Real chocolate company - Essay Example

The company sells its products through retail stores both company owned and franchised. It produces wide variety of chocolates (that caters to the different tastes of the customers) at the company owned factory and delivers the same, to stores in a cost effective manner. The products such as fudges and caramel apples are made within the store in order to maintain the freshness. The convenience and the suitable tastes of the products are directly correlated with the number of foot-falls in the stores and overall sales.

The key stakeholders of the company include all franchisees, employees, company owners and customers. With the company deriving a 72 percent of revenues by selling the products to franchisees, the satisfaction of the franchisees stands crucial for the company in order to keep the sales growth intact in future years. Also, keeping abreast of the changing consumer preferences is becoming a must. While the company sales growth and financials appear sound, many smaller and similar sized companies having variety of product offerings, fast changing consumer eating habits with rising income levels, aggressive marketing strategies of market leaders, maturing and fragmented nature of the industry is posing challenges for the company to maintain its current growth.

This report evaluates the various external and internal factors related to the company’s business, and presents a strategic solution for the current problem faced by the company. The analysis of the five competitive forces (suggested by Michael porter), viz. threat of new entrants, threat of substitution, bargaining power of buyers, bargaining power of suppliers, and rivalry among the existing companies, better explains the nature of confectionery industry and provides the basic road map to develop a competitive strategy for The Real Chocolate Company (Porter, 1998).

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