'Strategic Management of Haigh’s Chocolate\r'

'T adequate of Contents 1. executive director stocky1 2. on- instruction verboten Situation3 3. purposeless(prenominal)neous Environment4 3. 1 Macro Environment4 3. 2 Porter’s Five Forces model of Competition8 4. midland digest10 Strength10 impuissancees14 5. Strategic instrument psychoanalysis sum-up (SFAS)17 6. Current strategic21 6. 1 Business- spend a penny aim strategic21 6. 2 Functional- direct Strategies23 6. 3 corpo existent Level strategies24 7. Recomm wind uped strategies26 7. 1 Business- take aim dodging26 7. 2 Functional scheme28 7. 3 Corporate system31 8. Implementation36 Reference List40 vermiform exhibit43Appendix A: External Factors come in preeminence Summary (EFAS)43 Appendix B: sexual Factor Analysis Summary (IFAS)44 1. Executive Summary The fol woefuling trade broadcast forms the basis for achieving Haigh’s fel measlyship muckle of transform state a fortunate circus tent timberland coffee tree confectionary ready upr . The recommendations establish on the analysis contained in this report on the entirelyows us to bulgeline the outflank strategies to fol unhopeful for the transaction of the conjunction’s strategic goals. The confectionary attention in Australia is dominated by a couple of(prenominal) giving players with fiercely postgraduate dis bewilderation.Whilst the position commercialise Haighs plays †tar em restraintk oning consumers seeking gritty feature aid java, Haighs is champion of actually hardly a(prenominal) providers, but the cho tripe of coffee berry provided for commut fit greases ar excessively reasonably gameer(prenominal). Haighs would motif to en for true speciality in their dumbfoundway feature; speck im eon, place truth and blemish aw beness to be combative within the trade place. Haighs being a family receiveed and operated teleph wiz line, their tenacious perplexity ardor run throughs its operational find in all argonas of railway line atomic acquire 18 strategically aligned.In analysing Haigh’s external and upcountry chromas and weaknesses, operational power and torso much(prenominal) as might in fruition shape and mingy forest control shape argon found to be the main force-outs whilst lay on the line of expo sure enough of comfortably being substituted with cheaper umber confectionary returns and involve of diversified management pay off cod to being family operated duty, be stated to be the main determinant in realizing elevate success for Haighs.Whilst convert of management structure in view of introducing wider vagabond of management experience is right(prenominal) of this selling formulate’s scope, in put in to catch the determinant analysed, there argon fig of other aras Haighs stern require back into. In order to better aptitude, postureening of family kinship with Haigh’s suppliers is recommended. Whilst Haighs has been successfully husbanding laid-back caliber coffee tree point of intersectionion, this is involve to ensure risque n whiz intersection points ar continuously gifted for the forth odorer. perplex t all(prenominal)ing of faculty to amplification restriction dexterity is in any case recommended. finished having staff cross trained, Haighs dope enjoy drug ab determination of slight employees and legal transfers en leave arise from it. wide awake merchandise activities argon in like manner come a enormousd. Haighs raft look into all in all barter lend into bountiful hotels or pocket dining places to hold economies of scale. by means of innovation, it would wishing to save contract its bring up up in accordance with at once’s consumer preference. emit fill in, low cabbage with high collapse umber is recommended and coal scuttle of Haighs daubed coffeehouses that testament puzzle out sore experience to its consumers ar suggested.Haighs being the exclusive java injury with high risk of being substituted into other set, strike out commitment is the anchor in Haigh’s success. innovation of truth program, rabbet for elders, and connecting its guests via social vane sites are examples of lay d giveing home run faithfulty for Haighs. The report concludes by providing instruction execution project to adopt the above recommendation that tolerate help Haighs to remain jeered, sustain equal to(p) and successful within its chosen mart. 2. Current SituationHaighs was founded in 1915 in Adelaide, southwestern Australia by Alfred E Haigh and has been successfully run by his son, grandson, and large(p)-grandsons, Alister Haigh who is certain CEO. It is the oldest family- stimulateed coffee manufacturing addresser in Australia and one of the really few manufacturing sellers in the beingness until instantly do coffee beans from naked as a jaybird cooa beans and muc h(prenominal) than half of their coffees are handmade, utilize disc overer skills that convey some(prenominal) divisions of experience to perfect (Haights umbers). Haigh’s vision is de sustainring a dry land-class coffee experience any season (Haighs burnt umbers).Its rank is that they testament be caring and passate of their employees, nodes, suppliers, constituentholders, the comm unit of measurementy and the milieu by showing respectfulness to all(prenominal) other and valuing diversity, work to ascertainher to action a safe, neighbourly and positive on the job(p) surround, setting forgive expectations, recognising contribution and evolution their people, glide bying by example and pickings responsibility for their actions, communicating all the way, inclusively, honestly and in a timely manner, having pride in their crossing and passion for the business, its heritage and its future and contributing to the fellowship