Situational Analysis for the Cocoa Delights Organization

Introduction

Cocoa Delights currently operates 15 gourmet dark chocolate stores in Melbourne. It is known for its handmade dark chocolate creations. The firm has been performing well as a result of its creativity and innovation geared towards its products and services to customers. However, the firm's key strengths drawn from its partnerships. It can source the finest cocoa beans at favorable prices to consumers. Coupled with the creative input of the employees, Cocoa Delights can attain profits. However, government regulations have impacted the firm's current operations. There is a big push by governments for companies to reduce their carbon footprints. On the economic front, the company is operating in an environment of increased interest rate coupled with an increase in the rate of unemployment which could be restrictive to growth prospects. However, the consumer's appetite for chocolate has increased against this trend. There is an opportunity for growth after all; even though technological challenges exist such as the delayed rollout of the broadband technology.

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Identify legal and ethical requirements for the organization to address sustainability issues

The organization now operates under increased pressure from both the government and the consumers to embrace sustainability in its operations. Cocoa Delights had adopted a resource-intensive strategy that resulted in significant electricity costs. The firm will have to significantly cut its electricity costs to adhere to the legal and ethical concerns on waste management and energy conservation.

Describe the impact of the organizational strategic direction on current marketing activities

Cocoa Delights intends to become a national retail brand within the next 5 years. While at it, the firm intends to maintain its current brand image of offering high-quality products and services to consumers. The marketing activities will now have to focus on national reach which calls for a significant increase in marketing and PR budget. Marketing activities will have to be cost-effective as well, unlike the previous years.

Analyze current key products or services and major markets for SWOT

Cocoa Delight's value proposition entails the production of a wide range of unique, dark chocolate that is of high quality. It also excels in the provision of exceptional customer service. The firm's crucial strength lies in its ability to source the finest cocoa beans at favorable prices to consumers: the firm, in turn, acquires the needed margins and financial rewards. However, Cocoa Delights incurs high marketing and operational costs which have cut in on the profits. Nevertheless, there is potential for growth as the firm has a recognized and rated brand image with loyal customers. Regulatory and policy shifts have shifted the competitive landscape in favor of Australian-made products. The threats to the organization include delayed infrastructural development as well as a weakening economy due to rising rates of interest as well as unemployment.

Evaluate the effectiveness of previous marketing undertakings

The previous marketing initiatives fell short of the company's strategic plan and market projections. While the firm attained its store and sales growth targets, it registered lower-than-anticipated gross profit margins of 46% against a projected average gross profit of 63%. Significant resources were channeled towards radio advertising which proved not be cost-effective despite achieving sales targets. However, PR initiatives proved to be particularly effective. For Cocoa Delights, the critical success factors include achieving sales and growth targets in its target market. However, this is to be done in a cost-effective way. It is crucial that it also maintains its brand image through its value proposition. To do this, Cocoa Delights must increase operational efficiency with regards to its energy costs as well as marketing and strategic implementation.

Cocoa Delights Business Opportunities

Franchising

The franchise is a form of business opportunity through which an organization enters a market through licensing its business name and the operational methods to another organization or person in a specific location. Franchising is an easy and less costly approach through which Cocoa Delights can enter new markets and locations in Australia. The organization desire to expand the business to Sydney can be achieved through a franchise. The franchiser, in this case, is responsible for providing the required capital and resources which would reduce the financial burden on an organization. However, a franchise business opportunity becomes unideal due to the potential conflict between the organization and the franchise while also there is strict compliance required due to high government protection on the franchise.

Joint Venture Business Arrangement

A joint venture is a business opportunity through which Cocoa Delights gets into an agreement with another business that already has operations in other markets that Cocoa Delights is yet to enter to sell its products or market them in their stores through a partnership that best works for the interests of the two businesses. In this case, Cocoa Delights desire to enter new markets can be achieved by leveraging on the logistics of Haigh's Chocolates because the organization already has market presence in other markets where Cocoa Delights desire to enter such as Melbourne.

Cost and Benefits Analysis

Franchisee

Benefits

Cocoa Delights can use the Franchisee business opportunity in Melbourne by leveraging on Franchises where the organization gives legal rights to another individual to sell its products using the organization name. The approach is beneficial to Cocoa Delights because it will increase the organization market share which is a significant organization desire at a low cost because the cost of capital is incurred by the franchise.

