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CASE STUDY 1
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Case Study 1:
Rogers’ Chocolates
Group 3
Smith, David
Rivera-Costa, Carlos
Liberty University
June 7, 2015
Executive Summary
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Roger’s Chocolates is a manufacturer of premium chocolates located in Victoria, British
Columbia (current location) and has been privately held as a family owned-operated business.
Rogers’ Chocolate concentrations on providing premium chocolate market and differentiates
from other brands by offering quality chocolate products for a reasonable price, creating value
for the stakeholders. The company is one of Canada’s oldest and recognizable chocolate
producers. Larry Sullivan is the chief executive officer (CEO) since 2013 and he shares the
ownership of the privately held company with five members on the board of trustees.
Rogers’ Chocolates brand awareness is low outside of Canada compared to more popular
brands like Godiva and Lindt. The premium chocolates industry is highly competitive, but small
throughout the world. The company’s strongest competitors are Godiva, Lindt, Bernard
Callbeut, and Purdy. The threat of new entrants for companies striving to enter the market is low
due to the large capital investment and large manufacturing facility required. Rogers’ Chocolates
buyers and suppliers have high bargaining power over the company.
The appendices provides an in-depth analysis Rogers’ Chocolates performance. The
premium chocolate market has grown consistently at 20 percent which suggests the rivalry
among competitors are low. Rogers’ Chocolates is not growing when the market is constant and
they need to generate more revenue for the stakeholders. This paper will suggest a strategy
concentrated on expanding the brand, establishing a global presence, and gain a competitive
advantage over the rest of the industry.
TABLE OF CONTENTS
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Case Study 1
Rogers’ Chocolate
Organizational Setting
Rogers’ Chocolates was founded by Charles “Candy” Rogers in 1885 and based in
Victoria, British Columbia (Rogers’ Chocolates history). The firm is one of Canada’s oldest
chocolate companies. After the death of Mr. Rogers, his ran the company until she sold it in the
1920s. The company has been sold three times since then. The company has grown sales over
the last couple of decades by more than 900 percent. Rogers’ Chocolates is privately owned by
four gentlemen and a Vancouver based investment firm. This group also serves as the board of
directors. Today, the business consist of a 20,000 square-foot factory, nine retail stores, a mail
order and online method that is capable of shipping products to over 50 countries, and several
hundred wholesale outlets (Rogers’ Chocolates history).
Rogers’ Chocolates competes in the confections industry in Canada. They are known for
their high quality chocolates. Their products have no additives and they purchase only high
quality ingredients. The brand is highly respected in Victoria and have loyal customers. This
attention to detail is the reason they have increased sales to over 900 percent in the last ten years.
Rogers’ Chocolates is continuing to grow their customer base by appealing to health conscience
consumers by excluding hydrogenated fats and oils, replacing them with healthier ingredients.
The chocolate industry is on the decline, however, Rogers’ has experienced a slight increase due
to the acquisition of Sam’s Deli. The major of chocolate sales occur around the Christmas
holidays.
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Mission Statement
Rogers’ Chocolates mission is focused making and selling fine products that maintains
the reputation of quality while enhancing people’s lives by making memorable moments with
chocolates (Rogers’ Chocolates history). This strategy reflects Rogers’ commitment to
producing and selling great products that upholds the company’s reputation of quality for over a
century. The mission statement is reinforced by the leadership and employees of Rogers’
Chocolates.
Objectives
Rogers’ Chocolates board of directors understood the company needed to grow in order
to be competitive in the market. Conversely, the current objectives have not been explored to
their full potential. The company focuses on four objectives: (1) Rogers’ Chocolates want to be
the premier name in the premium chocolate category, (2) Become recognized as the leading
creator, producer and brand seller of premium chocolates. (3) Be known for its brand quality,
hand crafted, elegantly wrapped, sophisticated products. (4) Expand Rogers’ brand to other
markets outside of Canada. These objectives begin when the company introduce only quality
products beginning with the procurement and combination of ingredients enhanced by
superiority customer service by their staff. The organization practices social responsibility by
eliminating harmful ingredients such as hydrogenated fats and oils and using natural ingredients
is the reason Rogers’ is one of the confections industry leaders. Their quality products are
beginning to appeal to the educated and health conscience consumers for the aesthetic, natural
ingredients, and great taste.
