Roger’s Chocolates Strategic Analysis

Executive Summary

Rogers’ Chocolates specializes in a wide variety of premium chocolates that are enjoyed by all who experience the products. Whether looking for a truffle, nut and chews, or premium ice cream, consumers can always expect high quality, handcrafted products. The firm prides themselves on high quality products and unique customer experience. Throughout the dissection there were many opportunities and weaknesses to uncover.

Strong consumer loyalty is an important strength that can help increase word-of-mouth of the brand. Many people look for information for new brands online through websites, reviews, and blogs. Loyal consumers can partake in a blog discussing the greatness of Rogers’ Chocolates to help spread awareness of the brand to consumers who do not know about them. In addition, extending the in-store chocolate experience that Rogers’ provides, to the web, may draw in consumers through interactivity of their website and help build stronger relationships in the future.

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A major weakness uncovered at this time, is Rogers’ employees cautious of change as they believe it will compromise Rogers’ long-standing history and reputation. Newer technologies are available to make their jobs easier and more efficient as well as increase consumer awareness. If they gradually introduce new technologies into the company and involve employees in the transition process, the resistance to change should ease because employees will not feel as if the company is changing or sacrificing its history, but improving to create a long-lasting and profitable future.

A brief description of what will be dissected in the body of the assessment report for Rogers’ Chocolates consists of: the area of operations, external analysis, internal analysis, and the plan of action which will be developed in-depth in the body and appendices of the assessment report. This individual assignment challenged my ability to write throughout this writing intensive course.

Implementations & Execution Apple Analysis Areas of Operation

Rogers’ Chocolate has many challenges but is in a good position to grow their business. The company’s profits and revenues are continuing to increase but they are not keeping up with the competitors of the industry. To be able to expand as planned, Rogers’ is going to have to modernize and implement an integrated production planning and operational control to decrease its cost of operation. Hand processed and wrapped chocolates need to become part of the past except for possibly putting that final touch on a premium product line.

They need to streamline and automate their production in order to improve the efficiency of their plant before they expand. They will need to compete in price and have the production capability to mass produce the planned lower end chocolate product line. Additionally the company needs to look to lower cleaning costs and reduce set up times. Due to the company’s workplace culture, this will have to be implemented carefully. Rogers’ relies heavily on their British Columbia geographic segment which is where most of their retail stores are located.

In the future Rogers’ Chocolate should consider branching out and testing other geographic areas for their retail stores. The wholesale business should be expanded though a selective process to acquire additional profitable wholesalers. The wholesale operational segment is an excellent vehicle to build sales without much capital expenditure. They will steadily increase Rogers’ sales and profits. An increase in sales and strong customer brand awareness will be created by the use of a well-executed web site design. This will serve as an asset to their loyal customers and attract potential younger customers.

This firm has several critical stages on their value chain; suppliers, main factory, distribution processes, and finally service. They need to insure that they find more reliable providers of their tins and boxes so they are able to fill orders during the peak times. Rogers’ has very good control of their supply chain through company owned retail stores and wholesale distribution. See Appendix A. Present Strategic Profile Rogers’ corporate strategy is to aggressively grow their business. They want to double or triple the size of the corporation. In order to accomplish this goal they should look to their strengths in retail marketing.

This helps to maintain control of the business and exploit Rogers’ premium brand while introducing new or existing products like their line of ice cream. They should look to open stores in similar areas keeping the Rogers’ customer experience of free samples and first class treatment. If they are able to open two need stores a year would add about ten percent to Rogers’ top line. With the projected growth of fifteen percent from existing retail stores Rogers’ will have the cash flow to finance the growth in retail store and increase advertising for online business.

They should also look to grow sales and geographic presence through the wholesale business. See Appendix B. Performance Assessment For the small business that Rogers’ is, they appear to be doing quite well in their industry. Of course, not much can be determined about the overall direction the company is headed from just two years of data. However, with positive inventory turnover and a profitability ratio over 50% for both years, we can conclude that Rogers’ is holding their ground in the chocolate industry.

