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 - – central banks are concerned over increasing inflation, wage bills are increasing, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
talent flight as more people leaving formal jobs, increasing commodity prices, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Pete's Cocoa are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
Highly skilled collaborators
– Pete's Cocoa has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Cocoa Pete's Chocolate Adventures (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Cocoa Pete's Chocolate Adventures (Abridged) firm has clearly differentiated products in the market place. This has enabled Pete's Cocoa to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Pete's Cocoa to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Pete's Cocoa has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pete's Cocoa has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Pete's Cocoa is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Glenn Carroll, Greg Powell can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
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 -
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.
Increasing silos among functional specialists
– The organizational structure of Pete's Cocoa is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Pete's Cocoa needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pete's Cocoa to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Pete's Cocoa products
– To increase the profitability and margins on the products, Pete's Cocoa needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Cocoa Pete's Chocolate Adventures (Abridged) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Pete's Cocoa 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cocoa Pete's Chocolate Adventures (Abridged), in the dynamic environment Pete's Cocoa has struggled to respond to the nimble upstart competition. Pete's Cocoa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cocoa Pete's Chocolate Adventures (Abridged), is just above the industry average. Pete's Cocoa needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pete's Cocoa can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Cocoa Pete's Chocolate Adventures (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pete's Cocoa in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Pete's Cocoa to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pete's Cocoa can use these opportunities to build new business models that can help the communities that Pete's Cocoa operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Pete's Cocoa to increase its market reach. Pete's Cocoa will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Pete's Cocoa can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cocoa Pete's Chocolate Adventures (Abridged) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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 -
Stagnating economy with rate increase
– Pete's Cocoa can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
Technology acceleration in Forth Industrial Revolution
– Pete's Cocoa has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Pete's Cocoa needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pete's Cocoa with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pete's Cocoa in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.