Analysis of Business Strategic-Planning Using SWOT Analysis Study Case of “Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate?”

 Analysis of Business Strategic-Planning Using SWOT Analysis 

Study Case of 

“Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate?”

Syndicate 9:

1. Chiesa Manoppo - 29121313

2. Faldi Irham Pratama - 29121158

3. Kun Rinaldi Pramana - 29121035

4. Reggy Aldynov Alamsyah - 29121074

5. Rifqi Tyaga Wisista - 29121292

Administration Business

Institut Teknologi Bandung

1. Case Background

Figure 1. Apollo and Monreaux New Product Plan

Apollo Foods from Los Angeles, California, is a global consumer packaged-foods powerhouse offering an unrivaled portfolio of brands, manufactured confectionery, even food products such as biscuits, snacks, beverages, cheese, convenient meals, as well as an array of packaged grocery items for distribution in 170 countries.

Apollo offers more than 70 new product innovations over the past three years. Apollo knew its customer very well and made it successfully feeding their hungry customers who wanted bold flavors and easy meal solutions.

From Figure 2.1. (Kotler, 2016) we can see that Apollo is already at the Business Planning stage and start doing Product Planning in collaboration with Nielson.

2. Strategic-Planning Montreaux Chocolate

The business unit strategic-planning process consists of the steps shown in Figure 2.4. (Kotler 2016)  We examine each step in the sections that follow (Due to limited resources and information we only analyze until Strategy formulation):

2.1. Business Mission

Each business unit needs to define its specific mission within the broader company mission (Kotler, 2016). It is not clear what the vision and mission of this company are, but from this case paper case we conclude that the mission of the Apollo Foods company are to become global consumer packaged-goods powerhouse, offered an unrivaled portfolio of brands, manufactured confectionery, biscuits, snacks, beverages, cheese, and convenient meals, as well as an array of packaged grocery items for distribution in many countries.

2.2. SWOT Analysis

The four key elements of SWOT analysis are - Strengths, Weaknesses, Opportunities & Threats. Chocolate Dark can use strengths to create niche positioning in the market, can strive to reduce & remove weaknesses so that it can better compete with competitors, look out to leverage opportunities provided by industry structure, regulations and other development in external environment, and finally make provisions and develop strategies to mitigate threats that can undermine the business model of Chocolate Dark.

2.2.1. STRENGTH

Strengths are the Chocolate Dark capabilities and resources that it can leverage to build a sustainable competitive advantage in the marketplace. Strengths come from positive aspects of five key resources & capabilities - human resources, past experiences and successes, activities & processes, financial resources, and physical resources such as land, building, and activities and processes

1. Superior product and service quality can help Chocolate Dark to further increase its market share as the current customers are extremely loyal to it. According to John A. Quelch, Diane Badame in Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? study – there is enough evidence that with such a high quality of products and services, Chocolate Dark can compete with other global players in the international market.

2. Bold Flavor. As stated from case paper, Apollo knew its consumers well and had been successfully feeding their hunger for bold flavors, easy meal solutions, 

3. Innovative Product branding and messaging, an healthy message 

4. First Mover Advantage – Chocolate Dark has first mover advantage in number of segments. It has experimented in various areas Competition, Customers, Forecasting, Market research, Product development.

5. Variative products enjoyed a number-two position in the global confectionery business, largely due to products other than chocolate, such as gum and candies, also "better-for-you" offerings with more than 70 new product innovations over the past three years.

6. Advanced support by Montreux Switzerland. They sent to their chocolate production expert U.S. and worked closely with Apollo personnel to develop Montreaux Chocolate USA products.

7. Superior market research tools by cooperating with nielsen BASES Marketing Consultant, that can provide a comprehensive marketing forecast.

2.2.2. WEAKNESS

Weaknesses are the areas, capabilities or skills in which Dark Chocolate lacks. It limits the ability of the firm to build a sustainable competitive advantage. Weaknesses come from lack or absence of five key resources & capabilities - past experiences and successes, financial resources, human resources, physical resources such as land, building, and activities & processes .

1. The Project Management Branding has always been too focused on the internal delivery instead of taking all the interests of the external stakeholders into account. This strategy may result in deteriorating the poor public relations and also client resentment. 

2. Implementation of Technology in Processes – Even though Chocolate Dark has integrated technology in the backend processes it is still not able to harness the power of technology in the front end processes.

Implementation of Technology in Processes - Despite the fact that Chocolate Dark has integrated technology into its backend procedures, it has not harnessed the power of technology in its front-end processes yet.

3. Inventory Management - According to the information offered in the Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? Case study, the answer is no. As a result of this case study, we can conclude that Chocolate Dark is inefficiently managing its inventory and cash flow. Inventory management, according to John A. Quelch and Diane Badame, has a lot of room for improvement.

4. Low Return on Investment - Even if Chocolate Dark's financial sheet is stable, one statistic that needs to be considered is "Return on Invested Capital." According to John A. Quelch and Diane Badame, in the areas of competition, customers, forecasting, market research, and product development that Chocolate Dark currently runs in, the most dependable measure of profitability is Return on Invested Capital, instead of financial analyst favorites like Return on Equity and Return on Assets.

5. Chocolate has a poor track record when it comes to environmental considerations. The government's track record on environmental problems is not promising. Customers are now considering environmental safeguards as an inherent element of doing business, according to John A. Quelch, Diane Badame. This can lead to consumer backlash, according to John A. Quelch, Diane Badame.