A few areas of concern for the firm would be the negative figures for percent change in revenue and percent change in income from the horizontal analysis. The loss in revenue was only about two percent, but the loss in income was nearly 17%, which could be a concern if it continued. Again, we have to remember there are only two years of data and 2006 could have simply been an off year for the company and they did not perform up to their standards.

Leadership and Governance

The assessments of the firm’s leadership have turned out to be very positive looking toward the future. Phoenix, Wong, and Bjornson have been working together for 15 years, and with Steve Parkhill’s insight and leadership as CEO of the company, the future is looking bright for Rogers’ chocolate. I fully believe that with Parkhill in the driver’s seat, this company is going to begin to grow exponentially as he said it would when he took over in 2007. With most of the TMT having stocks in the company, it is likely that most of them will be around for a while; and the more they work together the better off the company should be in the long run.

Essential Challenges

Rogers’ Chocolate has many challenges but is in a good position to grow their business. The company’s profits and revenues are continuing to increase but they are not keeping up with the competitors of the industry. To be able to expand as planned, Rogers’ is going to have to modernize and implement an integrated production planning and operational control to decrease its cost of operation. Hand processed and wrapped chocolates need to become part of the past except for possibly putting that final touch on a premium product line. They need to streamline and automate their production in order to improve the efficiency of their plant before they expand. They will need to compete in price and have the production capability to mass produce the planned lower end chocolate product line.

External Analysis Current Industry Framework

Rogers’ Chocolate is in a good position for the current industry framework. They are capable of taking advantage of the growth in their industry and reap the rewards and benefits of increased profit because of their vertical integration opportunity. To make sure that they are able to p provide for increased demand they will need to look into the modernization of their production process to lower costs, increase their flexibility and output without sacrificing quality. A huge threat Rogers’ faces is the lack of expansion. This is a main concern since the industry is constantly growing and expanding. Rogers’ Chocolates depends on its status of a producer of the highest quality product.

Five Forces Analysis

Roger’s is in a strong position to fulfill its major goal of growth over the following years.

Because it is a private corporation it has many avenues to attain financing. The major area where it needs to focus is to modernize its infrastructure concentrating mainly on the manufacturing process. With projected increase in its market by using its strong retail and regionals sales Roger’s will be able to maintain profits from its sales. Through the use of selective wholesale partnership’s and web Roger’s has the capability to more than reach its goals. Once the factory is modernized profit margin will increase along with the ability to produce more products quickly and at a lower cost.

Key Success Factors

Rogers’ Chocolates needs to continue to utilize the major key success factors that have made them successful and look towards newer technology to grow their business. Most important is to continue the use of high quality materials, integration with distributors, strong retail store presence, accurate order process and strong marketing of brand name. These factors have the most direct impact on our customers. Going forward to maintain success in the industry we mostly concentrate on the utilization of production assets to maintain quality, increase capabilities and realize osts savings. Rogers’ has a great product but to increase business and maintain market share we need the ability to compete with pricing at the wholesale level which will only be achieved by lowering our costs. Maintaining the brand name is also vital because it represents the company and creates customers loyalty that provides sales through delivering a high quality product. Some of the major key success factors of the premium chocolate industry I found were the use of high quality materials, integration with distributors, accurate orders and brand name.

These were the factors I found to have the most impact on firms in the industry. The use of high quality materials ensures that the final product will consist of the finest ingredients and deliver the best taste. Integration with distributors helps bring together suppliers and distributors and eliminate many simple but common problems. Accurate orders help to keep customers happy and coming back next time. Lastly, the brand name is one of the most important because it represents the company and creates customer loyalty by delivering a high quality product.

Strategic Group Map

The two characteristics I chose for the Strategic group map were price/quality and geographic coverage. I believe these two characteristics distinguish the firms in the industry well based on their price and quality of their chocolate and their geographic market segments. The strategic group map shows how firms in chocolate industry price their products as well as how spread out the firm is corresponding to their geographic coverage. According to the strategic group map, the two closest competitors to Rogers’ chocolate firm are Bernard Callebaut and Godiva.