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Strategies
Rogers’ Chocolates will face many challenges as they grow and competitors refine their
strategies. They are a small company and do not have as many resources as their competitors.
Decision-making from the senior to lower-level management will be critical since there is small
margin of error. Rogers’ had four strategies they wanted to implement: (1) Expand the business
by opening additional stores and franchising the brand (2) They were planning their global reach
upon the 2010 Olympic Games being held in Vancouver. (3) Rogers’ wanted to change their
traditional image to appeal to a new clientele base (4) The strategy was to increase sales through
on-line orders and mail orders since only ten percent of all sales come these methods. Eighteen
percent of women and thirty percent of men shopped online in 2006. This appears to be a
differentiation approach by hand making, individually wrapping, and customizing the chocolate
for the customers’ needs.
New Mission Statement
Rogers’ Chocolates new mission statement is based on the proposed strategy presented in
this paper. Rogers Chocolates provides (1) consumers around the world with (2) premium,
quality, competitively priced chocolates (3) at retail locations, grocery stores, upscale restaurants,
and anywhere in the world through orders from Rogers’ Chocolates website. (4) By
implementing world class distribution and marketing strategies that will allow Rogers to be the
confectionary industry’s leader, (5) increasing revenue, creating future growth opportunities, and
providing successful outcomes for the stakeholders by satisfying customers’ demands around the
world. (6) In order to provide the customer with a quality product, (7) be socially responsible by
purchasing and mixing the best ingredients in our products while offering world class customer
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services in all aspects of the organization. (8) Rogers’ is committed to promoting a continuous
improvement culture that will reduce the waste throughout the organization. (9) Finally, the
company will challenge employees to be innovative in suggesting new products, processes, and
possible growth opportunities.
Existing Business Model
Rogers’ Chocolates is well recognized in Canada and British Colombia. The Rogers’
brand is recognized by its high quality, hand wrapped specialized products offered in a various
forms. The company’s value proposition is the premium chocolates they sell to customers via
retail stores, mail order or by ordering online. Rogers’ brings value to customers by using
healthier ingredients in their premium chocolates and adhering to their needs for healthier
products while allowing them to shop from anywhere in the world. The company is dedicated to
offering the customers exceptional customer service along with premium chocolates. The
premium chocolates Rogers’ supply to consumers can be enjoyed by any gender, race, or
demographic. Rogers’ Chocolates relies on the quality of their products and the reputation of the
brand is the key to current and future success. The company can use their brand recognition and
reputation to expand in new areas of Victoria and British Colombia.
Rogers’ Chocolates key resources include physical and intellectual property. The
company has a 24,000 square foot manufacturing facility where they produce all of the products.
Rogers’ have the ability to mass-produce certain items, making it convenient to keep retail stores
stocked with products. The company own the equipment in the manufacturing facility. Although
it is old, it could be used for an additional production line for specialty products once Rogers’
decide to replace it. This would allow the company to expand the operations to other territories
and continue to keep up with the demand. Rogers’ Chocolates also own retail stores throughout
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Victoria and British Colombia. These retail stores allows Rogers’ customers to easily access
their products by visiting or ordering it through mail or electronically. Additional retail locations
will allow Rogers’ to expand into new countries. Additionally, intellectual property such
trademarks, trade names, and patents are key resources. The intellectual property is important
for marketing the brand and generating brand awareness. It is also important because if the
company ever wanted to franchise, it would require confidence from the store owners that the
brand is protected and profitable.
Matrices Analysis
SWOT Analysis
Rogers’ Chocolates has been one of Victoria and British Colombia’s premier chocolate
manufactures for a century. As time progress, the firm is challenged with the type of methods
they should implement to continue to appeal to future generations as time goes on and cultural
shifts in society. Rogers’ does have strengths, however, they have just as many weaknesses that
could make the company close their doors. They must find solutions to their challenges and
compound upon their strengths or lose their competitive advantage as one of the premium
chocolate industry’s leaders.
