Rogers' Choclates Case

ers'Jake Solomon

February 21, 2011

MGT 495, Professor Tibbetts

Rogers’ Chocolates

1. Competition in the premium chocolate industry is moderately low, but will increase as more competitors enter the market. The Canadian Chocolate Industry was valued at $167 million in 2006 and was projected to grow 2% over the next year, but growth rates have been falling. However, the Premium Chocolate market is growing about 20% annually. The Canadian market is characterized by largely regional brands that perform strongly in select areas. The regional nature of this industry and the fact that most competitors drive the bulk of their volume from different distribution channels results in moderately low rivalry. The strongest competitive force is Threat of Substitutes. Though Rogers’ has a loyal and almost fanatical customer base, it may face issues when trying to expand its market share. Specifically, zero-switching costs and the price-performance trade-offs of substitutes pose threats when dealing with customers who do not have some sort of emotional connection with Rogers’. The weakest force, which also poses a significant threat to Rogers’ are the barriers to entry. Godiva for instance is backed by the economies of scale, distribution, and access to capital that Nestle can bring to the table.

2. The two types of change that the industry is facing are consumer-driven and competition-driven. Societal changes result in changes in consumer tastes. The first is the desire for healthier, more natural products and ingredients. Organic chocolates and Dark chocolates are seeing higher demand and getting suppliers who can meet the need for organic ingredients is a specific issue. The sourcing of cocoa beans is undergoing increased scrutiny as awareness of forced and child labor is on the rise. More affluent consumers which represent Rogers’ target market are especially critical of organizations that do not follow good corporate social policy. This is another...