This is because both Callebaut and Godiva are premium chocolate producers with similarities to Rogers’ in price and quality. However, Callebaut and Godiva are more global companies than Rogers’, because all of Rogers’ international sales are online. The map suggests that the Canadian chocolate industry is broken down into two segments, local lower cost firms and premium price global firms. Between the two segments, these firms dominate the industry and meet customers’ specific quality or price needs. The group map suggests that there may be slight overcrowding at the premium chocolate level.

The lack of expansion is an important threat to consider when considering the congestion in market. There are three firms competing in the same market and trying to expand to a global presence. Also the group map shows there is a wide open space for a firm looking to produce a low-cost product at the multinational and global levels. This is a major opportunity for Rogers’ to expand into the new growing markets.

Closest Competitors

Rogers’ Chocolates closest competitors are Godiva, Hershey’s, Bernard Callebaut, Lindt, and Purdy’s just to name a few. The analysis was done on Godiva because the company is backed by Nestle and is a current competitor with Rogers’ Chocolate because of its strength in packaging, advertising and distribution. Godiva commands a high-price point because customers think of the brand as sleek, modern, glitzy and high quality. Godiva’s positioning is the most similar to the image Rogers’ aims to attain and likely appeals to similar target consumers. Unfortunately, in the Rogers’ Chocolates case that was provided in the e-book there is no sufficient evidence to complete the closest competitors’ analysis. Therefore I cannot fully complete this worksheet.

PESTLE Analysis

Rogers’ Chocolate has many challenges but is in a good position to grow their business. Rogers’ Chocolates investors want sales to double or possibly triple within the next 10 years. The key marketing opportunity is to raise company brand awareness. They strived to become a leader in the premium chocolate market category. The company also hopes to increase manufacturer capability and brand recognition of their product lines. Focus on the health conscious organic and sugar free products to attract a growing population of conscientious consumers.

Critical Change

Summary with Opportunities and Threats Rogers’ going forward needs to build on their strong brand and further grow recognition of their premium brands. They must address their critical issues in their labor intensive outdated production process. A strategic plan has it be developed and implemented to utilize technology to replace old equipment to reduce the amount of time spent on set up and cleaning of the machinery. They mostly need to take advantage of newer technology to reduce costs and provide better utilization of production assets to be competitive in the industry.

Through their existing retail business they need to closely watch how the retail store sales are affected by tourism and make steps to insure that they keep traffic up in the storefronts because of the high sales and profit margins. Expand the wholesale channel through strategic partnerships and aggressively utilize the internet to reach more customers. Rogers’ premium quality products will capture market share but the cost of production and material supply chain needs to be improved so the company will be able to grow and be competitive.

Internal Analysis Strategy Diamond

Rogers’ based on its arena is very similar to it other regional competitors. Its strength is its superior quality that sets it apart. They are taking advantage of technology to increase sales outside their geographic area through the internet with online sales. Modernization of its production infrastructure has not been done so they will have higher costs then some of their bigger competitors. Improvement utilizing newer technology will help their bottom line and enable them to change many aspects of the company. They need the capability of changing their production line more quickly and streamlining this process to become more economical. If they are able to utilize new technology they would be in a better position to be more aggressive toward strategic moves and help differentiate them from their competitors. They do have a very good distribution system that uses vertical integration and is sound economically and will provide them with the ability to grow sales.

Internal Analysis

Alignment When the firm was started in the late 1800’s, Charles Rogers instilled a set of values in the company that are still practiced by employees at the firm today. The strategy of the company is focused on meeting customer’s expectations and continuing to produce the high quality chocolate products customers have come to love. The organizational structure of the firm facilitates communication between departments within the firm as well as assisting with the execution of the strategy. Rogers’ has applied multiple systems to assist with operations, with demand forecasting the most important of these. The culture at Rogers’ has been the same for many decades now, with employees displaying a high level of commitment and passion toward the company. Lastly, the skills required for Rogers’ to succeed are minimal, but could be greatly improved and shortened time-wise by improving the technology used in production.