Strengths. Rogers’ Chocolates has three main strengths and various others. Those
strengths are: market, loyalty and repeat customers, and quality and tradition (Berthianume et al.,
2009; Thompson et al., 2008). The first strength is the market in which the premium chocolate
segment has an annual growth rate of 20%. The increase in this particular segment is great
because this is area Rogers’ is targeting (Thompson et al., 2008). The second strength is loyalty
and repeat customers because once they try the products, they have experienced what Rogers’
have to offer. These characteristics are also qualified in the sub-segment of corporate gift
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(Berthiaume et al., 2009; Thompson et al., 2008). The third strength is the quality and tradition
Rogers’ control by determining which raw materials to purchase. Additionally, majority of the
chocolates are hand crafted, wrapped, and assorted in fine tins (Berthiaume et al., 2009;
Thompson et al., 2008). Additional strengths consist of human resources, social involvement,
strong financials, and recognition and diversification in which all of these contribute to the
success of Rogers’ Chocolates.
Weaknesses. The company has done an excellent job using their strengths to sell more
products, the weaknesses are evident. Rogers’ has four weaknesses: lack of a dynamic
environment, market, passive strategy, and technology. Rogers’ employees love their jobs within
the company and are passionate about what they do. Conversely, this causes the employees to
resent changes within the organization (Thompson et al., 2008). Rogers’ rely on the tourism to
since sales has been declining since 2001due to the 9/11 and the decline of the American dollar.
The firm now focuses their attention on western Canada allowing national brands a competitive
advantage (Berthiaume et al., 2009; Parkhill, 2010; Thompson et al., 2008). The third weakness
Rogers’ is experiencing is using a passive strategy by a “wait and see” approach, allowing the
competence to take the initiative (Thompson et al., 2008). The final weakness is technology
because Rogers’ has been using the same manufacturing equipment for years even though there
is newer technology available to reduce production cycles. The old equipment could shut the
production down if parts cannot be found to replace broken ones. Other weaknesses include
limited manufacturing capacity, locations, wholesale network, market coverage, long-term debt,
human resources utilization deficiencies, poor social media relations, and factory operation
efficiency (Berthiaume et al., 2009; Parkhill, 2010; Thompson et al., 2008).
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Opportunities. There are three opportunities Rogers’ can take advantage of now to grow
the business: new product development, web sales, and franchising. As the new generations
evolve, Rogers’ must develop new products that will appeal to them. The natural, sugarless
products that the company purchase for their premium chocolates will allow them to reach those
consumers (Parkhill, 2010; Thompson et al., 2008). Web sales is another avenue Rogers’ can
expound on by using social media to reach younger generations that may not be familiar with
their products. This will allow the company to expand exponentially with little effort or
resources. The last opportunity the company can explore is franchising. Rogers’ can allow
individuals to buy into the franchise and they can sell Rogers’ premium chocolates. This is
would be ideal as an addition on another store, allowing brand awareness to occur while they
generate revenue.
Threats. Rogers’ Chocolates has three threats that exposes the company. They are
macro-conditions, redefining the word chocolate, and competition. Macro-conditions such as
global recession due to the currency war, the decline of the American dollar, and the lack of
tourism in Canada could affect the company’s profits (Parkhill, 2010; Thompson et al., 2008).
Another threat occurred when the European Union redefining the word chocolate, allowing low
quality products to receive this title (Berthiaume et al., 2009; Thompson et al., 2008; Wielaard,
2010). The last threat is competition in which companies like Godiva, Cadbury, and Hershey
with low quality chocolates are penetrating the Canadian market. This could take away some of
Rogers’ share of the market with customers settling for less expensive chocolates.
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SWOT Bivariate Strategies
Rogers’ Chocolates has many strengths that can be leveraged in order to ensure the
company keeps their competitive edge, but growing should be second to saving the company
from current threats. While the organization should seek to grow revenue and profits, the
management team should first try and appeal to their established customer base. The
organization must improve current weaknesses and focus their strengths on battling current
threats. These strategies are noted in Appendix C.
