Rogerschocolates

Introduction

Roger’s Chocolates is a 120 year old Canadian company competing in the premium chocolate market. The board of directors has recently hired a new company president, Steve Parkhill, and challenged him to grow the company 200 – 300% over the next 10 years.

Analysis

General Environment – The PESTEL framework for evaluating the external environment includes classifying external macro forces into six segments – political, economic, sociocultural, technological, environmental, and legal – and evaluating how these forces could impact a company’s strategy (Rothaermel 2013):

* Some of the larger chocolate manufacturers are seeking to challenge the USFDA’s definition guidelines to redefine how “chocolate” is defined which would allow cheaper “chocolates” and more competition.

* The economic factors impacting the industry include the decline in the US dollar and the corresponding reduction in tourism from the US which would tend to reduce sales in Canada. Slow economic growth and high unemployment would also tend to drive consumers to the non-premium chocolate brands.

* Sociocultural factors are driving the demand for healthier diets and the use of organic ingredients challenging supply channels and current product recipes.

* As technology continues to improve companies using updated technology will likely have a competitive advantage through lower costs and better inventory management, especially given the seasonal sales pattern of the chocolate industry.

* Ecological factors impact the industry through environmental concerns of customers and employees to promote social responsibility and sustainability efforts.

* Legal factors can impact the industry through increased regulations and tariffs imposed on imports leading to increased costs of raw materials.

Industry Environment – The five forces model developed by Michael Porter to evaluate the industry environment includes – 1) threat of entry, 2) power of suppliers, 3) power of...