Cost

The cost of using franchisee business opportunity is that the organization cannot ultimately control the franchise and the conflict of interests between the franchisee and Cocoa Delights can negatively affect the organization reputation and brand management efforts.

Joint Venture

Benefits

The benefits of engaging in a joint venture with Haigh's Chocolates in Melbourne market is that the organization will not incur the cost of constructing new stores as well as marketing its products in Melbourne because they will be shared with Haigh's Chocolates. Cocoa Delights will take advantage of the existing systems and logistics to enter the market and increase consumer access. The complementary nature of Cocoa Delights and Haigh's Chocolates products makes a joint venture more ideal than a franchise which has more legal constraints.

Costs

There are no significant costs against Cocoa Delights when the joint venture opportunity is used because of the alignment between the organizational goals and the joint venture partner goals. In this case, both the organizations will benefit from greater market access.

PEST Analysis

Is a concept of marketing management which seeks to assess the new market environment to identify features that should be considered in decision making. A PESTLE analysis will be of importance to Cocoa Delights in Melbourne by improving evidence-based decision making regarding the market.

Political Environment

This factor seeks to assess the government influence in the economy or industry in Melbourne. In this case, the government legal policies in Melbourne are business friendly but require the organization to be compliance with its protection to franchisees. In this case, Cocoa Delights should be careful in deciding for the franchise or joint venture approach due to the legal constraints established by the government to protect the consumers and the franchisee.

Economic

In Melbourne, the economy has a significant advantage for any business because of the high population which presents a significant market for Cocoa Delights products. The economic growth patterns in Melbourne are in alignment with Cocoa Delights goals of expansion, and the market could increase consumer access to Cocoa Delights products.

Social Factors

People in Melbourne love new products, and the new Cocoa Delights products will attract demand especially to the high population of young people in Melbourne. However, brand awareness by supporting social initiatives in the community will play a significant role in increasing Cocoa Delights access to this market. Therefore, Cocoa Delights will need to create an extensive corporate social responsibility framework.

Technological Factors

In Melbourne, many brick and mortar stores are leveraging the use of e-commerce technology to supply their goods and services to the consumers. Cocoa Delights should introduce e-commerce services in Melbourne to increase consumer convenience which has proved to increase sales and market share because many people in Melbourne today will appreciate the convenience of having their products delivered at their doorsteps.

Legal factor

Regarding the legal environment, it is important for Cocoa Delight to abide by the government rules that protect the consumers and also the franchise in Melbourne. Cocoa Delight's brands in Melbourne should be both quality and show concern for people's health.

Environment

The environment is a sensitive factor in Melbourne because the government requires all the businesses to produce and package their products in an environmentally friendly approach. In this case, high compliance to environmental conservation can increase the organization growth and reputation amongst the consumers in Melbourne.

Risk and Risk Management

The biggest risk in Melbourne is high competition and also the risk of conflict in interests between Cocoa Delights and its market partners. Cocoa Delight can manage the risk of conflict of interest by having an open operations approach and sharing information with its partners to avoid conflicts. Besides, the organization should comply with the environmental and consumer protection laws in Melbourne.

Fit

Regarding fit, there is a high fit between the organization goals and desires with a joint venture with Haigh's Chocolates because the organization can leverage on the organization already existing market logistics and also can easily increase consumer access to its products. Regarding a franchise, the business opportunity is limited by the possible conflict of interests and the organization low legal control of the franchisee who is highly protected by the government and could harm Cocoa Delights reputation.

Impact

The joint venture opportunity has the likelihood of increasing consumer access to Cocoa Delight products at a low cost because of the high alignment between Cocoa Delights and Haigh's Chocolates goals. Cocoa Delights will get greater market presence which will increase the organization sales and market penetration in locations where Haigh's Chocolates is already in operation.

Cocoa Delights Marketing Objectives

Set of Objectives and Statements

Brand Management

Cocoa Delights should take brand management as an essential target for the overall joint marketing opportunity with Haigh's Chocolates. Brand management is the process through which an organization Cocoa Delights maintains its place amongst the consumers in the market that is dominated by stiff competition. Achieving prominence in the public space increases the overall brand awareness in the long-term which can increase brand sales and consumer loyalty to the organization products. Using the brand image and identification images such as the organization brand signature to create publicity through corporate social responsibility behavior can help Cocoa Delights to im...