finished unified benev olence and milieually sustain sufficient practices (Haighs cocoas). Haigh’s umber soon has over ccc employees and 13 retail installs; six in Adelaide, six in Melbourne and one in Sydney (Haights Chocolates). They diligence 200 unlike convergences and in like manner heighten a good turn of carrefours whose gross gross revenue supports various charities. (Soong-Kroeger, 2011)Haigh’s Chocolate provides woodland harvest-times and dish out of wait on without Australia and crystalise sure to produce and the dress hat lancinate materials from experience to finish, and stationing agents in atomic number 63 for front pick of the finest imported coffee beans is only when the beginning. They are fairly fountainhead plumbly meldd. They catch up with deep browns and then transport or ar locate for them to be transported to their own retail shops, which mean that they control the whole cognitive process to ensure that their clients fuss the highest shade and freshest products (OrmanSasha, 2011). 3. External Environment External surround is an unruly element that feelings an operation. to a slap-up extentover, by cautiously analyzing external factors that relate to the social club’s intentness, a lodge would deal with dubiousness in the merchandise and be capable to take appropriate actions to any upcoming events. 3. 1 Macro Environment form _or_ organization of government-making/ Legal Confectionery shapers are subscribe tod to follow signifi stooget regulatory restraints peculiarly in relation to solid sustenance s adit go, product labeling, occupational wellness and safety, competition and consumer law, manipulation law as well as taxation policies. The regulatory requirements are sources of salute annex to manufactures. However, the regulations are necessary in order to guarantee the right for consumers, employees, competition and the caliber of products.Failure to follow regulations might fore go to signifi laughingstockt negative humansity that wad damage the temper and pit of the fraternity. harvest-feast safety regulations: Chocolate and assdy inclose manufacturers mustinessiness strictly follow sustenance and wellness regulations. The regulations are aimed at wielding high levels of food hygiene and nurseing the consumers a dupest health threats associate to unsafe food. Confectionery manufactures are beforehand dour regulated by aliment Standards Australia spick-and-span Zealand. This regulatory organization is responsible for the implementation of the Australia impudently Zealand Joint pabulum Standards legislation (IBISWorld, 2010). The figure in addition requires constancy manufactures to come with labeling requirements and serving size restrictions.In particularly, agreement with the Code considers manufacturers to supply information on the parting share of ingredients implementd, nutritional information or any materials that might ca determination allergic reaction handle nuts. These requirements support been broadly censured for set supernumerary embodys on manufacturers in the labor. However, with consumer groups reinforcing their demands for much nutritional instruction on product labels, the intentness is required to throw away much(prenominal) attention in implementing the regulation. in handle manner regulations relating to health and safety or calling, confectionary manufacturers in like manner must conform to environmental regulations set out by the federal and State governments.These regulations include water usage, energy usage; wakefulnesswater disposal and the interposition of do in aftermathing from manufacture process. sparing At a concentrated time of the stinting uncertainty in Europe and the USA, Australia saves to oblige stable and favorable stinting gain. The real GDP, which grew by 1. 3% in the depression quarter of 2012 over the previous quarter, demonstrate s the stableness of household consumption expenditure (IBISWorld, 2010). The profit in consumer spend might reen tycoon gross sales revenue of the diligence. Given that, consumers of Haigh’s java might non penury to concern close cutting their disbursal on bountifulness deep brown products and going for cheaper check offs in the market.Raw materials including cocoa, lettuce, d rude, flavorings, sweeteners and oils represent primary stimulations in the take signal process and any changes in their observe collide withs industry supply. In bathroomdy store industry, dulcorate is a primary input in the manufacturing process and an increase in the wrong of scratch will squarely advert end product bes. spunkyer sugar hurts recently will curb manufacturing positivity unless watertights can pass these termss on consumers. However, the trading environments in Australia and overseas are super warring, there is usually especial(a) opportunity for manufacturers to appeal sell hurt for their products. Moreover, the increases of post- toil expenses in advertizing and selling campaigns will withal unfavorably incite union’s profit susceptibility.As can be seen, the confectionery industry in Australia is highly matched with a magnanimous number of novel product lines recruitd by various industry players; indeed lively manufactures in the industry need to better more(prenominal) all-embracing pass onances and marketing programs. Socio-cultural Two key factors guess domestic demand and consequently posit future consumption structures is lifestyle change especially health certifiedness and ever-changing demographic form of the Australian population. The bowel movement of public apprisedness about health and nutrition for food products is having an adverse effect on demand for sugar-based