6. Lack of diversity in the workforce - I think Chocolate Dark's workforce is too homogeneous, considering that the majority of its growth has occurred in the domestic market. According to John A. Quelch and Diane Badame, this could damage Chocolate Dark's chances of international growth.

2.2.3. OPPORTUNITIES

Opportunities are macro environment factors and developments that Chocolate Dark can leverage either to consolidate existing market position or use them for further expansion. Opportunities can emerge from various factors such as - economic growth, changes in consumer preferences, political developments & policy changes, technological innovations, and increase in consumer disposable income .

Figure 2. Opportunities Analysis Matrix Example

1. Chocolate is the most lucrative segment of the global confectionery market, accounting for 52.6% of the market's total value

2. Europe captured the largest regional share of the global confectionery market at 45.Z0/0, with the Americas following at 33.9%.'

3. Revenue Growth; The U.S. confectionery market reported total revenues of $35.648 billion in 2011, representing an annual compound growth rate of 2.8% between 2007 and 2011. Total revenue for the chocolate segment in 2011 was $17.664 billion, a 1.9% increase over 2010. The U.S. chocolate market was expected to grow almost 2% annually through 2015.2

Table 1. Growth Rates Chocolate USA

4. Consumers' focus on fitness and health in the U.S., which sharpened over the past three decades, As the emphasis on healthy eating habits heightened, however, so had the number of competitors and the rate of new product introduction.

5. The chocolate market in the U.S. is composed of seven product segments, with the top four accounting for 94.4% of market value: 

• 1. Bar/bag/box (3.5 oz.+): $7,149 million, with 7.6% growth between 2009 and 2011 

• 2. Seasonal chocolate: $4,407 million, with 9.9% growth

•  3. Bar/bag/box (less than or equal to 3.5 02.): $3,479 million, with 18.5% growth 

• 4. Snack-size chocolate (less than or equal to 0.6 02.): $2,522 million, with 10.8% growth 

6.  Premium chocolate products moving to mainstream channels (i.e., supermarkets, mass merchandisers) 

7. Dark chocolate sales benefiting from flavonoids-antioxidants that can help to lower cholesterol and provide cardiovascular benefits 

8. Low-calorie options such as reduced fat and aerated chocolate 

9. Packaging going to stand-up pouches and bigger sizes that appeal to economically conscious consumers 

10. New labeling with terminology emphasizing shareability, portion control, and saving a piece for later 

11. Increases in pricing attributable to rising commodity costs 

2.2.4. THREAT

Threats are macro environment factors and developments that can derail the business model of Chocolate Dark. Threats can emerge from various factors such as - changes in consumer preferences, increase in consumer disposable income, political developments & policy changes, technological innovations, and economic growth .

Figure 2. Threat Analysis Matrix Example

1. Growth number of competitors and the rate of new product introduction.

2. dark chocolate with fruit concept and was likely not far from an introduction.

3. The competitors in the chocolate industry could come from both locally and internationally since the chocolate industry can use a low cost consumer acquiring tools such as e-commerce and social media.

4. International trade friction on US trade with China increases costs - both labor costs and other costs.

5. The organization could not increase the price of premium product dark chocolate because the sticky prices cutler still happened in the industry

6. Government regulations and bureaucracy that are experiencing disruption from several groups protesting the regulations governing the work environment and employee safety.

2.3. Goal Formulation

Once the company has performed a SWOT analysis, it can proceed to goal formulation, developing specific goals  for the planning period. Goals are objectives that are specific with respect to magnitude and time (Kotler, 2016).

As stated at paper case “Apollo delegated management of the arrangement to the CFG, which formed a new division, Montreaux Chocolate USA, to operate the business” and their goals are:

1. National distribution of the new Montreaux product line (referring to the degree to which a given product is available for purchase or the percentage of stores carrying a given product) 

2. $115 million in annual sales 

3. Be in the top 25 in revenue (0.60% market share; see Exhibit 1 for volume projections)

2.4. Strategy Formulation

The TOWS matrix serves as a conceptual framework for future research about the combination of external factors and those internal to the enterprise, and the strategies based on these variables (Weihrich, H. 1982). 

(1) WT Strategy. In general, the aim of the WT strategy is to minimize both weaknesses and threats. 

(2) WO Strategy. The second strategy attempts to minimize the weaknesses and to maximize the opportunities. 

(3) ST Strategy. This strategy is based on the strengths of the organization that can deal with threats in the environment. 

(4) SO Strategy. Any company would like to be in a position where it can maximize both strengths and opportunities. 

Table 2. TOWS Matrix Anaysis

TOWS Matrix	Opportunities	Threats
Strengths	Strength Opportunities (SO) Strategies; Using Dark Chocolate strengths to consolidate and expand the market position.	Strength Threats (ST) Strategies; Dark Chocolate can use two approaches - building on present strengths, or analyze the trend and build processes to two pronged market penetration approaches.
Weaknesses	Weakness Opportunities (WO) Strategies; Building strategies based on consumer oriented product development and marketing approach.	Weaknesses Threats (WT) Strategies; Dark Chocolate should just get out of these business areas and focus on strength and threats box , or on weakness and opportunities box.

 

References

Kotler, Philip, Keller, Kevin Lane. (2016). Marketing management 15th ed. (15th). Harlow: .

Quelch, John, A., Badame Diane. (2013). Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate?. Harvard Business School.

Weihrich, H. (1982). The TOWS matrix—A tool for situational analysis. Long Range Planning, 15(2), 54–66. doi:10.1016/0024-6301(82)90120-0