Balanced Scoreboard

Rogers’ has failed to meet either of the goals for stockholders, though the growth goal is a work in progress. Under internal stakeholders, the firm successfully excels in manufacturing and acquiring low-cost materials, but has failed to increase production. To please customers, Rogers’ is sure to concentrate on making only high-quality chocolate and getting orders accurate and delivered on time. The firm does an excellent job of focusing on their main product, chocolate, while it continues to plan a new manufacturing facility.

Resources and Capabilities

For Rogers’ to be able to expand as planned by the new owners they will have to remain and concentrate on the high end chocolate industry counting on their strong vertical integration. They need to address the outdated manufacturing problem because of high costs associated with older equipment. Rogers’ will need to be able to expand in the future through the use of technology to automate production to reduce costs and increase capabilities. This will enable them to remain competitive and continue to have a high profit margin.

Creating Value

The firm’s value chain activities include location, operations, finance, distribution, product development, sales & marketing, and service. Combining Rogers’ Chocolates resources with their capabilities creates the specific activity that achieves each value. In turn, each value chain activity adds value to the customer’s overall experience. The operations portion can add value to the technology part of the PESTLE analysis. The distribution value chain activity will add value to the sociocultural/demographic and the economic part of the PESTLE analysis.

Competitive Strength Assessment

The premium chocolate industry is characterized by a high level of consolidation and fierce competition amongst the companies on all levels of the value chain. This competition has resulted in erosion of prices and margins for all concerned. Rogers’ Chocolates has a slight net competitive advantage based on quality against its closest rival, Bernard Callebaut. The scores suggest that the firms are very similar and share the same strengths or weaknesses.

Summarizing Internal Analysis

Rogers’ Chocolates has many strengths and weaknesses that the firm is confronted with that are directly related to their critical issues. The most important strength that correlates to the critical issue of the firm is the production of high quality chocolate products. Customers are familiar with and love the delicious unique chocolate products Rogers’ offers. Without their high end chocolates Rogers’ would not be unique and would not be able to hold onto their customer loyalty.

Ensuring that the consumers receive accurate orders maintains and increases customer satisfaction. The use of vertical integration has helped the company to prosper because they are able to sell their own products in store they own which creates much larger profit margins. The most influential weakness the firm suffers is a time consuming and labor-intensive production process. They need to take advantage of newer technologies in order to maintain a competitive advantage and increase efficiency. Another area of concern is the decreasing profitability ratio if the company fails to expand and thus considered an important weakness. Rogers’ has little to no control over the demand for chocolate and must really on popular advertisement and clever marketing during the changing seasons throughout the years.

Plan of Action SWOT/TOWS Analysis

The top three critical issues for Rogers’ Chocolates are a health conscious market, lack of expansion, and long and costly research and development. The recommended strategy for a health conscious market is the power play strategy which will allow the company to use their strong brand image and loyal customer base to reach out to the new and growing market.

The strategy recommended for lack of expansion is also the power play strategy. The firm must use their strong brand image and loyal customer base to expand into new markets and demographics. To address the critical issue of a long and costly R&D the firm must use a maximum exposure strategy consisting of developing new technologies and manufacturing processes to develop a new product line geared toward the shifting social trends of the new and younger demographics.

Recommendations

This was based on what we are able to control. The primary focus of the firm should be expanding into new markets especially into the organic and health conscious market. This will allow the firm to penetrate a new customer demographic while also working on their need for expansion. Expanding to new regions something that we are capable to address and will benefit the company the most by increasing customer satisfaction and sales immediately. This is critical for our company to succeed and will help with several of the other areas.

In order to effectively expand into these new areas, the company will need to restructure their resources and operations to be more efficient while maintaining their levels of quality. The order of implementing the recommendations would be:

• Lack of Expansion
• Time and Money R&D
• Organic & health conscious

Implementations and Execution

In this appendix is Rogers’ Chocolates top three critical issues restated in-depth along with each recommendation. Each recommendation has an implementation and execution plan that consists of a time frame for when certain tasks need to be carried out. Followed by, a pro-forma balanced scorecard for each critical issue and the corresponding recommendation. The balanced scorecard displays the stakeholders (stockholders, employees, customers, learning and growth) goals and expected outcomes they will see from each recommendation. Finally, the stakeholders’ impact summary for each recommendation concludes this appendix.