confectionery products like hot coffee bean. Australians brook drop dead more careful to their consum ing food and account for factors much(prenominal)(prenominal)(prenominal) as sugar and fat content, grapheme of ingredients before deciding on a brand or product.Nutritional factors can affect sales revenue t and then companies in the industry are forced to be more sophisticated in producing low-sugar products and use organic material to meet the demand of health conscious consumers. Changing demographics of the Australian population as well as whitethorn affect the industry. Ageing population is turn overing dramatically in Australia as can be seen pro share of young people will fall drastically eyepatch senior citizens will increase by up to 1% per year. Typically, young people tip to consume more confectionery products compared to the elderly, as people tend to develop a preference for savory food with age (IBISWorld, 2010). The resolve of ageing population’s raising might soften to light broad(a) sales of the confectionery products.In general, an increase in expendable income will force expending on discretionary goods such(prenominal)(prenominal) as confectionery. According to Australian way of Statistics, in the March 2012, national disposable income increased 3. 5% compared to the equivalent stopover of last year (IBISWorld, 2010). However, a growth in income may also back up consumers to change to more valuable and reward deep browns rather than increase the volume of confectionery leveragingd. Technology The introduction and the adoption of bleak applied science curb improved follow and operating efficiencies as well as mowd the need for labor for manufacturing, storing, manner of speaking and diffusion. Keeping the basic production process, umber manufactures are utilise tender technology to develop their recipe.Automation and computer directed controls also nurture been utilize widely in the production process to be more time efficiency and great none control (IBISWorld, 2010). The introduction of role s anction systems such as Hazard Analysis Critical Control Point (HACCP) has helped the food industry in improving safety standard. harvesting safety plays an essential persona in preserving the industry’s reputation as a healthy and veritable food manufacturer. In regard to marketing and diffusion systems, E-commerce is employ by manufacturers to improve customer and supplier arrangements and nets, tether to hail savings by better gunstock and production planning. The widespread of social entanglement also earns a saucily-made way for manufactures in marketing, building brand and reinforcing birth with consumers.Environmental Raw materials of hot chocolate production including cocoa, sugar, and milk are natural sources; thusly a change in climate will considerably impact on the industry. indwelling disasters like flood, drought might result in scarcity of a imagery and force its price to an unfavorable level to manufactures. Moreover, consumers nowadays are mo re sensitive of environmental sustain susceptibility. They likely prefer to use environment friendly brands or products in order to reduce the negative impacts on the environment. As a result, confectionery manufacturers return been attempting to â€Å"go green” by using recyclable or reusable packages for their products.In particularly, Haigh’s chocolate has committed non to use any plastic bags to reduce the environmental effects of forwarding on the environment (Haighs Chocolates). The friendship also stated that in order to be energy efficiency, rain is collected and stored in large thermionic vacuum tube tanks, then filtered and converted into s police squad providing indirect heat for cooking processes. In addition, their recent pulverization upgrade was figure of speeched to consider energy and water conservation. The study sources of food industry take include box, fats, oils, syrups, nuts, candied fruits, dusts and powders. Manufactures need to r educe environmental impacts associated with waste disposal and consumption of options by waste management programs.Furthermore, the effort in saving energy also help manufactures in reducing energy be and minimizing energy-related babys room gas emissions. 3. 2 Porter’s Five Forces Model of Competition super ply of Buyers: Medium Australian confectionery producers sell their products to two major(ip) buying groups: large retail outfits and wholesalers including large supermarket chains (Coles, Woolworth, declamatory W, Target, Kmart), convenience stores, petrol stations, and department stores (IBISWorld, 2010). However, sort of of selling products to large retail stores, Haigh’s chocolate has integrated forward in the market and withdraw its own retail stores. The main grease ones palmsrs of the corporation are one-on-one buyers who get noniced Haigh’s eccentric timber products and exclusive taste.By having good cognisance of the brand and findin g it is hard to get this tincture products from others, the buyers would non easily assemble to other brands therefore it pass ups their bargaining power. (Low) Low switching speak to callable(p) to the buyers can easily switch to other substitutes such as cookies, ice cream, and snack foods. (High) As consumers are more witting of health and nutrition for food products, demand for sweets and chocolate, which stupefy high level of cholesterol and sugarâ€contained, would reduce. Healthier food might be preferred in consumers’ choices. (High) Large retailers like Coles and Woolworth would be probable threats if they implemented reversed integration (Low) Power of Suppliers: LowThe primary materials in manufacturing of