. High Quality Rogers Callebaut Purdys God iva Lindt Low Price Cadbury Hersheys High Price Low Quality Rogers brand is well respected among those who want high quality chocolate. Rogerss products have no additives and use high quality ingredients. The brand is very well-established in Victoria and has loyal consumers Mission StatementRogers Chocolates is committed in producing and marketing fine products which reflect and maintain our reputation of quality and excellence established for over a century. All aspects of our business will be conducted with cartwheel and integrity, upholding our proud Canadian tradition. (Rogers Chocolates 2010) GOAL To double or triple total sales within 10 years Managements Strategy excerpt Based on Rogers goal of doubling or tripling total sales within 10 years, then the main strategy will be increasing brand awareness.Rogerss products are already proven superior despite their distribution which circulates mainly in British Colombia area, thus company has to expand its market range to greate r area and to East Canada or overseas.Rogers has already won the 2010 Olympics Official Chocolates together with Purdys (Lazarus 2008) which is a tremendous opportunity to create awareness nationally and internationally. To grow a market, factors such as Licensing, franchise and partnership is being considered.One idea under consideration for developing the wholesale network was the creation of a turnkey store-within-a-store setup that would allow wholesale clients with a retail presence such as department stores to add a mini-Rogers store in their shop. Rogerss management also aim to increase the number of online shopping. Those strategies are consistent with Rogerss goal to increase the sales by double and triple in ten years.However, being a small/medium company, Rogerss management can only choose to act on several options while not putting a risk on its culture and tradition. Licensing, franchising and create store-within-a-store is a cheaper options to expand the market compar e to open its own retail stores in the new areas however does it really appropriate to Rogers excellent retail experiences? (source)s together with Purdys Conclusion In early 2009, Parkhill and Rogers management chose to focus on expanding the companys retail network. Parkhill says that Rogers will also continue to develop its wholesale channel, but will be selective in choosing partners who fit the companys brand.Our foundation is retail, he says. Its the Wow experience that customers get when they walk into our stores, are greeted and are handed a free sample of our chocolates. From this customer experience, success comes in other things that we do such as wholesale and online sales. Roger is high quality premium chocolate thus the experiences for shop and consumes Rogers chocolate has to be excellent as well. If the Brand is being franchised or create a small shop at the corner of somebody else store then the quality of service and the store ambiances can not be controlled.Peopl e not only say about how good Rogers Chocolate was but also their great experiences in Rogers Store. Therefore, the decision of developing Rogers own retail is good decision and consistent with its goal and philosophy.References? Customer Review 2010, Rogers Chocolate, Available http//www. yelp. ca/biz/rogers-chocolates-vancouver Accessed 5 June 2010 ? Lazarus 2008, Sweet deal for Purdys and Rogers Chocolates, August edn, Marketing Magazine ? Morrissete 2008, On the case How sweet is this, really? , Financial Post Magazine ? Rogers Chocolate 2010, History, Available http//www. rogerschocolates. com/history Accessed 5 June 2010 ?Thompson, Strckland, Gamble 2010, Crafting and Executing Strategy The Quest for Competitive Advantage. Concepts and Cases, 17th edn, McGraw-Hill Irwin, United States ? Zietsma 2007,Case Rogers Chocolates, Ivey Management Service.