Chocolates El Rey

List the tools one can generalize from Jorge Redmond’s experience.

Before referring to Jorge Redmond’s options to grow his business, it’s worthwhile noting that Chocolates El Rey (“El Rey”) confronts issues in the following three dimensions:

1. Health of the local market (Venezuela): Does Venezuela provides the micro-market space for further growth in “Retail” or “Food Services” segments? Does Venezuela as country provides a stable socio-political and economic platform to produce and market the company’s products?

2. Existence of Value Arbitrage in International Markets: Is it possible to promote the Company brand abroad given the existence of value arbitrage international markets? (e.g. many international brands provide lower quality products and charge higher prices despite the brands other than El Rey use a higher percentage of the less expensive beans). Can brand recognition be built cost-effectively in a reasonable amount of time?

3. Constraints on managerial and financial resources: Does El Rey has the capabilities to develop its brand further (locally/abroad)? Given the size of the company and the political/economical instability in Venezuela, is it reasonable to “bet the house” on developing world-class capabilities? With limited resources, I s it possible to build a distribution arm in US?

Based on the aforementioned criteria, we can list and assess options that Mr. Redmond confronts to fulfill his dream of making Venezuelan cocoa world famous (not necessarily mutually exclusive):

Strategy | Strengths | Weakness/ Risks | Comments |

Grow in the industrial segment in the US | * Leverage on current retail brand | * Brand Erosion of El Rey’s brand due to downgrade of quality * Inconsistent value proposition * Implies using lower quality materials to compete in a price sensitive market | * Not align at all with Jorge’s dream |

Growth in retail market in the US | * Higher Margins * Biggest market | * Requires...