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ROSLAN ABD KARIM (MR081075)
MEHDI ABBASNIA (MR081182)
JIANG HONG (MR081082)
NIMA KHODAKARAMI (MR081189)
MUHAMMAD ZULFAKAR AHMAD
(MR081062)
GROUP LEADER:
ARASH VOSSOUGHI (MR071108)
Foreword
Based on the strategic decision‐making approach, in the first step, we evaluated
Rogers’ Chocolates current performance. A summary of financial ratios has
been presented as Appendix 1. We had a review over the company’s current
mission, objectives, strategies, and policies (Appendix 2). In the second step,
based on the case information, performance of the firm’s Top Management has
been reviewed. Later, we have scanned external environment of the firm in
order to determine the strategic factors that pose opportunities and threats.
Then the internal environment of Rogers’ Chocolates has been scanned to
determine the strategic factors that are Strengths and Weaknesses and we did
an in depth SWOT analysis to pinpoint problem areas (Appendix 3). In the light
of the analysis, we have tried to follow the strategic decision‐making approach
in case analysis and decision based on the exclusive framework of Dr. Lai.
NOTE: Appendixes have been attached to the hard copy of this document
IBS, UTM CITY CAMPUS, STRATEGIC MANAGEMENT, MRB 3012, CASE ANALYSIS & DECISION, ROGERS’ CHOCOLATES, GROUP 2, JULY 2009
Rogers’ Chocolates
1. STRATEGIC MATTERS:
Two different types of strategic matters that need strategic decisions have been identified:
2. ISSUES: In order to address each of the strategic matters, the most important things to do are:
Issue 1: Whether to implement integrated production planning and operation control systems.
Issue 1: Whether to implement integrated production planning and operation control system.
A 1: No. Coping with the current situation
A 2: Yes. Implementing integrated system for production plan and controlling operation
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IBS, UTM CITY CAMPUS, STRATEGIC MANAGEMENT, MRB 3012, CASE ANALYSIS & DECISION, ROGERS’ CHOCOLATES, GROUP 2, JULY 2009
4. CRITICAL FACTORS
Issue 1: Whether to implement integrated production planning and operation control systems.
Mostly within Canada Capturing a broader Online selling system enable firms
Global sales
and US. market to capture a broader market
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IBS, UTM CITY CAMPUS, STRATEGIC MANAGEMENT, MRB 3012, CASE ANALYSIS & DECISION, ROGERS’ CHOCOLATES, GROUP 2, JULY 2009
Unknown brand outside More brand awareness Well trained and more dedicated
the Victoria. Also, some outside the region via employees enable to present the
Brand awareness
reps cannot present the well trained and more brand adequately and appropriately
brand adequately. committed employees sell it outside the region.
Taking
Presence in a wider market along
advantage of
No growth Higher growth rate with more brand awareness enables
the growing
the firm to gain a higher growth rate.
market
5. EVALUATION OF ALTERNATIVES
5.1, Issue 1: Whether to implement integrated production planning and operation control systems.
ALTERNATIVES
ALTERNATIVES
ALTERNATIVES
CRITICAL FACTORS BASED ON FUTURE
SCENARIO No. Current system is Expanding online selling
good enough system and e-marketing
ALTERNATIVES
CRITICAL FACTORS
BASED ON FUTURE More emphasize on Expanding retail Expanding retail
No
SCENARIO retail rather than system within the system to other parts
expansion
wholesales region of the country
6. STRATEGIC DECISION
Rogers’ Chocolates will be able to address both of its aforementioned strategic matters through the
following stepwise decision process:
1. First and foremost, Parkhill is to address the firm’s production and operation problems by
implementing integrated production planning and operation control system. This will help him to
gain a proper control over the business.
2. In the next step, he should develop new concepts of products and packaging in order to
attract diverse group of customers.
3. The third step will be to develop and expand the firm’s online selling system. This will be a
platform for the firm to capture a broader market and attract younger and new customers.
4. After the three aforementioned steps, Roger’s will be ready for expanding. Expanding retail
sales for the Roger’s will take place in two steps as followed:
• Regarding to numerous internal problems that Rogers’ is currently facing, prior to any other strategy
implementation, Parkhill should address these problems by implementing integrated production planning and
operation control systems as soon as possible. It needs a watchful eye to analyze each and every function in
order to find out the best way of doing the job. This is a teamwork job under direct supervision of the CEO.
• Rogers’ can take advantage of change in consumer preferences for organic and healthier chocolate. At the
other hand, Rogers’ old fashion way of packaging products seems to be one of the main causes of the
firm’s slowdown. Therefore, new concepts of products and packaging need to be developed in order to
differentiate the firm from its rivals and to attract diverse group of customers. Marketing research and
consumer preferences survey should be conducted in order to find out what exactly consumers need. This
strategy should be implemented right after finishing the previous one.
