Cocoa delights viability report

ASSESSMENT 2

Introduction

Cocoa Delights is the first company in Australia to process more than 10 different types of cacao from several countries, selecting only the finest cacao beans available. With chocolate factories in the Yarra Valley wine region of Victoria we currently manufacture and distribute exclusive handmade, partly handmade and machine-made chocolate product.

Cocoa Delights with a significant retail presence in every Australian capital city, starting with 22 stores in the greater Melbourne area and growing to 100 stores Australia wide by 2016. Cocoa Delights have defunded and run the expansion program as a wholly-owned operation to franchise and take up the opinion of a point venture.

Cost

Cocoa Delights will try to capitalize on the social trend of consumers being more health conscious, by promoting the health benefits of dark chocolates and offer the largest range of dark chocolate varieties and products.

Cocoa Delight has the following approach to pricing, distribution, advertising and promotion and customer service.

• Cost of pricing: the product cost is 40% of the total retail price
• Cost of Distribution: Cocoa Delight chocolate products are distributed through a chain of retail stores which customers can access easily
• Cost of advertising and promotion: Targeted advertising on TV, Radio, the internet and in the press will form the foundation of Cocoa Delights’ advertising and promotion effort
• Cost of Customer service: Cocoa Delights’ philosophy is that every customer’s experience in a Cocoa Delights store must be special and rewarding as out chocolate

Benefit

Cocoa Delights seeks to fulfil the following benefits that are important to our customers

• Quality – highest quality Australian chocolate, using locally source sugar, fruit, nuts and dairy products and imported cacao
• Competitive pricing - because products are locally made they are competitively priced, relative to comparable high-end European confectionery
• Product choice – the Dark Decadence product range includes organic, dairy-free and low G.I. products
• Social responsibility – Cocoa Delights make fair trade and sustainable practices a key part of their marketing message

PEST

P: The Government is currently passing legislation that requires businesses to monitor and reduce their waste and energy use. Significant penalties are planned for businesses that do not comply with the new directive

E: Interest rates are rising in the short-term but expected to level out at sustainable levels for the coming three years. Disposable income has reduced due to rising interest rates, however, this shortfall is expected to be recovered in the long-term, with wage increase expected to outstrip inflation rates by 2%. Unemployment levels are also increasing and expected to climb steady to 6% in the coming years

S: Cocoa Delight will try to capitalize on the social trend of consumers being more health conscious, by promoting the health benefits of dark chocolates and offer the largest range of dark chocolate varieties and product

T: technological developments with the broadband rollout across Australia have been delayed, although the rollout is continuing and will be completed in the next three years. Internet retailing options are expanding, and most bricks and mortar retailers are taking advantage of this new technology

ECONOMICAL: DISPOSABLE income has reduced due to rising interest rates this shortfall expected to be recovered in the long term, with wages including expected to outstrip inflation rates by 2% unemployment levels are also increasing and expected to climb steadily to 6% in the coming year.

SOCIAL: cocoa delights company will try to capitalize on the social trends of consumers being more health conscious, by promoting the health benefits of dark chocolates and offer the largest range of dark chocolate verities and more products.

TECHNOLOGY: Technology developments with the broadband rollout across Australia have been delayed, although the rollout is continuing and will be completed in the next three years. Internet retailing options are expanding, and most retailers are taking advantage of this new technology.

Risk

Risk management strategy is an integrated business process that incorporates all of the Risk Management processes, activities, methodologies and policies adopted and carried out in an organization

• The franchising concept will result is fast growth and could achieve the 100 store target within three years. Franchisees bring their own capital and they provide a ready solution to the store manager shortage
• Introduction of greater legal issues, with each store operating on a separate legal agreement
• Current store managers are encouraged to run the store as if it were their own business
• Potentially greater conflict between local-minded business owners and the interests of a national brand
• Proven Melbourne stores provide easy marketing and acceptance the franchise sales
• Significant government laws protect franchisees, increasing the need for strict compliance by the organization
• Expansion would start in Sydney and move to a new city one profitability is reached Sydney
• Cocoa Delights and Haigh’s Chocolates are operating in different market segments within the same industry

Fit

The opportunity with organization goals and capabilities of Cocoa Delights. Trend for a gourmet chocolate is heading toward a more sophisticated and informed customer regards to:

• Item quality – preference for high-quality products is increasing, as customers are learning to appreciate qualitative differences
• Product choice – there is greater interest in products tailored to specific dietary requirements and customer preferences. Cocoa Delights will capitalize on the health benefit of dark chocolate and offer the largest range of dark chocolate varieties and product

Impact

• Disposable income has reduced due to rising interest rates
• Wage increases expected to outstrip inflation rates by 2%
• Unemployment levels are also increasing and expected to climb steadily to 6% in the coming years
• The lack of an equivalent financial reward does not inspire many managers to put in the hours required
• The customer may be a conflict of interest between 2 brands what is good for Haigh’s Chocolate and what is good for Cocoa Delights
• Association with a mass-produced product and brand could impact negatively on Cocoa Delights’ premier reputation for quality chocolate

After reviewing the Haigh’s chocolate proposal cocoa delight will get opportunities with organizational goals and capabilities. Using JOINT VENTURE option with the Haigh’s chocolate they can operate different market segment within same industries. A joint venture is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity.

Cocoa delights viability report

Cocoa delights Marketing objectives