Chocolate Industry

Chocolate was previously considered a “delectable symbol of luxury, wealth, and power” (Klein) in the 1500s. Using modern technology, it is now easily produced. While

The premium chocolate industry is a large market in the United States and continues to grow around 10% annually. It is also populated with very strong

At Scharffen Berger Chocolate Maker, Jim Harris was the COO (chief operation officer) and was with the company for about 18 months and was observing the increased demand for their chocolate. “America’s finest dark chocolate” company wanted to increase production by equipping factories with new machineries and equipment but did not want any difference in the taste of the chocolates they produced. As the company totally agrees on not compromising the taste of chocolates and increase the production in order to meet the rising demand for their chocolates they should probably get into customizing chocolates blend for the mass-market retailer in order to grab huge market share, increase accessibility of the chocolate to customers and provide variety of choice to the customers by maintaining the taste they are known for. As the demand is increasing from 50%, 100%, to 150% by the start of 2006, Harris has to make a significant decision in order to invest Scharffen’s capital budget in expansion of the Company. Harris is recommended to acquire the required machinery in order to fasten the production and increase the capacity of the plant and should be careful about the quantity to be produced as the acquiring of machinery will increase productivity multiple times but the initial demand for

The basic characteristics of the marketing concept that could be identified in Clare’s Chocolates are as follows:

(Roy, Matthew) The small companies hold a very small part of the market; approximately 13.6%. (Roy, Matthew)The four larger companies hold the other 86.4% of the market. (Roy, Matthew) These four big cereal manufacturers are Kellogg, General Mills, Post, and Quaker Oats. “Great Barriers to entry and the inelastic nature of cereal allow this oligopoly to exist and numerous government attempts to end it have failed.” (Roy, Matthew) Due to the oligopolistic nature of the industry companies are able to turn large profits as well. (Roy, Matthew)

Hershey’s and Cadburys are moving towards the premium chocolate market through the acquisition or upmarket launches (Zietsma, 2007). The profit potential present in this sector supported by its 20% annual growth rate make it very attractive for large organizations to come forward and avail this opportunity. There is a low threat of new entrants prevailing in this chocolate industry because of the high capital requirements and expected retaliation by current manufacturers. Current players in the industry also possess some barriers to entry for new entrants by maintaining economies of scales with their large production capacity and keeping their product differentiation with their specialized and novelty chocolate products. Even though there are low switching costs and easy access to distribution channels, but still the brand loyalty of the customers including the Rogers’ Chocolate itself make it harder for new firms to come into the competition.

While Europe and the United States account for most chocolate consumption, the confection is growing in popularity in Asia and market forecasts are optimistic about the prospects in China and India (Nieburg, 2013, para 9). According to the CNN Freedom Project, the chocolate industry rakes in $83 billion a year, surpassing the Gross Domestic Product of over a hundred nations (“Who consumes the most chocolate,” 2012, para 3).

e) Maintenance contracts - Maintenance costs should be included as incremental cash flows because they could change the NPV of the project if the maintenance costs are significantly different for each of the different projects.

The transportation cost of chocolate was high and small mom and pop stores commonly supplied chocolate made locally. Today you would be hard-pressed to find local chocolate in the United States, with the shelves dominated by four major brands. The

One important underlying driver of change in the chocolate industry is the large manufacturers lobbying to change the definition of the term "chocolate" under USFDA guidelines, if they are successful in doing this then this could potentially have a dramatic impact on the competitive environment, with lots of cheaper products

Alphonse, a cacao farmer, has never tasted or seen chocolate before. When Alphonse tries chocolate, he immediately gets why people the world over are buying it. "Ooh! It's nice ... and very sweet!" he exclaims . He and Kouassi speed off on a motorbike to share it with other cacao farmers and the young men who help him on his plantation. "This is why white people are so healthy,” Alphonse tells the other farmers as they pass a chocolate bar around a circle (“How to Make”). Many people in Western Africa don’t have the luxury of buying, eating, or even smelling chocolate. For many people on the Ivory Coast, cacao farming is their way of life. Cacao, a profitable crop grown primarily for export, comprises sixty percent of the Ivory Coast’s export revenue. As the chocolate industry has grown over the years, so has the demand for cheap cacao. On average, cacao farmers earn less than $2 per day, an income below the poverty line. As a result, they often resort to the use of child labor to

The premium chocolate market has been growing at 20% annually, showing that buyers are willing to pay more for a better tasting and better quality chocolate. The declining growth of the overall chocolate market and rapid growth of the premium chocolate market is positive for current producers of premium chocolates in that the decline

The following statistics stated in the case indicate that “23% of respondents would definitely buy the Montreaux dark chocolate with fruit product and 40% would probably buy the product.” These average ratings strongly suggest that this product should be introduced into the market very gradually. This strategy would enable the company to evaluate consumer buying patterns so that the company could determine future production levels and future marketing strategies that benefit both the company and the consumer. Financial information given in the case also indicates that the company needs to introduce this product very conservatively. Exhibit 1 informs that with 5.98 million total purchases, low awareness, low ACV and mediocre product, Montreaux would gross $17.44 million. Exhibit 2 shows that with medium awareness, medium ACV and an average product Montreaux would gross $25.1 million. These figures do not meet Montreaux’s objective of earning at least $30 million in its first year. Exhibit 3 shows a slightly improved situation: with high awareness, high ACV, and an excellent product, Montreaux would gross

The Scharffen Berger Chocolate Maker is experiencing an exponential year over year growth rate of their premium product. This is a situation that all new businesses strive for and although Scharffen Berger is pleased with their growth, they are facing a potential dilemma. The company must consider how they will keep up with growing demand while having enough capacity to handle the increase in production and maintain their high quality standards.

From the perspective of Utilitarianism, child slavery contributes the economics position of thecountry. As I know, the economic situation of the country is bad, they are one of the thirdworld countries. What is more, cocoa beans prices decreased in the year 1996 - 2000. So,farmers want to reduce the cost of production with cutting the wages and using slavery.According to Utilitarianism, the “right” action or policy is the one that will produce thegreatest net benefits or the lowest net costs. From that point, they reduce costs, and maximizetheir net benefits from child slavery. The major difficulty with Utilitarianism is that it isunable to deal with rights and justice. For instance, from the point of social justice, it is clear that