Works Cited

1. Parker, P. (n. d. ). INSTEAD. Retrieved 2012, from The World Outlook for Chocolate and Chocolate Type Confectionery: http://www. market-research. com/,February 20,2007
2. Servis, D. 2012, October). Common Knowledge. (D. Servis, Interviewer)

Appendix A:

Rogers’ major products include high-quality chocolate, hand- wrapped chocolates that includes the premiere line, pure milk chocolate, dark chocolate and white chocolate bars. Other important products are Victoria Creams, nuts and chews, almond bark, nutcorn and various assortment specialties. The company differentiates their major chocolate lines by breaking their products into Chocolate Collections, Gift Collections, Business Gifts, Occasions and Tasting Club.

Within these chocolate lines, products are organized by gourmet, organic and no sugar added to determine quality and ingredients. The company also offers the following specialty items truffles, chocolate dipped ice cream bars and ice cream, nuts, caramels, brittles, orange peel and baking and dessert sauces. b. The company purchased Sam’s Deli, a restaurant, in 2004 which is the only business venture outside their core business. Sam’s Deli also sells Rogers’ chocolate products. c. Rogers’ main office is located above its lead retail store in the Inner Harbor area of Victoria, British Columbia.

They have one production plant located near Victoria, British Columbia. Planning , research and development are performed in the above two sites. The company distributes their products through a network of company owned stores, wholesale accounts and online and mail orders processed in main office. They own 9 retail stores located in western Canada. Rogers’ has 600 wholesale accounts that are broken into five categories mostly located in Canada with a handful of accounts in the United States:

• independent gift/souvenir shops
• large retail chains
• tourist retailers, such as duty-free stores, airports or train station stores and hotel gift shops
• corporate accounts that purchased Rogers’ products for gifts for customers or employees
• specialty high-end food retailers
• Thrifty Foods on Vancouver Island
• Sobeys in Western Canada
• Sunterra in Alberta
• Whole Foods in Toronto, Oakville and Vancouver.

The below Pie Chart shows Rogers’ Chocolates percentage of Sales Revenue for 2007 operating segments:

• A seasonal industry pattern is what Rogers’ Chocolates can best rely on. They are aware that their customers buy certain products during different seasons. For instance, there was a greater demand for ice cream and souvenir items in the spring and summer. While the significant amount of the company’s core products were sold during the fall and Christmas season. I predict online sales to increase significantly in the future targeting new and younger customers. Additionally, sales will steadily climb through the accumulation of additional wholesale accounts.
• Rogers’ Chocolate is geographically segmented mainly in Canada and with a small presence in the United States. The majority of sales for Rogers’ Chocolate are from the retail stores located in tourist areas such as Victoria and other locations in Western Canada because of its strong regional base. By slowly introducing and marketing their brand as a premium chocolate they should be looking to increase their presence in niche areas in the United States. I would look to introduce retail stores in locations that resemble their Canadian stores and incorporate additional wholesalers in demographic areas of high income earners.
• One of the challenges Rogers’ faces is to expand their brand to other parts of Canada and into the United states. They have been successful around the Victoria area for over 125 years which in turn provides them with loyal customers that understand the brand and have grown up buying and eating Rogers’ chocolates. They will have to find an efficient way to market their brand to get new areas interested in Rogers’ verses the more widely known brands such as Purdy’s, Lindt and Godiva. Through careful expansion in the retail stores and the use of more wholesale accounts sales should slowly increase. Increase marketing strategies in order to gain market share in their Ice Cream products. Expand and modernize manufacturing in order to maximize production and distribution.
• Rogers’ is not a very complex firm in the sense that they have a limited product line and a simple value chain of activities. Based on that 50% of their sales are produced through their company owned stores and they only have one manufacturing plant.
• The limited amount of activities is appropriate for Roger’s based on the company’s size, sales figures and profit margins. With the use of these activities in place they will be able to expand a controlled rate into new geographic markets. It is a simple model that works and they are very familiar with. Online sales should steadily grow and benefit with any expansion in the other operating segment. Rogers’ will be able to reach sales projections and further familiarize their brand by using the internet as a vehicle to bring sales from customers worldwide. In this way, the customer base does not have to depend on a storefront for purchases.
• Rogers’ Chocolates will continue to expand targeting new geographic markets and increase consumer awareness of their products.