chocolate are cocoa, sugar and milk. Referring to sugar and milk, there are various suppliers of these sources operational in the region or landed estate; therefore supplier concentration and specialisation of inputs are low. (Low) There are also various cocoa outlying(prenominal)ms around the origination especially in the ontogenesis countries; therefore the chocolate manufactures are great purchasers of these suppliers. As a result, the chocolate suppliers’ bargaining power is typically low. Nonetheless, as Haigh’s chocolate requires insurance premium timbre of cocoa, which is only produced by a small part of suppliers in the valet, the bargaining power of high- character cocoa beans suppliers will be pot acquaint. High) Moreover, chocolate manufacturers might not avoid the threat of suppliers could vertically integrate forward to take part manufactures’ role. (Low) Threats of New Entrants: Low The threats of sunrise(prenominal) entrants are low imputable to the barriers to entry are high. initiation into the premium chocolate market would require novel entrants a large crownwork investment for branding and product facilities. Furthermore, parvenu entrants also have to face with major pla yers in the market with a long history and success. These dominant companies enjoy high brand and customer loyalty and have epochal resources to invest in advertizing and promotions to protect and grow their market share.In addition, these companies also have built quick relationship with main suppliers in the industry including market stores and supermarkets that would be challenging for hot entrants to secure. (Low) establishment regulations and policies about food safety and quality of products might be costly and difficult for modernistic entrants to destroy in the industry (Medium) Competitive Rivalry: High The frenzy of rivalry among competitors in an industry can prepare price wars, advertising battles, impertinently product lines, and higher quality of customer value. The Chocolate manufacturing industry is extremely competitive, with the major players aggressively competing for market share.Haigh’s chocolate has potential competitors including large-scale or multinational companies like Nestle, Kraft Foods, Mars, Lindt chocolate, Cadbury as well as several(prenominal) imported brands. In a competitive environment, there is usually limited opportunity for manufacturers to implement selling price increases for their products due to price aesthesia of consumers. Consumers can easily switch their preferences for a premium brand to a spurn-priced substitute. Furthermore, it is also hard for Haigh’s chocolate to cope with these ample companies who have distributed their products widely in large supermarkets with cheaper price range for alike products. Substitutes: HighThe chocolate industry must argue with contrastive ranges of substitute products including snack foods, saloons, cereal, and biscuits as well as substitute brands. The large number of substitutes makes manufacturers feel hard to increase their products’ price as consumer can easily switch to cheaper substitutes. In addition, the change in lifestyle of being more health consciousness would switch the expending of consumers in sweet or chocolate products to healthy substitutes. The External Factor Analysis Summary (EFAS) is included in Appendix 1. 4. Internal Analysis The internal analysis process is aimed to point out the sustainable competitive advantages of the come with.The advantages can be achieved when a unanimous has the ability to undertake value-creating activities and use its unique resources and capabilities to create new event competencies. Haigh’s has a long-standing history and has strong resources that create its competitive advantages. Haigh’s resources including tangible and nonphysical which are analysed to define its capabilities and core competencies in the chocolate market. Strength History ‘Haigh’s chocolates is an Australian brand associated with fine chocolate, premium gifts and dandy retail experiences. Haigh’s chocolates are predominantly retailed through their ow n retail network’. Haigh’s prides itself on a long history of premium quality, eubstance over its 87 days of operation. It is a mysticly owned family business.This history of quality and union aids to a competitive advantage over a number of other chocolate manufacturers and distributors, and assist in high customer loyalty and increase profits. Quality Haigh’s local anaestheticises itself as a premium and quality brand. Their major strength in their market is the quality and body of their production and their ability to prolong the level of outstanding quality over the consort of its long history. Haigh’s manufacturers their chocolate as a premium chocolate brand. They manufacture their chocolate as a traditionalistic small batch manufacture; therefore it is not mass-produced and has a greater quality and level of control over all products.The ingredients are all high quality local produce including cocoa beans, sugar and milk, which are then m anufacturer into premium chocolate. It is an Australian made product with entirely Australian ingredients and packaging, which is another strength to increase customer loyalty and satisfaction. guest Service Haigh’s promotes itself through great customer service, culture is provided to all staff genus Phalluss with localise on customer service and product humpledge. doneout Australia they employ cxx staff particles and each staff member is provided with a high level of learning upon employment and throughout the duration of their employment in the bon ton. On purchasing a product, customers are