Case Study Description of Cocoa Pete's Chocolate Adventures (Abridged)
On Labor Day 2002, Cocoa Pete's Chocolate Adventures launched its small selection of gourmet chocolates at high-end supermarkets in the San Francisco Bay Area. The company's founder, Pete Slosberg, had carved a niche out of the stagnant chocolate industry, where he thought a start-up could thrive. His strategy was in many ways derived from the strategy for his previous entrepreneurial success: Pete's Brewing Co. (makers of Pete's Wicked Ale). Of significance was Cocoa Pete's determination to substitute its own production facilities with the underutilized equipment of a larger chocolatier. Cocoa Pete's gourmet chocolates were positioned as irreverent and fun, capitalizing on the changing American palette, where the more staid gourmet brands seemed inaccessible. Throughout the strategic planning and product execution, Slosberg and Cocoa Pete's CEO Scott Barnum pushed to change an industry.
Swot Analysis of "Cocoa Pete's Chocolate Adventures (Abridged)" written by Glenn Carroll, Greg Powell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pete's Cocoa facing as an external strategic factors. Some of the topics covered in Cocoa Pete's Chocolate Adventures (Abridged) case study are - Strategic Management Strategies, Entrepreneurship, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cocoa Pete's Chocolate Adventures (Abridged) casestudy better are - – increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, geopolitical disruptions, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Cocoa Pete's Chocolate Adventures (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cocoa Pete's Chocolate Adventures (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pete's Cocoa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pete's Cocoa operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Cocoa Pete's Chocolate Adventures (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Cocoa Pete's Chocolate Adventures (Abridged) case study
2. Improving business portfolio management of Pete's Cocoa
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pete's Cocoa
Strengths Cocoa Pete's Chocolate Adventures (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pete's Cocoa in Cocoa Pete's Chocolate Adventures (Abridged) Harvard Business Review case study are -
Learning organization
- Pete's Cocoa is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Pete's Cocoa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cocoa Pete's Chocolate Adventures (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Pete's Cocoa has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Cocoa Pete's Chocolate Adventures (Abridged) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Pete's Cocoa has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Cocoa Pete's Chocolate Adventures (Abridged) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Pete's Cocoa in the sector have low bargaining power. Cocoa Pete's Chocolate Adventures (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pete's Cocoa to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Pete's Cocoa is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Pete's Cocoa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pete's Cocoa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Pete's Cocoa
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pete's Cocoa does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Pete's Cocoa is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Pete's Cocoa in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Pete's Cocoa is one of the leading recruiters in the industry. Managers in the Cocoa Pete's Chocolate Adventures (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Pete's Cocoa has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cocoa Pete's Chocolate Adventures (Abridged) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Pete's Cocoa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Cocoa Pete's Chocolate Adventures (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cocoa Pete's Chocolate Adventures (Abridged) are -
Need for greater diversity
– Pete's Cocoa has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Pete's Cocoa has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Glenn Carroll, Greg Powell suggests that, Pete's Cocoa is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Pete's Cocoa has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Pete's Cocoa even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Cocoa Pete's Chocolate Adventures (Abridged) HBR case study mentions - Pete's Cocoa takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Cocoa Pete's Chocolate Adventures (Abridged), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Pete's Cocoa needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cocoa Pete's Chocolate Adventures (Abridged) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pete's Cocoa has relatively successful track record of launching new products.
Products dominated business model
– Even though Pete's Cocoa has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Cocoa Pete's Chocolate Adventures (Abridged) should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Cocoa Pete's Chocolate Adventures (Abridged) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cocoa Pete's Chocolate Adventures (Abridged) can leverage the sales team experience to cultivate customer relationships as Pete's Cocoa is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Pete's Cocoa has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Cocoa Pete's Chocolate Adventures (Abridged) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Cocoa Pete's Chocolate Adventures (Abridged) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pete's Cocoa to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Pete's Cocoa to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Pete's Cocoa has opened avenues for new revenue streams for the organization in the industry. This can help Pete's Cocoa to build a more holistic ecosystem as suggested in the Cocoa Pete's Chocolate Adventures (Abridged) case study. Pete's Cocoa can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Pete's Cocoa can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Loyalty marketing
– Pete's Cocoa has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pete's Cocoa can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Pete's Cocoa can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Pete's Cocoa can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Pete's Cocoa can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pete's Cocoa can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Pete's Cocoa can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Pete's Cocoa has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Cocoa Pete's Chocolate Adventures (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pete's Cocoa to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pete's Cocoa in the consumer business. Now Pete's Cocoa can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pete's Cocoa is facing challenges because of the dominance of functional experts in the organization. Cocoa Pete's Chocolate Adventures (Abridged) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Cocoa Pete's Chocolate Adventures (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cocoa Pete's Chocolate Adventures (Abridged) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pete's Cocoa can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Cocoa Pete's Chocolate Adventures (Abridged) .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Pete's Cocoa needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Pete's Cocoa.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pete's Cocoa business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Pete's Cocoa demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Pete's Cocoa will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Pete's Cocoa high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Pete's Cocoa
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Pete's Cocoa.
Shortening product life cycle
– it is one of the major threat that Pete's Cocoa is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pete's Cocoa in the Strategy & Execution sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Pete's Cocoa needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Pete's Cocoa can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Cocoa Pete's Chocolate Adventures (Abridged) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Cocoa Pete's Chocolate Adventures (Abridged) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Cocoa Pete's Chocolate Adventures (Abridged) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Cocoa Pete's Chocolate Adventures (Abridged) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Cocoa Pete's Chocolate Adventures (Abridged) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Pete's Cocoa needs to make to build a sustainable competitive advantage.