PESTEL:

1) Political: Large state manufactures seeking allowance from the United States food &
drug administration to redefine Chocolate so they can produce cheaper ones. Pg1.
2) Economical:
a. Customers & Consumers demand for CSR (Corporate Social Responsibility).
b. Financial crisis reduced the number of tourist, hence the sales of the company.
c. Competitive prices from the competitors.
d. U.S. market for chocolates: US$19.3 billion in 2011, 6% growing annually.
e. The premium chocolate market: US$2.7 billion in 2011, 10 % growing annually with
higher margins.
f.20% sales in 8 weeks leading up to Christmas.
3) Social:
a. The growth of demand for organic and dark chocolate due to it is heart and anti-
oxidant properties.
b. Challenge of growth to increase awareness without diluting the brand.
4) Technological:
a. May want to focus on tech. that other larger competitors utilize, such as forecasting
models for sales so that they dont short-out on inventory.
b. Increased internet shopping of younger demographic is a huge opportunity.
5) Ecological: Environmental concerns influenced packaging, procurement and operational
decisions.
6) Legal:
a. Chocolate companies are targeted due to forced labour and child labour in cocoa
bean production.
b. Non-union vs. union practices.

KEY DRIVERS: slowdown in tourism since the financial crisis, local customers
looking for cheaper substitutes (p.4,5) & social responsibility.

Porter Five Forces:

1. Competitive rivalry: High

a. It is high because of the competitors of roughly equal sizes page 2.
b. Strong aggression for leadership in the chocolate industry.
c. Rivalry is high due to a mature market.
2. Threat of entry: Low
a. Barriers are high because not much people are experienced or knowledge for the
industry.
b. Entry into premium chocolate market requires large capital investment for branding and
production facilities
c. There are already both major international players and regional, high quality brands with
loyal followers
d. Barriers are also high for new entrance because they need to have access to supply and
distribution channels.
3. Threat of substitute: High, Numerous brands of higher and lower quality/price points,
even similar premium regional products.
4. Bargaining of buyers: Low
a. switching cost is high there is no alternative to cocoa also the buyers cannot
supply their raw materials because it is in west Africa and the factory in
Portland.
b. quality that are not easily obtainable by customers
5. Bargaining power of suppliers: supplier power is high because suppliers are few,
switching cost is high too.
 A = salaried rep

B = customers, employees

C= business lines (retail stores, wholesales),

suppliers

D=Board of Directors (Steve Parkland, Mary

Bird, Sven Amundsen, Jim Bill)

SWOT:

Strength Weaknesses

Long business history. Old technology.

High quality product.
Good customer service.
Devoted and passionate employees.
Customer loyalty.
Award winning recognition.
Well established and reputable brand.
Not well known.
Management and Employees resistance to change.
Heritage image incorporation packaging.
Poor demand forecasting.
Inefficient product planning.
No measures of productivity.
Inventory Management Out of stock and over stock.
Lack of online sales.

Opportunities Threats

Organic, Dark Chocolate products market. Economy and demand fluctuations.

Retail and Online Expansion.
Joint Partnerships.
Second shift possibilities.
Consumer traffic decrease in tourism.
Environmental concerns and human rights concerns.
Governmental FDA rules "redefining" chocolate
Limited targets.
Increase in competitors eg. Godiva, Lindt, Delice,
Cardon and Belgian.
 VRIO:
value: creating activities: outbound logistics, marketing and sales, service,
HRM
rarity: marketing and sales(special packaging-temporary because
competitor can imitate), HR because each hr has particular characteristics,
service(online/phone priority, delivery in many countries)
inimitability: hr(you cant imitate hr knowledge), technology
development(IT system-innovative program-Wong)
organizational support: marketing and sales support operations(about
customers needs), HRM supports all other activities, technology
development( supports every activities-Wong developed all of Charles
internal production planning systems)

7s:
1-Strategy: high quality of products, heritage decoration in the retails.
2-Stracture: Board of directors, president, management team
3-System:poor control, hand packaging, batch processing
4-Skills: skilled employees, good management team
5-Staff: 75 retail, 35 production, 20 management, administration, sales,
non unionized, enjoying multiple tasks.
6-Style: old fashioned

1) ACTIVITY ANALYSIS:
Weaknesses Strengths

Firm infrastructure: management, network

HR management: hiring & training employees, i.e. plant workers for multiple functions
(p.3) or employees for Sandwich Heaven (p.5)
Technology development: companys own development of production planning
systems (p.6), website hold easily to load fast, has an ordering facility, a reminder that
emailed customers and links to resellers; and search engine optimization (p.5)
Inbound logistics: buy raw materials, production planning for the following year (p.3),
filling back orders for out-of-stocks, handling demand forecasting: early seasonal
production for wholesalers and late for retail stores (p.3), phone and online customers
are priority (p.4)
Operations: batch processing, hand packaging, set up machines (p.4), managing the
retail stores, developing marketing plans, overseeing the online and wholesale business,
Sandwich Heaven and the ice cream business; supervising the managers and the order
desk staff (p.6), product development, material requirement planning, candy-making,
ice-cream making and management (p.6),
 Outbound logistics: delivery to the customers to many countries and places in the
world (p.4), delivery to the retail stores and wholesalers (p.3), short supplies are
delivered from their own stores
Marketing and sales: targeting affluent customers for themselves or for gifts,
advertising in tourist publications, seasonal print media and radio spots, donate product
extensively to charitable events (p.5)

There are costs associated with all these activities and value created for customers

2) VALUE ANALYSIS

you think through what you would do to add the greatest value for your customers

plant workers for multiple functions: train them more specialized to improve efficiency to fulfill
orders better and better measuring of efficiency

problems in hiring employees for Sandwich Heaven: (due to this problem - lack of efficiency
arose according the opening hours) offer employees better conditions: i.e. higher salaries,
reduced working hours etc.

product development: materialize product development till the end

links to resellers: inform them about the importance

out-of-stocks: improve efficiency and/or open a new plant (requires more storage space)

hand packaging: keep the traditional design (classic images and the texture used) but develop a
modern way of packaging to attract younger customers and to reduce costs

set-up time for machines: develop a new plan on using the machines that avoids too many
changes in its use; design a new test system to monitor the efficiency and productivity

delivery conditions: focus on the national (60%) market and Canada (35 %) and stop delivering
to other countries

short supplies are delivered from their own stores: suggestion that will face some additional
costs but contains the possibility to create further value for the customer: stop delivering out-of-
stocks to wholesalers from their own retail stores but establish an additional storage to deliver
to a resellers if necessary

Marketing and sales: advertisement on ships that bring tourists