Opportunity strategies. Rogers’ should always be focused on helping the company
grow, however, the current situation they are presented with must be addressed. The
organization’s strengths can help them regain control if they are properly leveraged against the
opportunities presented to the organization. The organization should use their human resources
to focus on new product development. This is a tricky process because research and
development for cost money to conduct, however, the reward is much greater. In order to reach
new age groups, it is definitely worth for the company to invest in research and development.
Rogers’ weaknesses must be addressed also despite the many opportunities possess in the
product development area. Product development will allow Rogers’ to promote and market new
chocolate products. Children love chocolate, but the packaging does not appeal to them.
Rogers’ should create new products to will appeal to all age groups.
Threat strategies. Rogers’ is facing more and stronger threats than the firm has ever
faced. The organization should react rapidly to these threats before they grow to the point of no
return. First, the company should insure that their loyal customers are not considering other
brands like Godiva and Lindt as replacements. Although every company that sell chocolate is
not a threat, the large companies like Godiva and Lindt have the necessary resources to be a
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threat. For this reason, Rogers’ should establish new locations around British Colombia and
Canada to ensure those territories are still their mainstay while displaying growth.
The company can protect their weaknesses from oncoming threats by addressing them
now. Rogers’ can be more proactive in their approach to create new products and eliminate
inefficiencies in their manufacturing process, generating more profit. These are areas the
company can see success relatively quick due to their reputation and cutting cost. This would
bring Rogers’ closer to the competition regarding revenue.
Porter’s Five Forces
Bargaining Power of Suppliers
The bargaining power of suppliers can effect Rogers’ profitability by increasing prices or
by providing the firm with low quality ingredients. The raw materials necessary to produce
premium chocolates are cocoa bean, secondary sugar, and milk.
The suppliers of the chocolate industry possess the bargaining power because there are
limited suppliers of the raw materials. The producers of these products can increase the price if
there is no competition for the ingredient. A great example of this is the cocoa bean which is
required in chocolate. The absence competition and substitute products increases the bargaining
power of the suppliers.
Bargaining Power of Buyers
Rogers’ Chocolates has bargaining power over the buyer. They have a unique selling
point in that they provide premium, custom chocolates that the customer cannot purchase
anywhere else. This is considered product differentiation. Undifferentiated products allow the
bargaining power to be with the buyers because they can purchase the products from other
vendors, possibly for a cheaper price. Rogers’ reputation and quality products make it difficult
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for their loyal customers to find that experience with other competitors. Another bargaining
point for Rogers’ is people are becoming more health conscience and they provide organic and
dark chocolate to those consumers.
Threat From Substitutes
Premium chocolates can be substituted with traditional chocolate or other sugar covered
products like sugar covered nuts. Other snack foods such as muffins, snack cakes, and donuts
can be used to suppress a customer’s sweet tooth. The confectionary industry must compete with
various substitute products. Snacks that are non-chocolate such as ice cream, yogurt, fruit,
granola bars can be substituted for chocolate.
There are many substitutes for customers to choose from that make the threat of
substituting chocolate for other snacks. Rogers’s chocolate is purchased for special occasions
like Christmas, Valentine’s Day, Easter, anniversaries, and birthdays. Alternative gifts for these
seasons are considered substitutes products.
The possibility of substitute products for seasonal gifts is relatively low to moderate.
Conversely, Rogers Chocolates must be able to sustain its reputation in their current locations
Victoria and British Colombia then the threat for Rogers can be minimized.
Intensity of Rivalry
The intensity of rivalry among competitors can produce price wars, advertising battles,
new product lines, and higher quality of customer service. Premium chocolate market consist of
large brands like Godiva and Lindt. Since the market is only growing at 20% annually, this
indicates that the rivalry is not intense among competitors. Premium chocolates have a shelf life
of 6-months so there is no rush to sell the products for a cheaper price. Competitors in the
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premium chocolates industry usually has product differentiation creating loyal customers,
decreasing rivalry.
Another factor for the decline of rivalry among competitors was the global recession in 2008.
This affected the American dollar and economy, reducing tourism to Canada. The premium
chocolates industry relied on American tourist to buy premium chocolates. Once tourism
increase in Canada, the rivalry will began.