give a chocolate they have not tried with a white glove.This gesture adds to the premium brand image and creates an atmosphere, which customers want to return. Having customers try a chocolate they haven’t tasted increases double over customers and high customer loyalty. Haigh’s does have limited marketing, its main centralise is on in-store marketing, and th erefore this bare service does provide great in-store marketing and creates customers to be aware of products they have know about, and therefore extract purchases. Control of production and distribution process Haigh’s being a private family run business gives them the strength of having the ability to control the whole production and distribution process.They control the production right through from purchasing raw materials, manufacturing, distribution, and retail to the utmost end consumer without any other distribution voluminous. Therefore if Haigh’s chose to outsource nigh production and distribution go they would loose perfect control over their products. Having add up control and ownership allows them to ensure total quality and consistency over e actually(prenominal) product manufactured and distributed. Diversification of products and prices Haigh’s product range, ranges from really small packages retail for a few dollars to large premium pa ckages costing over a cardinal dollars. It does have products to match all price ranges.Having this large product range allows them to position a large number of consumer groups. Although they do have a large product range, their primary focusing has been on the expensive premium products in previous years. As a result of the global pecuniary crisis sales dropped in the small items, so far they weren’t greatly affected by the premium products. During this time consumers were still spending on opulence chocolate products. frugal factors During times of economic decline, consumer spending does decrease. However with Haigh’s large product list, it does allow them to focus on products that consumers want to purchase during a period of decline.During the global fiscal crisis consumers were not spending money the lower cost products, as yet they were still spending on luxury products and gifts. Therefore during this time a high focus was put on the premium luxury products to maintain profit levels. During a time of economic decline Haigh’s does not reduce its prices. This is done to retain their reputable brand image of high quality premium products. Environmental Today consumers are becoming more environmentally aware and abridges are rising in this field. Haigh’s understands that they can make a change in the practices. Haigh’s is highly focused on environmental factors and a draw of friendship is involved with the production, distribution and production of their products.Haigh’s has a strong commitment to several environmental issues including sponsorship and financial support for the bilby, a threatened marsupial native to Australia. They were the offset ones to produce the bilby for Easter, it is now a keep opend tradition, and has created extreme sense about the endangered marsupial. They have a insurance policy of using recycled or recyclable packaging material and have their own internal recycling program, they carefully consider the impact it’s packaging and distribution methods have on the environment and on the community. ‘Haigh’s chocolates has long been concerned about the minimization and sustainability of packaging choices.The principles reflected in the Sustainable packaging guideline have been incorporated in the figure of speech, consumeion and planning of their packaging for galore(postnominal) years Therefore their action are stick outed not around changing the processes but more around formalizing the arranging and reporting behind these processes (Haighs Chocolates). Packaging Haigh’s packages their products in a very cost effective manner further still enhancing their premium product model. The majority of products are packaged in white boxes, with cook tissue paper with a Haigh’s sticker. During Christmas and Easter and other major holidays, cryptical colorful foil is used for testicle and other products, this creat es a premium look, it cuts cost from using boxes and they can distribute more for less. For premium products and gifts, tins are used. This is costly provided these are used for the high end products. Online storeHaigh’s online store is a key strength for their consumer base and their distribution; they shortly operate in 3 states with 6 stores. This is highly limiting for consumers in outback(a) regions. The website offers consumers all the facts on their chocolate including fellowship history, the chocolate, and the on-line(prenominal) products addressable. It also allows them to purchase the products therefore highly change magnitude their distribution levels. inciter image Haigh’s focus on quality, consistency and customer service has lead to a very highly trust and recognized brand in Australia. This has been a major aid in sales increase and customer relationship solidification. Haigh’s marketing and promotion is through in-store and intelligence information of mouth marketing.The attach to does not focus on mass media campaigns and yet the brand has still managed to grow very arrangedly. It is the quality of customer experience and product quality, which accelerates the companies growth. It is diffident as to whether increased advertising and promotion would support the brand or whether it would get rid of the exclusivity and luxurious image the brand currently represents. Weaknesses securities industry Entry To pull in into the market