Business Level Strategy for Rocky Mountain Chocolate Factory

Question: Discuss about theBusiness Level Strategy for Rocky Mountain Chocolate Factory. Answer: Attractiveness of the confectionary market Confectionary market is one of the most attractive markets in the world. It is mostly established in the North America and Western Europe. According to the report by Phan and Vincelette (2008), the USA was the strongest market for the confectionary and chocolates business in 2007. The confectionary businesses are now targeting the emerging markets in Asia, such as, India, Japan and China due to the growing affluence for chocolates and confectionaries. The attractiveness can be understood from the statistics of National Confectioners Association, USA candy markets experienced a hike in sales from $27.9 billion in 2005 to $29.1 billion in 2007. Average spending on confectionaries in USA was $93.92 and on chocolates was $52.16 in 2006. Profit margin was approximately 35% for the confectionaries in the USA. The data of 2002 shows, the Scandinavian and Western European countries are the largest consumers of the cocoa and confectionary products, followed by the Americas. Average annual chocolate consumption of 8kg per capita makes Europe a lucrative market. Tastes and preferences of consumers make this industry an attractive one. The confectionary market was developed first in the Europe and then in the USA. The affluence for the chocolates and confectionary products has been growing across the world since the past century. Hence, with the increasing consumption of cocoa, variety of chocolates and different types of confectionary products has made this industry a very lucrative one. Key Success Factors in the Confectionary Market The success of the confectionary market depends heavily on the tastes and preferences of the customers and it is important for confectioners to understand the trend of the preferences to thrive in the industry. Premium confectioners of the world are Godiva, Lindt, Nestle, Harsheys, mm, Rocky Mountain Chocolate Factory, Ferrero etc. and for a long period of time, these companies have been ruling the world market. The key success factors are as follows: Understanding the trend and pattern of the customers tastes is the primary factor for success. The nature of the market must be analyzed properly. The more mature markets prefer low calorie, healthier products, while the new and emerging markets prefer the basic products. Various demographic factors must be evaluated. Religion, culture, tradition, income level and standard of living are the determining factors for the sales of the chocolates and confectionary products. Some cultures prefer sweets while some prefer chocolates. The demand for gourmet chocolates and low calorie, healthier confectionaries are rising in the developed markets. In the emerging markets like India and China, the confectioners have to compete with the traditional sweets. Hence, demographic factors must be understood precisely. Fair trade practices should be adopted by the companies. Now a days, although the consumers prefer to consume healthy dark chocolate products, they are also conscious about the exploitation of the cocoa farmers in the Western Africa and usage of child labor. Competitions are increasing for the global chocolate and confectionary industry. Hence, the companies must make good strategies for selling their products. The retail stores, merchandise stores and their own factory outlets are reachable to the consumers and they target to make the prices affordable to all (Phan Vincelette, 2008). References Phan, A., Vincelette, J. (2008).Rocky Mountain Chocolate Factory Inc. (2008): Recipe for success.