Mast Brothers Chocolate: A Sweet Success Amid Recession & Tax Hike - Essay Sample

As much as the choice of natural chocolate products was a great move, some people would find the organic chocolate uninspiring.

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Recession

Possible increase in taxes

Strengths

Shoreditch was an industrial cluster area, which meant a cluster of customers for Mast brothers chocolate

Shoreditch Street and Brick and lane market had traffic from cafes and restaurants that would buy chocolates from Mast brothers and offer them to the customers.

Its location on Redchurch Street, between Shoreditch high street and Brick Lane market, made it accessible to more consumers since the roads were catchment areas, especially during the weekends.

There were no industries producing chocolate by the time Mast brothers ventured in Shoreditch.

Weaknesses

The average cost of Mast bother's chocolates was $11, which was quite costly at the time.

Mast brothers were organic, which meant the acquisition of the natural raw material (cocoa).

Redchurch Street mainly attracted fashion and aesthetic consumers, which limited Mast Brothers consumers.

The decision to venture into organic chocolates could be threatened by substitutes or similar products from other businesses since they could be easily copied.

Opportunities

Diverse migrant cultures in Shoreditch created an opportunity for Mast brothers to expand their product range to include flavors that fit each culture.

The existence of a retail cluster in Shoreditch would connect Mast Brother to other retailers.

The technological advancement in the area promised venture into the automatic production of chocolate.

Since the business in organic production was doing well, Mast brothers had an opportunity to venture into more organic production.

Threats

Shoreditch was an advancing town, and more chocolate businesses would emerge in the region to create stiff competition for Mast Brothers chocolate.

Not everybody loves organic food; hence the market size was not predictable.

The company emerged in 2008 at the time of the global recession.

Shoreditch was an upcoming retail cluster, and as more business emerged, the government could increase its taxes to control the number and nature of businesses that appeared in the region.

How Entrepreneurial Were the Mast Brothers

Mast brothers were able to identify the market gap and pursue the presented opportunity. Shoreditch was a growing market, but the existing businesses did not offer chocolate or its substitute. According to Howard Stevenson's and Peter Drucker's opportunity-based entrepreneurial theory, entrepreneurs do not create change in the market but rather exploit the opportunities that change consumer preferences, consumption, and technology, among others (Simpeh, 2011). Drucker ascertains that an entrepreneur seeks to improve and takes advantage of it. Mast brothers identified chocolate consumption as that change and responded by exploiting it as an opportunity (Simpeh, 2011). Their Shoreditch business filled the existing gap in the market, offering people organic chocolates for basic consumption at the workplaces and during special events, a product that no other business had ventured into during that time.

Blue Ocean Strategy Canvas

The Blue Ocean Strategy Canvas is a tool that shows how key players in a market compete, including the factors they compete on and the competition scores earned by the company on every essential element. The strategy canvas indicates the profiles of the major competing players in the market and what they offer to their buyers. The canvas helps businesses to visualize how they can break away from the reality of a red ocean using blue ocean strategic moves. Basically, the blue ocean strategy canvas creates a baseline for adjustments and transformation in the business. It helps entrepreneurs to change their focus to alternatives and noncustomers in the industry to keep ahead of their competitors. Below is a blue ocean strategy canvas of Mast Brothers in comparison to one of its competitors.

The key factors that determine the decision of the customers to purchase chocolate include the price and capacity of the chocolate, marketing, health benefits brand name, and distribution areas. The ability of the company to maintain high scores on the factors attracts more customers for their chocolates. Customer loyalty also determines the strength of the company to manage its sales. Based on the graph, there is no clear blue ocean for Mast Brothers. Their strategies are not sufficient enough to sustain high performance; hence they need to seize more opportunities to grow their profits.

Advantages of Locating In the High Tech and Upcoming Retail Cluster

Locating in the high tech and upcoming retail cluster had numerous advantages for the Mast Brothers. For instance, most businesses were located in Shoreditch, which attracted more people on its streets, thus creating foot traffic. On regular occasions, people always purchase the locally available and affordable consumable products while strolling on the streets or during their normal business. Therefore, the foot traffic was beneficial for Mast Brothers as it meant more customers for their $7 or $11 chocolates. Increased foot traffic meant impulse buying for Mast Brother's chocolates.