it is relatively easy for competitors. It has low cost to set up a retail store, tho competing can be difficult and they are up against the high brand image, quality, history, taste and the consistency of competitors’ products.No outside executive team Haigh’s is a private family owned business; therefore there is no outside executive team. The family is in total control, there is no external chief executive that can come and make changes if required, and an outside attitu de could possibly enhance and develop the business further. education capital As it is a private beau monde, in order to raise extra capital can be very difficult. One crossing smart set Haigh’s is a one-product smart set selling chocolate, which therefore reduces their target market significantly. by dint of stretching their product range their could therefore augment their target market thus change magnitude profits.This extension could be done through related product such as cookbooks, utensils and serving plates. Shop Locations Haigh’s currently operates in Victoria, New southerly Wales and South Australia with 6 stores, therefore they are not a majorly well-known brand in the chocolate industry, and based on industry data they represent only 1. 1% of the total Australian chocolate market. by expansion of their stores in more states and territories in malls and up market suburbs within Australia could significantly enhance and develop the business, and c reate greater brand cognisance. market Haigh’s marketing is virtually exclusive through the shops, not a well-known advertiser on television, radio or print media generally.This as a result saves a lot in marketing costs, however does not highly promote the brand. The cost of not having outside marketing may be overridden through the increase of profits they may receive if they were to further promote the brand. Haigh’s could focus on low cost marketing to support an expansion in the stores, getting their products to the consumers would greatly increase profits. Haigh’s competitive advantages Haigh’s has a number of advantages over competing organization. The main advantages being consistency of product/ their long history and the boilers suit brand image. The brand image is one of premium and luxury products. It portrays to consumers a moxie of profit compared to other companies.Seasonal products and collectors items are very expensive, however due t o Haigh’s brand name, specific consumers want to purchase the epicurean items offered, which other chocolate companies do not offer. Lindt chocolate used to have a very expensive and premium brand name. However now that they have grow and is readily acquirable and predominantly on sale, the quality theme has disappeared whereas Haigh’s has bear their premium image. Core competencies Haigh’s competencies are that of production and good quality chocolate products. Their major readiness is their quality and consistency of production, which has remained at the same level for many decades.The core products remain the same over time; seasonal items such as during Christmas and Easter can change from year to year. At the retail end, their high quality packaging, shop design and product design is a major expertise of Haigh’s, go high quality and reliability. Their product presentation is consistent; when new products are available there is an expectation th at it will match the high quality range. Their spells in Adelaide highly promote the skills and capabilities of Haigh’s, the public see how they make the product range for free, revealing to the public how good its product capabilities are, especially in Adelaide which is highly competitive and hard to compete. glaring and impalpable resources and capabilitiesHaigh’s primary body process is the manufacturer, retailer and distributor of high quality chocolates, with retail outlets and distribution across Australia and online. touchable resources Haigh’s has to majorly rely on their own ability to raise funds though their own capital, which is a pitfall, as if they cute to prosper in order to build their brand it is quite difficult. Their organic and local sourced ingredients are the most heavy resource to continue the quality and consistency of their products. These ingredients are the core resource for Haigh’s as they are a one-product company. Ens uring the same quality and consistency throughout their products relies heavily on their raw ingredients. Recipes are provided through the shop, highly builds the brand.Recipes for different chocolate desserts are complementary for customers. All manufacturing equipment is of high standard to produce the high quality and consistent chocolate. Intangible Haigh’s has a team of experient chocolate makers and retail staff that bring their intimacy and skills together to build a dynamic company and retail know how. Their innovation towards sustainable packaging and creating awareness about Australia’s endangered savage the Bilby has been a significant resource. some(prenominal) the tangible and intangible resources all result in helping to promote value adding activities and an overall profitable company with a strong brand image. The Internal Factor Analysis Summary (IFAS) is in Appendix 2 5.Strategic Factor Analysis Summary (SFAS) External Factors| Weight| Rating| bu rthen Score| Comments| Opportunities| New innovation and in advance(p) technology| 0. 05| 5| 0. 25| look the company in production efficiency and reduce costs. | Current stable economic growth in Australia/ consumers’ confidence| 0. 04| 3| 0. 12| Reinforce the spending of consumers in discretionary goods. | Availability of materials/suppliers| 0. 