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 - – challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing energy prices, geopolitical disruptions, central banks are concerned over increasing inflation,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
Innovation driven organization
– Pete's Cocoa is one of the most innovative firm in sector. Manager in Cocoa Pete's Chocolate Adventures (Abridged) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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 -
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cocoa Pete's Chocolate Adventures (Abridged), it seems that the employees of Pete's Cocoa don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Pete's Cocoa has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Pete's Cocoa supply chain. Even after few cautionary changes mentioned in the HBR case study - Cocoa Pete's Chocolate Adventures (Abridged), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pete's Cocoa vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Pete's Cocoa, firm in the HBR case study Cocoa Pete's Chocolate Adventures (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 -
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pete's Cocoa can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Pete's Cocoa can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Pete's Cocoa to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
Regulatory challenges
– Pete's Cocoa needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cocoa Pete's Chocolate Adventures (Abridged), Pete's Cocoa may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
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.
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.
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.