• Currently, Rogers’ is confronting with “customers aging” issue. At the other hand, today people tend to do
everything Online! Therefore, expanding online selling system and e-marketing will help the firm to
capture a broader market as well as younger generation. Rogers’ is to develop an easy to navigate, multi
lingual website and doing aggressive e-Marketing activities as well as to try to take the highest rank in pioneer
search engines. Parkhill can implement this strategy simultaneously with the previous with the help of
Marketing VP and a reliable IT counselor.
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IBS, UTM CITY CAMPUS, STRATEGIC MANAGEMENT, MRB 3012, CASE ANALYSIS & DECISION, ROGERS’ CHOCOLATES, GROUP 2, JULY 2009
• After successfully implementing all mentioned strategies, Rogers’ will be ready for expanding its retail sales system. Analysis and records
prove that this is the best strategy to take advantage of the growing market. Expanding retail sales for the Roger’s will take place in two
steps. In the first phase, Parkhill should acquire 3 retail shops in downtown Victoria with long term lease agreement. Marketing VP should help
him in finding the most appropriate location. After two years, positive results of the previous implemented strategies and after gaining the
projected ROI will be ready for more expansion. To presence in a wider market and taking more advantage of the growing market, Rogers’
will continue its expansion through acquiring high-end retailers in Vancouver, Ontario, and Whistler. CEO, with assistance of Marketing VP are
responsible for implementing expanding retail sales strategy.
Rogers’ implementation action plan has been summarized in the following table:
WHAT Production planning and New concepts of products and Expanding online selling
Expanding retail sales Expanding retail sales
to implement? operation control systems packaging system and e-marketing
Based on consumers
Engineering all functions to Easy to navigate, multi lingual
HOW preferences survey, producing 3 retail shops with long Through acquiring
find out how resources are to website and aggressive e-
to implement? organic products with more term lease agreement high-end retailers
be utilized Marketing
contemporary packaging
WHEN ASAP, and should be finished at Simultaneously with the After finishing the 2nd After finishing the 4th
Right after the 1st strategy
to implement? the end of 2009 previous strategy strategy strategy
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IBS, UTM CITY CAMPUS, STRATEGIC MANAGEMENT, MRB 3012, CASE ANALYSIS & DECISION, ROGERS’ CHOCOLATES, GROUP 2, JULY 2009
8. POTENTIAL PROBLEM ANALYSIS
STRATEGIC DECISION MADE
Implementation
1. Production planning and 3. Expanding online selling 4. Expanding retail system
Actions 2. New concepts of products
operation control systems system and e-marketing 4.1 Within the region 4.2 Outside the region
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IBS, UTM CITY CAMPUS, STRATEGIC MANAGEMENT, MRB 3012, CASE ANALYSIS & DECISION, ROGERS’ CHOCOLATES, GROUP 2, JULY 2009
9. CONCLUSION
In this case, we deal with two different types of strategic matters: a series of organizational problems as
well as an organizational objective desired by the Board.
With regards to the plentiful organizational problems of the Rogers’, first and foremost, CEO should
address these problems by implementing integrated production planning and operation control systems to
gain a proper control over the business.
While projected growth rate for the premium chocolate industry is 20%, Rogers’ was not successful to
proportionately grow. Analysis shows that Rogers’ suffers from old fashion way of packaging that seems to
be one of the main causes of the firm’s slowdown. Also, there is a change in consumer’s preferences for
organic and healthier chocolate. Rogers’ can take advantage of this opportunity by introducing new
concepts of products and packaging in order to differentiate the firm from its rivals and to attract diverse
group of customers.
In addition, Rogers’ is confronting with “customers aging” issue. At the other hand, today people tend to
do everything Online! Therefore, expanding online selling system and e-marketing will help the firm to
capture a broader market as well as younger generation.
Rogers’ will be ready for expanding its retail sales system. Analysis and records prove that this is the
best strategy to take advantage of the growing market. It has been suggested to Rogers’ to divide its
retail expanding strategy into two steps:
• Expanding retail sales system within the region (Victoria and British Colombia), and then
• Expanding retail sales system to other parts of the country
As we have learned, there will be definitely some issues that may prevent of successfully implementing
any strategy. A table consists of detailed implementation plan for managing the potential problems has
been provided in page 7.
