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Real chocolate case study - Essay Example

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Summary
The strategic position of the Real Chocolate Company is an impressive one. Record earnings for the year ended February 28, 2007 turned out to be great as the revenue showed an increase of 12 percent. The system wise sales of their franchised as well as company owned stores rose by 9 percent…
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Real chocolate case study

Download file to see previous pages... Stores sell around 100 chocolate varieties. Apart from this there are 15 types of fudges available as well as over 30 varieties of caramel-covered apples. The company is very particular about customer service and their main concern is to provide the best available products.
The Real Chocolate Company has stores in 65 of 110 factory outlet malls in the United States. The location of stores is selected on the basis of the area, attractiveness, costs and other important factors. The company has been a very successful one and its aim is to build the Company into the leading retailer of chocolates in the United States.
The opportunities and the threats are external for the company and they can only be determined looking at the moves of the competitors and the other external factors that have a major impact on the company as a whole and its stakeholders as well.
Although the Real Chocolate Company is prospering, there are specific factors that have to be considerd before we can decide whether it will continue to do so. There are certain threats looming which could make the maintainance of this level of progression challenging.
One such threat is the degree of competition that the Company would be facing in the coming years. Competitors have been working at producing new products in order to attract customers. They have been introducing healthy items to make their production available to a greater range of customers. Such items include candies with vitamins and skin-enhancing ingredients, sugar-free sweets, chocolate bars with specific elements that would be suitable to people with heart-related problems, etc. Thus, there is a danger of substitution. Apart from existing competitors there is the threat of new entry in this business. The ability of other organizations to enter a market affects power. It differs in different cases. Where there is a free entry and exit, low setup and documentation costs are involved, entry is formed instantly and would be vice versa in the case when there are barriers to entry, etc.
Another threat to the Real Chocolate Company is the fact that there is a rise in obesity in the United States. This would affect their sales unless the company manufactured products suitable for such people. Customers are also faced with the problem of allergies, such as peanut allergy. The Company has to be taking this into view as well.
There is also an increased cost to keep up with the manufacturing technological progress. The Company should keep this in mind as well. The cost problem is also connected to other areas, for example the wages. There will be increasing minimum wages which the Company will have to counter and so the cost of manufacturing will increase. Also, the cost of raw materials and transportation may increase, once again leading to ...Download file to see next pagesRead More
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