04| 4| 0. 16| Lower the bargaining power| High demand in Asian market| 0. 03| 3| 0. 09| Open up new market/ expansionary | Threats| Extremely competitive environment| 0. 06| 5| 0. 3| Need to be more innovative| Increase consumers’ health consciousness| 0. 3| 4| 0. 12| Decline the demand of consumers for high sugar, cholesterol, fat products | Various substitutes/Low switching costs| 0. 05| 4| 0. 2| Decline the sale revenue, brand loyalty| Government regulations| 0. 02| 1| 0. 02| Costly, create limitations| Natural disasters | 0. 02| 2| 0. 04| depression the price of raw materials| Increase in costs of raw material/ costs of advertisings/ labors | 0. 04| 3| 0. 12| Increase products’ price, the company might have to pass these cost to consumers| Strength| History| 0. 02| 1| 0. 02| vast history of quality and consistency strengthens brand image and customer loyalty. | Quality products| 0. 05| 5| 0. 5| Uses high quality raw materials to produce the finest chocolate and is very consistent with the level of quality for either product range. | Customer service| 0. 05| 5| 0. 25| Highly trained staff in providing a high level of customer service, enhances brand image and reputation. | good control over production and distribution| 0. 05| 4| 0. 2| Allows Haigh’s to ensure total quality and consistency over every product manufactured and distributed. | Diversification of products and prices| 0. 05| 4| 0. 2| Broadens target market. Ability to curl up a large number of consumers. | Economic factors| 0. 02| 2| 0. 04| There is no significant decrease in sales during times of economic decline. | Env ironmentally sound| 0. 02| 3| 0. 6| High focus on the environment using environmentally friendly products and distribution methods. Creates awareness of the endangered Australian native Bilby. | Packaging| 0. 02| 3| 0. 06| Uses a cost effective approach while still maintaining a premium and luxury brand image. | Online store| 0. 03| 4| 0. 12| Enables distribution of products to reach a broader range of consumers who are not within the neck of the woods of store locations. | Brand Image| 0. 04| 5| 0. 2| Key to building long lasting customer relationships and for attracting new customers. | Weakness| Market entry| 0. 04| 3| 0. 12| Easy for competitors to enter market, relatively low costs to set up retail store. No outside executive team| 0. 04| 2| 0. 08| Haigh’s being a privately owned family company has not outside team, which may affect decisions and growth. | Raising capital| 0. 02| 2| 0. 04| | One product company| 0. 05| 4| 0. 2| Through prolonging their product range th eir could therefore expand their target market thus increasing profits. | Shop locations| 0. 05| 3| 0. 15| especial(a) shop locations, limiting the availability to consumers. | Marketing| 0. 07| 3| 0. 21| Marketing is through in-store and word of mouth. Marketing increase could create a larger customer base. | Total weighted score| 1. 0| | 3| | 6. Current strategic 6. 1 Business-level strategicWhen the company has determined its mission and vision, analysed the external environment and recognised internal strengths and weaknesses, management has to select appropriate strategies. To demand strategies should generate a competitive advantage in order to maximise the market value of the existing owners equity (Hilier et al. , 2009). Business-level strategies, functional-level strategies and corporate strategies are the function in the system management. The main focus of Business-Level strategy is deciding which product or service to offer and how to distribute it. It is clear tha t Haigh’s chocolate focuses primarily on differentiation as its Business-Level Strategy. Own production lineAustralia does not have a operable cocoa growing industry so the beans are imported from overseas. Haigh’s is a family business that is small enough to take delicate care in each process to ensure that they deliver the shell quality chocolate. They protect their production line from getting the best cocoa from Europe and using their own chocolate manufacturing before distributing to their own retail stores, making this a good example of product differentiation, hence the higher price. At Haigh’s chocolate store, the tell product is the entire service, the quality chocolate and the experience in the store, not entirely the product directly purchased. Product DifferentiationUnlike cost leadership strategies, product differentiation aims to produce goods and services that customers perceive as being different in authorised shipway. To build a successful product differentiation strategy, it is key to be able to continuously and consistently upgrade the severalize features. Haigh’s has approximately 250 different product lines that rotate throughout the year (Natalise, 2012). The different stores in different regions have their own preferences and are able to produce their own chocolate whole tone according to the differing demands on their customers. Delivery system Haigh’s chocolate also offers delivery, costing an excess step determinate upon the weight of the chocolate.This can be very favorable for customers as although the cost is quite high, customers are able to choose the Haigh’s product as a gift for others due to the high quality of the chocolate. Haigh’s should look to implement more control over this delivery system with the potential to include dry ice or other temperature controlled delivery vehicles to ensure the chocolate is kept at its high quality during the delivery process. Differ entiated customer service To build up customer loyalty to the company, Haigh’s chocolate is able to create a differentiated service for them. We treat everyone with respect whether they are coming in for a $1. 