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Appendix 1. Quick Overview on Financial Performance of Rogers’ Chocolate (2005‐06)
This series of ratios reveal Rogers’ Chocolates ability to pay off its short‐
terms debts obligations. Although, having a current ratio over 1 is normally
Current Ratio 1.24 1.36
acceptable, however, current ratio would overestimate a company's short‐
term financial strength. Therefore, quick ratio that excludes inventories has
been calculated. It tells us that most part of the assumed liquidity of Rogers’
belongs to inventory. As we know, most of times it is difficult to turn Quick Ratio 0.57 0.46
inventories to cash.
ASSET MANAGEMENT RATIOS
Inventory
In order to measure how effectively Rogers’ is managing its assets, assets 7.73 7.67
Turnover
management ratios have been calculated. As can be seen, Rogers’ low
turnover implies poor sales and, therefore, excess inventory.
High inventory levels are unhealthy because they represent an investment
Total Assets
with a rate of return of zero. In addition, low asset turnover of Rogers’ shows 1.40 1.41
Turnover
inefficient using of assets in generating sales.
DEBT MANAGEMENT RATIOS
has much more assets than debt. Used in conjunction with other
measures of financial health, very low level of debt ratio can be translated
as the firm’s high degree of being risk adverse. In other words, it shows Debt to
78% 48%
the extent to which Rogers’ Chocolates uses debt financing or the firm’s Equity Ratio
ability to meet financial obligations
PROFITABILITY RATIOS Gross Profit
54.55% 55.15%
Analyzing Rogers’ profitability ratios revealed: Margin
• Sales has declined in 2006
• Profit Margin has declined in 2006
Net Profit
• Rogers’ has a very good gross profit margin, but suffers from very 8.9% 7.5%
Margin
high cost of operation
Appendix 2. Mission, Objectives, Strategies
HISTORY
Rogers' Chocolates is steeped in tradition and a rich history that has earned the company its current
reputation as one of Canada's premiere chocolate makers.
The first Rogers' chocolates were made in 1885 by Charles "Candy" Rogers in the back of his
grocery store in Victoria, B.C. He quickly became a popular man. In 1891, Rogers expanded his
chocolate operation to the company's current heritage storefront on Government Street in Victoria
and the rest, as they say, is history.
Today, Rogers' Chocolates is owned by a small group of shareholders located primarily in B.C.
The Victoria-based company now has 10 retail stores, several hundred wholesale outlets, and a
20,000-square-foot factory.
MISSION STATEMENT
Rogers' Chocolates is committed to producing and marketing fine products which reflect and
maintain our reputation of quality and excellence established for over a century. All aspects of our
business will be conducted with honesty and integrity, upholding our proud Canadian tradition.
PHILOSOPHY
Rogers' Chocolates honors its time-tested brand by:
STRATEGY
Reviewing the case and visiting the firm’s website reveal that Rogers’ strategy is to produce
premium quality chocolates which are handmade, hand packed and highly customizable. It seems
that Rogers’ is trying to differentiate itself from the rivals
APPENDIX 3. ROGERS’ CHOCOLATES SWOT ANALYSIS
Internal Factors External Factors
STRENGTHS OPPORTUNITIES
9
9
Premium Quality Products
Knowledgeable and Dedicated Management & Personnel
S 9 High Industry Growth Rate
O
9 Change in Consumer’s Preferences for Organic Chocolate
9 Loyal Customers in the Region
9 Public Demand for buying Products mostly from Social &
9 Superior Brand Image and Perception in Victoria
Environmental Responsible companies
9 First‐rate Internet Website
9 Expanding Online Sales
9 Several Key Retail Locations & Excellent In Store Experience
9 Expansion Outside the Region
9 Outstanding Market Leadership (Award Winning)
9 Olympics 2010
9 Innovative Customer and Employee Relations (Award Winning)
WEAKNESSES THREATS
'
'
No Measurement for Productivity & Efficiency
Weak Production Planning
W ' Economy Slowdown
T
' High Cost of Operation ' Entry of Giants such as Cadburys & Hershey’s to the Industry
' Poor Logistics, Weak Sales Network & Incapable Sales Reps ' Loyal Customers are Aging
' Old Fashion Packaging ' Public Health Consciousness & Threat of Shifting to Healthier
' Poor Inventory Management Substitutes
' Unknown Brand Outside the Region
' Limited Financial Resources & Poor Cash Flow Management
Bibliography
• Lai, Y. C. (Director) (2009, July 12). Case Analysis and Decision. Strategic Management
(MRB 3012), IBS, UTM City Campus, Kuala Lumpur.
• David, F. (1986). Fundamentals of Strategic Management. New York: Macmillan Pub Co.
• Gamble, J., J., A., Thompson, A., & Strickland, I. (2009). Crafting & Executing Strategy:
The Quest for Competitive Advantage: Concepts and Cases. Boston: Mcgraw-Hill College.