Rogers’ uses vertical integration by producing and selling their products through company owned stores. Rogers’ uses its main factory to produce their products and then sells wholesale to stores that carry their brand.

• Rogers’ benefits from vertical integration because it attains 50% of its sales from their company owned retail stores. The retail stores are more profitable than the wholesale accounts because they make the entire profit from the sale.
• The fact that the majority of their stores are located in one geographic area is a challenge that Rogers’ has to overcome in order to expand their business profitability.

They demonstrate excellent regional branding and loyalty. Now they need to pursue new locations and advance their reputation to other geographic areas in order to successfully branch out to open new stores in other geographic markets. Rogers’ can take advantage of the chain wholesalers they have such as Whole Foods and Crab Tree and Evelyn, to implement their products in the United States. They can test new market areas through their numerous wholesale accounts to see if it would be profitable to open additional retail stores in targeted areas.

They can also use kiosk sales in various malls during the holidays to determine profitability of geographic area. ii. Evolutionary Learning/Adjustments and Vehicles Used Table above shows a brief overview of the company’s development over time.

Major milestones:

Major Milestones for Rogers’ Chocolates includes Charles Rogers invention of the Victoria Cream and the opening of the first retail shop in Victoria. Another huge milestone was that the company remains open, continues to be successful and shows growth even after the death of Charles Rogers for over 120 years.

Firm learned/gained:

Rogers' has correctly segmented the market for their products by shifting focus on the retail market by planning additional stores. This will increase their geographic area and introduce their products to a larger market. Rogers’ has expanded their product scope. They are also learning how to use the internet more effectively to increase sales and advertise their product lines.

Firm lost/sacrificed:

There are many areas where improvements could be developed. Geographic segmentation could be better defined and developed. Rogers' has not challenged its competitor’s due to its slow development from its geographical area. Franchisee development along with better integration of wholesalers and retail chains could help Rogers' gain a controlled entry into other geographic regions.

Futures:

Rogers’ Chocolates investors want sales to double or possibly triple within the next 10 years. The key marketing opportunity is to raise company brand awareness. They strived to become a leader in the premium chocolate market category. The company also hopes to increase manufacturer capability and brand recognition of their product lines. Focus on the health conscious organic and sugar free products to attract a growing population of conscientious consumers.

 Conclusion:

Overall, Rogers’ Chocolate has many challenges but is in a good position to grow their business. The company’s profits and revenues are continuing to increase but they are not keeping up with the competitors of the industry. To be able to expand as planned, Rogers’ is going to have to modernize and implement an integrated production planning and operational control to decrease its cost of operation. Hand processed and wrapped chocolates need to become part of the past except for possibly putting that final touch on a premium product line.

They need to streamline and automate their production in order to improve the efficiency of their plant before they expand. They will need to compete in price and have the production capability to mass produce the planned lower end chocolate product line. Additionally the company needs to look to lower cleaning costs and reduce set up times. Due to the company’s workplace culture, this will have to be implemented carefully. Rogers’ relies heavily on their British Columbia geographic segment which is where most of their retail stores are located.

In the future Rogers’ Chocolate should consider branching out and testing other geographic areas for their retail stores. The wholesale business should be expanded though a selective process to acquire additional profitable wholesalers. The wholesale operational segment is an excellent vehicle to build sales without much capital expenditure. They will steadily increase Rogers’ sales and profits. An increase in sales and strong customer brand awareness will be created by the use of a well-executed web site design. This will serve as an asset to their loyal customers and attract potential younger customers.