Additional, the United States Food Drug Administration (USFDA) refined “chocolate”
allowing manufacturers categorize their as such. The industry is dominated by international
companies making it difficult for new firms to enter. Companies such as Nestlé’s, Hershey’s,
and Cadburys entered the premium chocolate market by acquisitions because the market still has
high growth potential.
Competitor Rivalry
The competitor rivalry is low between premium chocolate producers. The premium
chocolate segment has an annual growth rate of 20% which indicates there is no rivalry present
at this time. Rogers’ Chocolates is in competition with other organizations that sell premium
chocolates. However, their competitors have a foot print in the international market which they
Threats of New Entrants
The threat of new entry into the premium chocolate market is poses a low risk. A new
company venturing into the premium chocolates industry requires a large capital investment for
branding and production facilities. The new entrants that have ventured into the industry noticed
the growth and they have the financial and capital resources. Brand and quality is important to
customers and can be viewed as barriers for new companies entering the premium chocolate
market.
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do not. Rogers’ brand is strong in Canada, however, they are not as profitable as their
competitors around the world.
Competitive Profile Analysis
When compared to Godiva and Lindt, Rogers’ Chocolates out performs them in many
categories. As noted in Appendix E, the organizations rates in at a 27.60 on the CPM. The
above average score originates primarily from Rogers’ ability to produce a quality product,
provide excellent customer service, and their strong financial position. The problems are Godiva
and Lindt are in markets Rogers’ is not and their brands are well-known in many countries.
Although these organizations may not offer the quality Rogers’ does, they offer a product that
satisfy the customers within the markets they serve. Considering these facts, Godiva and Lindt
rates are not far behind Rogers’ at 24.90 respectively. Rogers’ considers these two companies
major competitors in the premium chocolates market, those two companies do not view Rogers’
in the same manner. These companies are able to advertise more, enter global markets, and sell
products due to the various venues at their disposal. For this reason, Rogers’ Chocolates is
considered a second-tier chocolatier compared to Godiva and Lindt.
Product Life Cycle
Rogers’ Chocolates “wait and see” tactic in introducing new products displays their
conservative approach. However, Rogers’ Chocolates products have a long life-cycle. The
original recipe created by Charles Rogers is still in use after 125 years. New products focus in
packaging, dark chocolates, new flavors, seasonal products, as well as adapting the products to
social trends. Maintaining the quality and reputation of the products and brand is the most
important concept. Thus, the introduction period could be important when they could affect the
quality or quality perception. The growth period is significantly long for most of the chocolate
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based products, but relatively short for the packaging, which should be reviewed between one to
five years (Berthiaume et al., 2009; Parkhill, 2010; Thompson et al., 2008).
BCG Analysis
Rogers’ Chocolates currently has a steady “business as usual” approach at this point. As
seen in Appendix D, British Colombia and Canada is a cash cow for Rogers’, while the
international market is a question mark. All of Rogers’ Chocolates revenues are generated within
British Colombia and Canada, while none is generated internationally. The company is in the
cash cow range instead of the star range because of uncertainty of Rogers’ taking advantage of
their growth opportunities. Rogers’ revenue and profits are generated in British Colombia and
Canada because of brand recognition along with customer loyalty. The international market for
Rogers’ is a question mark because they brand is unknown in other countries. If the market in
British Colombia and Canada decline, Rogers’ would lose revenue.
The domestic market show no growth for Rogers’ and is on the lower quadrant of the
BCG. However, the international market has promising growth, but Rogers’ must expand their
brand awareness to benefit. With more competition entering British Colombia and Canada, the
Rogers’ could experience a decline in sales in their backyard. Conversely, Rogers’ product
lifecycle is not declining.
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References
Berthiaume, N., Dalziel, S., Gibb, C., Hewlett, A., Pettipiece, M., & Vadori, C. (2009). Rogers'
Chocolates - Advertising Campaign. Retrieved June 5, 2015 from Celia Gibb:
www.celiagibb.com/files/Download/Rogers.pdf
Rogers'Chocolates (2015). About Us. Retrieved June 4, 2015 from Rogers' Chocolates:
http://www.rogerschocolates.com/history.php
Thompson, A., Strickland, A., & Gamble, J. (2008). Crafting and Executing Strategy (17th
Edition pp. C-177 - C-192). Ontario: McGraw-Hill Irwin.