Furthermore, locating an upcoming retail cluster created a one-stop convenience for customers. As people purchased household or other commodities in the retail cluster, they also conveniently purchase Mast brother's chocolates. The retail cluster also ensured proximity to retailers and distributors that bought and sold Mast Brother's chocolates, which cut down transportation costs. The high-tech Shoreditch region also provided brothers with an opportunity to provide high-quality customer service and minimize losses on the employment of staff as the business could operate with few employees. The presence of high tech machinery meant more natural production of chocolates.

Family Businesses

Family-owned businesses refer to businesses whose control or ownership lies within two or more members of a family (Machek & Votavova, 2015). The majority of the big corporations across the world are family businesses. According to the reports by the U.S Bureau of the Census, approximately 90% of the businesses in America are family-owned. The family businesses make a significant contribution to the country's Gross Domestic Product and the global economy as a whole (Mandl, 2008). They are among the most prevalent and longest-lived business institutions around the world. According to the study conducted by the European Family Business, approximately 70 to 80 percent of the global Gross Domestic Product originates from family businesses. The businesses have also been a good source of employment in most countries, contributing about 50% of the jobs in most of the nations worldwide (Mandl, 2008). While family businesses are a good option for the unemployed population across the globe, not everyone is capable of running the businesses as it is only those with the excellent skills, competences, and knowledge that manage to establish and run their businesses. Not all family businesses flourish and last for lifetimes because it takes entrepreneurial skills and the ability to cope with the uncertainties of the environment to remain in operation (Machek & Votavova, 2015). Nevertheless, family businesses depict both advantages and disadvantages whose study and analysis are essential to young entrepreneurs wishing to start their own businesses to help them make sound decisions on the nature of enterprises to consider.

The most significant advantage of family businesses is their stability (Ramadani & Hoy, 2015). Unlike the normal business entities that are short term oriented, the family determines who takes over the business, which results in the longevity of their operation (Ramadani & Hoy, 2015). The succession of family-owned businesses enables them to focus on their stability in the market and thus their durability. Even in times of crisis, family businesses keep operating, which acts as a pillow that the other non-family owned businesses lack. For instance, according to the survey conducted by Ernest and Young on 280 family businesses in 33 different nations in the U.S. and Europe, family businesses reported a growth of between 5 and 15% during the times of economic crisis (Muriithi, 2017). Family businesses take a succession management approach that keeps them focused on the long term goals compared to the non-family businesses that operate on short visions. The most extended operating business in history is a Japanese hotel, Hoshi Ryokan, that has been in operation since 718 and 46 generations old (Vistage, 2014). Among the well-known family-owned corporations across the world that have been in operation for decades include Walmart that was ventured in 1950, Toyota that began in 1933, and Samsung that has been in business since 1938, among others (Muriithi, 2017). However, non-family owned businesses tend to collapse within a shorter period due to crises arising from the management of the corporations that result in their failure. Large corporations such as Nokia, blockbuster, Compaq, and Pets[dot]com failed after running for barely two centuries.

Members of family-owned businesses understand that the financial needs of a family are at stake; therefore, the top leaders tend to create a sense of accountability, loyalty, and commitment in their businesses (Ramadani & Hoy, 2015). Both family members and non-family employees uphold long term commitment steered by their top leaders owning the business, which contributes to the success of family-owned businesses. Unlike in non-family owned businesses, family members will always remain loyal in business and protect their investment and secure their financial investment. They would do whatever it takes to ensure the prosperity of their enterprise, including sharing of vital information and know-how with the non-family employees to ensure they venture into constructive business activities that not only provide the growth of the business but also its longevity (Ramadani & Hoy, 2015). Venturing into a family firm means family members putting more time and effort to ensure the success of the businesses. With the support of a committed workforce, family businesses are more likely to thrive. The commitment of family-owned companies such as Ford Motor Company, Chrysaler, and Hoshi Ryokan has enabled them to stay afloat during the hardest times of economic crises and remain in operation over the years (Vistage, 2014).

Moreover, family members are more willing to take on tasks within the businesses that are outside their formal vocations to ensure the business succeeds (Keeling, 2015). The flexibility of family members in the operation of family-owned businesses not only minimizes costs on employing more workers but also ensures the smooth flow of activities in the business. Keeping fixed on the professional jobs as seen in non-family owned...