This firm has several critical stages on their value chain; suppliers, main factory, distribution processes, and finally service. They need to insure that they find more reliable providers of their tins and boxes so they are able to fill orders during the peak times. Rogers’ has very good control of their supply chain through company owned retail stores and wholesale distribution.

Appendix B:

International Strategies

The Strategic profile of a firm indicates why the firm is performing the activities it is involved in as well as why it is operating the way it is. The firm’s leadership typically develops strategies at different stages. Because they are not very diversified they are able to concentrate and take full advantage of their expertise of producing high quality chocolate. Because they are vertically integrated they and will be able to benefit from low transportation costs, have control over supply chain coordination and maintain the high profit margin from their retail stores.

• Rogers’ is unable to take full advantage of having one manufacturing plant to control and lower costs due to its outdated manufacturing technology. This would represent a significant advantage for Rogers’ in pricing when they are able to decrease production costs to produce a better ROI and provide the capability to expand in the future.
• It demands that they pay close attention to their suppliers in order to insure quantity and quality of raw ingredients. This is extremely important due to the seasonality of sales. They need to maintain early production scheduling for the wholesale business and a shorter schedule for the retail sales.

Business Level Strategy

The business level strategy identifies the firm’s generic competitive strategy, whether or not it seeks to redefine industry competition, how quickly it plans on expanding to new markets, and its overall approach to the marketplace.

Rather than being a low-cost firm they use differentiation to gain a strategic advantage that helps distinguish their chocolates from the competitors’. b. The firm has a 127-year history of providing its customers with only the highest quality, most excellent and delectable chocolate products. This has created an exceptional amount of value for customers over the years. c. Generally Rogers’ Chocolates is considered a small firm, with just over 300 employees and only 11 retail stores, located mostly in Western Canada. However, the firm still had over $11 million in sales in 2006 and is one of the top premium chocolate brands in Canada. d. Rogers’ is able to stay competitive and ahead of competition by continuing to please and satisfy their current baby-boomer customers.

With Rogers’ chocolates however, the firm uses only the finest ingredients during production, which are not the lowest costing materials. Rogers’ is much smaller than most of the industry’s firms, having only one production plant and still bringing in over $11 million in sales annually. b. Another good indicator that Rogers’ is following a differentiation strategy is the firms overall emphasis on quality, their high quality raw materials, the attractive labeling and packaging on all their products, and most of all the highly regarded brand name. 3. Geographic Scope a. Rogers’ participation in the market can be best described as both regional and global.

All of the firm’s retail stores, Sam’s Deli, and most of the wholesalers that sell Rogers’ chocolates are located in Western Canada. The retail stores, wholesale accounts and Sam’s Deli account for 50%, 30%, and 10% respectively. The rest of the sales come from Online, phone, and mail orders. Rogers’ will ship their delicious products all around the world, helping bring a global aspect to the company. 4. Client Firm Type a. Out of the four typologies of strategic engagement, defenders, prospectors, analyzers, and reactors, Rogers’ chocolate is best described by the defenders role. Defenders are defined as the organizations that have very narrow product-market exposure, and they focus on limited adjustments to continue delivering value in these chosen markets.

This fits Rogers’ because the firm focuses mainly on producing the best quality chocolate, and has changed their product very little over the years because of its high quality. C. Functional Level Strategy Supports the firm’s chosen strategies at the corporate and business levels and evaluate how the firm has delivered on these strategies. The most critical of the functional strategies for Rogers’ chocolates would have to be their production. The high quality chocolate they produce is top of the line, and it comes from over 120 years of perfecting the recipe. Rogers’ has created a brand value that is remarkable and stems from the quality of production and quality of the finished product. D. International Strategy The ways in which a firm arranges which strategies it can implement to achieve international success. a. Rogers’ Chocolates brings in only 10% of their overall sales from online, phone, and mail orders.

When considering not all of those orders are international sales, Rogers’ does a very small percentage of their sales internationally. The firm competes in markets all across the globe, but only has stores in Canada; so all international sales are orders that are shipped out from the production plant. Firm views the world as a single marketplace and its primary goal is to create standardized goods and services to address the needs of customers worldwideHow: Build cost advantage through centralized global scale operations. Requires centralized and globally scaled resources and capabilities.