Wielaard, R. (2010). EU court: No such thing as 'pure chocolate' . Retrieved June 5, 2015 from
The Seatle Times:
http://seattletimes.nwsource.com/html/businesstechnology/2013518616_apeueuitaliancho
colate.html
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Appendix A
SWOT Analysis Matrix
Strengths
Weaknesses
Internal
1. Brand recognition in British Colombia and
Canada
2. Quality and Tradition
3. Loyal and Repeat Customers
4. Market in British Colombia and Canada
5. Customer Service
1. Market
2. Passive Strategy
3. Lack of Dynamic Environment
4. Lack of Productivity or Efficiency
Measures
5. High Cost of Operations
Opportunities
Threats
External
1. New Product Development
2. Web Sales
3. Franchising
4. 2010 Olympics
5. Growth in European and Asian Markets
1. Poor Micro-conditions
2. Redefining the word Chocolate
3. Competition
4. Health Concerns
5. Substitutes for Chocolate
Appendix B
IFE/EFE Matrices
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
1.
2.
3.
4.
5.
6.
7.
Internal Factor Evaluation Matrix (IFE)
Strengths
Weight Rating Weighted Score
0.70
3
2.10
1.00
4
4.00
1.00
4
4.00
0.80
4
3.20
0.60
3
1.80
0.90
4
3.60
0.60
4
2.40
0.50
3
1.50
0.80
4
3.20
0.40
3
1.20
0.30
2
0.60
0.80
1
0.80
0.80
2
1.60
1.00
1
1.00
0.70
1
0.70
0.20
2
0.40
0.90
1
0.90
Weaknesses
Weight
Weighted
Rating Score
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8.
9.
10.
0.60
0.30
1.00
1
2
1
0.60
0.60
1.00
TOTALS
Major Weakness (1), Minor Weakness (2), Minor Strength
(3), Major Strength (4)
13.90
35.20
External Factor Evaluation Matrix (EFE)
Opportunities
Weight
Rating
Weighted Score
1.
1.00
1
1.00
2.
1.00
2
2.00
3.
0.30
1
0.30
4.
0.05
1
0.05
5.
0.60
2
1.20
6.
0.01
1
0.01
7.
0.30
2
0.60
8.
0.15
4
0.60
9.
0.50
1
0.50
10.
0.02
1
0.02
Threats
Weight
Rating
Weighted Score
1.
1.00
2
2.00
2.
1.00
2
2.00
3.
0.70
1
0.70
4.
0.30
4
1.20
5.
0.50
1
0.50
6.
0.40
4
1.60
7.
0.10
1
0.10
8.
0.01
3
0.03
9.
0.30
2
0.60
10.
0.16
3
0.48
TOTALS
8.40
15.49
Poor (1), Below Average (2), Average (3), Superior (4)
Appendix C
SWOT Bivariate Matrix
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Appendix D
BCG Matrix
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Profits
Domestic
International
Revenues
891082
0
Profits
500
800
Appendix E
Competitive Profile Matrix
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Competitive Profile Matrix (CPM)
Rogers'
Godiva
Lindt
Critical Success Factors
Weigh
t
Ratin
g
Scor
e
Ratin
g
Scor
e
Ratin
g
Score
Advertising
1.00
1
1.00
4
4.00
4
4.00
Market Penetration
0.40
2
0.80
3
1.20
3
1.20
Customer Service
1.00
4
4.00
1
1.00
1
1.00
Store Locations
0.30
2
0.60
3
0.90
3
0.90
R&D
0.70
3
2.10
3
2.10
3
2.10
Employee Dedication
0.80
4
3.20
2
1.60
2
1.60
Financial Profit
1.00
4
4.00
4
4.00
4
4.00
Customer Loyalty
1.00
4
4.00
2
2.00
2
2.00
Market Share
0.60
1
0.60
3
1.80
2
1.20
Product Quality
1.00
4
4.00
3
3.00
3
3.00
Top Management
0.80
3
2.40
3
2.40
3
2.40
Price Competitiveness
0.30
3
0.90
3
0.90
3
0.90
Totals
8.90
27.6
24.9
24.30
0
0
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