Flinders Business School
|Marketing Strategy and Decision Making
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Table of Contents (not included in the word count)
Introduction (not included in the word count)
Situation Analysis (800/200)
In the globalized food market, Michael Carolan (2011) stated that there is no absolute fairness in fair trade. Due to the flourishing of the Free Trade Movement in the last decade, developing countries can built trade relationships in a level playing field (Jmwilbur 2018). Therefore, there is a potential opportunity for Theo chocolate to survival in chocolate industry.
The series of ‘partner bars’ created by Theo chocolate can be seen as the representative product for supporting the Eastern Congo Initiative (ECI) which is established by Ben Affleck to offer an approach to assist local farmers struggling to survive in the war-torn economy (Easterncongo.org, 2019). Affleck claimed creating investment opportunities in Democratic Republic of the Congo (DRC)is the effective way to realize economic reform (Daniels Fund Ethics Initiative n.d.). The cooperation of Theo Chocolate and ECI contribute to improving the life quality and creating more economic opportunities for cocoa peasants in Democratic Republic of the Congo (DRC) by paying higher wages to peasants and providing education to increase crop yields (Daniels Fund Ethics Initiative n.d.).
Theo chocolate as the first company certificated as organic and fair trade firm, which has a significant positive effect on society (RSF Social Finance, 2019). Recently, the source of capital have attracted the attention of Theo chocolate due to its strong sense of social responsibility, and Theo has ratified an accord with RSF Social Finance in San Francisco that is a leader in funding fair trade and organic companies with significant social missions (RSF Social Finance, 2019). In addition, RSF Social Finance(2019) elaborated that Theo chocolate support peasant training which can help farmers to improve their knowledge of the regenerative agricultural in order to increase crop yield and their cocoa quality. Meanwhile, Theo also provide a distinct pricing structure to maintain the price stability in a volatile marketplace to motivate farmers to improve cocoa quality (RSF Social Finance, 2019).,
Theo chocolate implement a traditional chocolate making techniques that focus on producing product without extra additives to present the nature of ingredients (Chocolate Class, 2019). The significance of his organic certification is that they are organically grown and responsible for production, and the practical meaning of organic food is to grow cocoa beans in an environmentally friendly way(Chocolate Class, 2019).
Porter’s 5 Forces
– Industry rivalry
According to Smallbusiness (2019), there are 400 manufacturers including Mars, Mondelez and Hershey’s in the U.S. chocolate industry to provide more than 90% chocolate for U.S. marketplace, which means Theo chocolate are facing facing fierce competition to survive in the chocolate industry.
– Supplier power
Theo chocolate’s philosophy is to produce in an ethical and sustainable way, which drives Theo to make their selection of suppliers exceptional (Theo Chocolate, 2019). Hence their power of supplier is higher since they cannot buy raw ingredients from any suppliers, for example Mountain Rose Herbs is one of its main suppliers because of the same operate way.
– Buyer power
Classified according to consumer needs, Etho chocolate consumers can be divided into consumers with general needs and consumers with specific needs. The former generally pay more attention on taste and price rather than environmental sustainability and fair trade of products, hence their power is high as they have a wide range of options to choose for lower price. In opposite, the customer who focus on fair trade and environmental sustainability have a lower power because there is not many options to select for them.
– Potential entrants
There are many barrier to entry since investment capital ought to be considered firstly, it is significant to raise a large amount capital to start such business as the establishment of factory and the collection of raw material both require vast capital.
– Threat of substitutes
The substitution of Theo can be divided into general substitution and specific substitution. General substitution can meet the general needs of customers hence there are many options such as Mars, Mondelez and Hershey’s, while there are few substitution can instead of Theo chocolate as special business philosophy for fair trade and environmental friendliness at present.
|Organic ingredients and free trade
|Luxury and Traditional
SWOT Analysis and SMART Objectives (800)
|· Etho earn a reputation as its business mission based on providing nature and organic products by the approach of fair-trade
· Etho’ product represent nature and organic food as it has always operated in an ethical and sustainable manner, whether it is for farmers and growing production or selecting partners.
· Etho also provide special tour for customers to view process of producing
|· Etho have a higher cost of production than its competitor due to it highly focuses on environmental friendly.
· The price of Etho’s production provided to customer, which will decrease the desire of purchase.
|· The development of technology in the related field allows Etho utilize the green energy material as substitution to reduce the price.
· Environmentalism and green consumer awareness are prevalent throughout the world, which helps promote Etho’sproducts.
|· There is an intensive competition in the chocolate industry because of many competitor with large-scale.
· Etho also facing the threat of acquire from big corporation
Through Etho unique business philosophy as a publicity base to raise awareness, use advantage to expand market share and strive to reduce and eliminate disadvantages, so that it can help Etho company to improve the ability of competitiveness. Additionally, Etho can also take advantage of the features of the industry structure, relevant policies and opportunities offered by the external environment to mitigate some potential threats. For example:
Theo chocolate’ mission is to build a compassionate and enduring world in its responsible operating model.
Etho corporation can examine its achievement by evaluating market share and the extent to which farmers receive fair treatment.
Although The mission of Etho chocolate is a huge project, as long as they insist on continuous efforts, it will always be realized in future.
Target Market and Stage in the PLC (included in the word count)
Marketing Strategy & Implementation (4P’s)
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Reference List (not included in the word count)
Show a list of references used in your report. Please make sure you use Harvard referencing style. Present a range of quality industry and academic references.
Michael Carolan, The Real Cost of Cheap Food. Earthscan, 2011.
Daniels Fund Ethics Initiative n.d. ‘Theo Chocolate: Ethical Supply Chains’, University of New Mexico, accessed 27 September 2019.
Easterncongo.org. (2019). About ECI. [Accessed 27 Sep. 2019]http://www.easterncongo.org/about.
Marc Hamel and Ha Lam n.d., “Theo Chocolate,” Whole Story—The Official Whole Foods Blog, accessed 27 September 2019.
Theo Chocolate n.d., “Factory Tours,” accessed 27 September 2019.
Theo Chocolate n.d., “Our Partners,”, accessed 27 September 2019.
Theo Chocolate n.d., “Our Story,’’ accessed 27 September 2019.
Theo Chocolate n.d., “Theo Chocolate Expands Line of Reimagined Classics with New Coconut Bites,” July 17, 2015, accessed 27 September 2019.
Theo Chocolate website n.d., accessed 27 September 2019.
RSF Social Finance. (2019). Theo Chocolate Aligns Mission and Financing with Capital Infusion from RSF Social Finance – RSF Social Finance. Accessed 27 Sep. 2019.
Chocolate Class. (2019). Theo Chocolate Company: the Future of Sustainable, Responsible, and Delicious Chocolate.Accessed 27 Sep. 2019.
Theo Chocolate. (2019). Supplier Profile: Mountain Rose Herbs – Theo Chocolate. [Accessed 27 Sep. 2019]
Smallbusiness.chron.com. (2019). Chocolate Industry Analysis.[Accessed 28 Sep. 2019].https://smallbusiness.chron.com/chocolate-industry-analysis-69812.html.
Appendix (not included in the word count)
Present all additional material that you have referred to in the main body of your report. Here you can include tables, diagrams, images and text.