The reasoning behind that is Rogers’ does not change its’ recipe or strategy for international markets. They stick with what works for them and has gotten the firm to this point and it continues to work and help the firm grow. II. Conclusion: Rogers’ corporate strategy is to aggressively grow their business. They want to double or triple the size of the corporation. In order to accomplish this goal they should look to their strength retail marketing. This helps maintain control of the business and exploit Rogers’ premium brand while introducing new or existing products like ice cream. They should look to open stores in similar areas keeping the Rogers’ customer experience of free samples and first class treatment.

If they are able to open 2 new stores a year it would add about 10% to Rogers’ top line. With the projected growth of 15% from existing retail stores Roger’s will have the cash flow to finance the growth in retail store and increase advertising for online business. They should also look to grow sales and geographic presence through the wholesale business.

Appendix C:

• Purdy’s positioning is the least similar to the image Rogers’ hopes to attain and likely appeals to a very different customer than Rogers’’ target consumers. Purdy’s may also be associated with Canadian heritage.
• Lindt: Lindt has wide variety and mid-range quality with emphasis on immediate indulgence. There is less association with the sensory experience of eating chocolate and more on immediate gratification.
• Godiva: Godiva commands a high-price point because customers think of the brand as sleek, modern, glitzy and high quality. Godiva’s positioning is the most similar to the image Rogers’ aims to attain and likely appeals to similar target consumers
• Bernald Callebaut: Bernard Callebaut is seen as good quality, innovative, customizable, and premium priced. Bernard Callebaut’s brand is unknown outside of Western Canada.

Based on this information, Rogers’ showed a decline of just over one percent in net revenue from 2005 to 2007. iii. Horizontal Analysis of Income Statement To perform a trend analysis of the income statement, subtracting the previous year’s net income from the current year’s net income, then dividing by last year’s net income will provide the percent change in net income.

Cash Flow Analysis

Cash flow analysis examines the financial statements from the perception of cash that is entering and exiting the firm. Cash flows come from the follow three categories: operating, financing, and investing. Each category adds the cash inputs and subtracts the cash outputs to provide a total cash flow. Then all three category’s totals are added to provide the net change in cash for the years. That num Qualitative Performance Analysis Rogers’ Chocolates has a long history of providing the finest quality chocolate to their customers.

A panel of European chefs named the Rogers’ assortment as “top-of-the-range-product” filled with “abundant and rich chocolate aromas. ”

• CEO Steve Parkhill described his first experience investigating Rogers’: “I asked everyone I knew what they thought of the brand. I received one of two reactions. People either said, ‘I’ve never heard of it,’ or they said ‘Oooooh, Rogers’. That is the best chocolate I’ve ever tasted’. ”
• In 2000, Rogers’ won the Retail Council of Canada’s Innovative Retailer of the Year award in the small business category for expressing “outstanding market leadership and innovative approaches to customer and employee relations. ”
• In 2006, the company won the prestigious Superior Taste Award from the International Taste ; Quality Institute.
• Overall, Rogers’ is one of the most highly thought of chocolate manufacturers worldwide. Their delicious products, made from only the finest all natural ingredients, continue to impress new and old customers alike and keep them thriving in the competitive business with firms such as Godiva, Bernard Callebaut, Lindt, and Purdy’s. )

Conclusion

For the small business that Rogers’ is, they appear to be doing quite well in their industry. Of course, not much can be determined about the overall direction the company is headed from just two years of data. However, with positive inventory turnover and a profitability ratio over 50% for both years, we can conclude that Rogers’ is holding their ground in the chocolate industry.

A few areas of concern for the firm would be the negative figures for percent change in revenue and percent change in income from the horizontal analysis. The loss in revenue was only about two percent, but the loss in income was nearly 17%, which could be a concern if it continued. Again, we have to remember there are only two years of data and 2006 could have simply been an off year for the company and they did not perform up to their standards.

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