Rogers Chocolates Rogers' Chocolates is a company that has a rich history and is Canada's top chocolate maker. Rogers' chocolates begun by Charles "Candy" Rogers in 1885 at Victoria, B.C. has now evolved to be a company that today competes with multinationals like Nestle which shows its growth and expansion. During the time of the founder Rogers the company's store stood at the heritage storefront on Government Street in Victoria. Now there are seven retail outlets and more than a hundred whole sale outlets with a multinational presence shipping to fifty countries and the factory has grown from the Vancouver street beginning to span twenty thousand sq feet unit.

Rogers have had a lot of competitive advantages in the years and with the changes in the market.

Rogers' primary sources of competitive advantage:

Strengths of the entire industry basically revolve around the demand for artistic creation of chocolates which is proprietary. The strengths for the chocolate industry are the use of family brands, intensive distribution, mergers, and retailing at store brands, product differentiation strategies, line extension possibilities, quality and a loyal market following.

Rogers have their well established brand name and product line that is famous in Canada and U.S.. The distribution can be thus based on the individual identity of its offerings and thus have a stable following.

According to Anne Garber, Managing Director of www.evalu8.org, the Rogers' Chocolates No-sugar Added Chocolate Truffle Selection is based on hand-wrapped chocolates and being no-sugar-added chocolates being sweetened with maltitol and sorbitol can be used universally even with those requiring low sugar. The no sugar added is an innovation that has changed with the times. For example the Rogers' Chocolates No-sugar Added Dark Chocolate Bar and Milk Chocolate Bar use maltitol and sorbitol, and can be used by Diabetics and has been rated high by the reviewer.

This shows that the company is catching up with the changing trends and is 'in the market'. It is a strength that the Roger's company can use in expansion. The problems of the company are mostly that which is experienced by most small manufacturers.

Roger's main strategic problems:

The general weakness in the industry is the high cost in developing products, and creating new ways of delivery, changing and innovation on packaging, targeting customers, health consciousness of customer and the retail shelf space competition.

These difficulties seem to have been overcome by Rogers which is bringing out researched versions of its products based on consumer appetites. However the whole industry consumption of cocoa the main ingredient is seasonal leading to escalation in demand during peak season sending costs soaring. The chocolate industry is plagued by the fluctuations in demand. Greater demand is seen in the holiday season. Hence most sales occur during the fourth quarters of the calendar year.

Other problems relate to the consumer trends that show increase in the sale of premium-priced chocolates. Customer sensitivity to cholesterol and other body issues in consuming high-fat foods generally affect the chocolate.

How far has Roger coped with this? Rogers seem to have answered the diabetics, but not the calorie counters. The bleaker side of the market is that demand for normal chocolates is growing flat. On the other hand the higher end, the artisan, the dark chocolates, have a future market.

The greater threat has come by way of overseas competitors or artisans in the chocolate industry and innovations in the information industry. For example the centre of the confectionary industry is in France and Belgium, where the artisan chocolate makers create new delicacies and it is a part of research which could be costly. Today the chocolate manufacturers can know of the innovations from Canada without having to travel because of the online portal Chocomap, which gives out the locations of more than one thousand chocolate shops around the world. Thus from Vancouver best artisan chocolate in the world can be ordered without travel. This innovation has brought in the competition to Purdy's and Rogers, which dominate the family market. Overseas specialists like Greg Hook, Thomas Haas or Joanne Mogridge have entered Vancouver and Canadians are willing to spend more for these exotic chocolates.

This type of competition is a major problem.

What are the three most promising options available to Rogers to gain, maintain and exploit competitive advantages? Which of these options would you prioritize and why?

a) The company seems to enjoy a great reputation in Canada and can use that to retain the local market. Thus it is a fact that Victoria-based Rogers Chocolates is Canada's most venerable chocolate maker. Oct. 25, 2010, was declared Charles Rogers Day in Victoria for the 125th anniversary. The trend that the company is focusing on is organic food and expansion in Vancouver.

Rogers was awarded the Innovative Retailer of the Year 2005 "for demonstrating market leadership and innovative approaches to customer and employee relations. It also won the Online Retailing Award...

The company has a great online presence that they must cultivate further. The fact that the company has great market and brand name can also be exploited at home by offering more retail units, and as it is suggested Rogers could develop a wholesale network using a turnkey store-within-a-store setup that would be like creating a Rogers counter inside the department stores which can be used to promote the Rogers brand in new markets. Cost wise it would be economical and the store owners would be willing if they got proceeds from the sale.
Such a move will create a lesser opportunity for rivals to enter its home turf. Further expansion and franchising of its units to the east -- such that like MacDonald's, the company can go east can also be considered.

b) Expansion must go hand in hand with creation of more sophisticated goods, and some artisans have created unique flavors. This huge variety of flavor combinations resulted in combinations that are sometimes strange with the artisans using chocolate with olive oil, East Indian garam masala, mushrooms, green tea, and many things.

Curtis Vreeland, a U.S. food industry consultant, recently reported in a study for Packaged Facts that the "fine" segment of the chocolate industry, encompassing artisans and quality-focused regional players, is growing twice as fast as the market as a whole. This has to be done with the consideration of quality. The retailers like Rogers have to be very careful on quality of their products and the sale process of the Brands. Steve Parkhill, CEO at Rogers' wanted to exploit the Rogers store network, but having only thirteen million in annual sales the options to expand is less even though Rogers' is a strong brand, and is skilled in "experiential retailing," of its premium brands.

The company is catching up with the changing trends and is 'in the market'. It is a strength that the Roger's company can use in expansion.

c) The company owns a premium brand, and the company must develop its retail channel especially in Vancouver retail sites. The aim must be to achieve the annual sales growth of over fifteen percent. Along with that the company must see that it makes the wholesale channel grow with the same speed, something it can achieve while the competitors cannot. The company has shown initiative in expansion and is in the right mode by entering into alliances with other companies to strengthen its base, like the joint venture with Purdy's Chocolates, and collaborate and became the suppliers of the 2010 Winter Olympics, held in Vancouver.

Further collaborations have also occurred like the one with Power-Selles Imports, Inc. where both the companies are sharing clients, warehousing, "and each others" services.

Thus Rogers must work to maintain its reputation in Canada and the local market. It must further develop the retail including better efficiency of its website. Rogers could develop a wholesale network and overseas franchising in the model of MacDonald's. Further the Rogers store network can be built up over the years. It must continue with the policy of entering into alliances and collaborate with willing entities to save cost and expand in the market.