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Optimal Development Strategy of Real Chocolate - Case Study Example

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The study “Optimal Development Strategy of Real Chocolate” offers to choose the best strategy - continue to follow the current strategy or developing franchise model, to promote the product through the mass marketing channel, make a strategic alliance with new artisan chocolate players etc…
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Optimal Development Strategy of Real Chocolate
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Download file to see previous pages Apart from the usual stakeholders in the form of shareholders, financial institutions, employees, customers, the Real Chocolate Company has another key stakeholder the franchisees, through whom all the growth and revenue for the company will accrue in the future.
At the moment the company is comfortably placed in terms of overall performance. However, the company has to ensure maintaining levels of profits and growth in the long term, through a strategy that will give it a sustainable competitive advantage.
The chocolate industry is highly fragmented industry with about four hundred companies accounting for 90% sales. Retail chocolate sales reached $16.3 billion for the year ended December 2006, out of which the Gourmet segment is about $ 1 billion. Real chocolate has about 10% of the market share in this segment.
Competition is on the rise and product differentiation, branding will be the key parameters by which sales will increase.
The conclusions drawn from PESTEL and Five Forces analysis and the Threat/opportunities table would be as follows:
1) From Porters five force analyses it emerges that Rivalry among existing players will be the chief competitive force in the industry. A decline in profitability which often is the result of this will come from an increase in promotion and branding cost.
2) Even though the analysis reveals that entry barriers for new players to enter are not very high, new entrants may not find it attractive to enter.  Entry may occur by players creating a separate niche which may affect demand for the product in which Real chocolate operates. (e.g. of artisan chocolate entry which has already happened) etc. ...Download file to see next pagesRead More
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