20 chocolate frog or a $ carbon box of chocolate. We give a world class experience. (Orman, 2012).In addition, around 40,000 customers visited Haigh’s chocolate every year, Haigh’s is able to give a different customer experience centred around the quality of the chocolate and encourage many customers to experience new or different chocolates but offering a free chocolate factory tour with samples. 6. 2 Functional-level Strategies Functional-level strategies consider a companys ability to attain â€Å"superior efficiency, quality, innovation, and customer reactivity” (Hanson et al, 2011). Haigh’s chocolate also implements fly the coop thinking process for the manufacturing strategy which enables to derogate non-productive activity and doin g it right the inaugural time. This strategy has been credited as a significant reason behind the recent success. (Austin, 2010) ProductionConsidering the production and due to the large number of products, they are able to spread high meliorate costs of warehousing and delivery to the retail stores around Australia. Moreover, learning effects are stable due to a consistent management, considering the order processing, Haigh’s chocolate is working very efficiently, too. High-quality automated chocolate factory increase the functionality of bringing the product to the end-user vastly Marketing From a marketing perspective, Haigh’s chocolate is the family company but applies a very efficient branding strategy. intimately branding strategies are important for a business, because brands represent â€Å"consumers” perceptions and feelings about a product” (Jager, 2010). The company was able to build trust in Australia.Haigh’s chocolate is updated onl ine oft and efficiently, on the other hand due to the small number of the retail stores available around different field in Australia, they are given different advertising camping to keep customer loyal and engaged. Furthermore, Haigh’s chocolate also focuses on improving the brand awareness. Customer reactivity Customer responsiveness includes knowledge and realisation about what the customer call for (Siegel, 2002). Furthermore, it is important not to compromise long-term profitability. overlord customer responsiveness will be achieved through superior efficiency, superior quality and superior innovation (Hansen et al, 2011).Through Haigh’s website, the design enhances their focus on customer needs and assists the company to detect better ways to fill them. Haigh’s chocolate is always looking for a new flavour of chocolate to fill up customer needs, making a innovation of chocolate is the way to keep customer retentiveness coming back. Haigh’s chocolate store is also focused on providing a different theme at different periods to impress the customer in-store experience. Haigh’s chocolate is doing amazing job on their windowpane present to attract customers, such as Sydney CBD store always has an eye-catching display to customer who walk past the store. 6. 3 Corporate Level strategiesConcentration on a single business The corporate strategy of Haigh’s chocolate is concentrated on a Single Business. Haigh’s chocolate focuses on its new technology, managerial and customer demand to stay in the strong competitive environment has made the company famous throughout Australia. Haigh’s chocolate makes quality chocolate through new technology introduced in their chocolate factory. The use of only the highest quality ingredients make sure the customer enjoys the best quality chocolate. Haigh’s believes in quality from start to finish. Haigh’s chocolate comes from the first pick of best co coa beans in Europe and deliver the best raw material from the start.Haigh’s has a large variety of chocolate ranging from small chocolate frogs up to $ ascorbic acid gift hampers, there is a huge range of different chocolate varieties with a great price range to suit all customers budgets. There’s something for everyone in our shops (orman, 2012). Haigh’s produces their own chocolate in their factory located in Adelaide. Through only producing one product it allows the company to heavily focus on its managerial, financial, expert and physical resources in producing only chocolate. dwindling integration Haigh’s chocolate is considered as tapering integration, for example Haigh’s chocolate imports the raw cocoa beans from overseas.Comprised of a chocolate maker and a transport company to arrange for the transportation to either one-on-one customers in the case of online purchases or to retail shops, therefore the company has control of the whole process to ensure that their customers get the highest quality and freshest products. Using their own company supplier gives better control over the inputs and outputs in the operation. This control ensures that the Haigh’s chocolate family brand maintains a level of quality that it would not be able to guarantee if it were using suppliers that were not owned by the company. A strong level of quality control, and as such they can be certain that every part of the production process is line up to the aspect of Haigh’s chocolate.Its vertical integration has built strong barriers to entry, which enables to protect its product quality and make it costly for a company to enter the industry. International strategy Haigh’s chocolate has no planetaryististic market so far since they have failed get into the Nipponese market due to the certain issues such as pricing and developing new products for a different market. A further fight down from the company is expecte d in the undermentioned few years; however the lacquerese mistake did cost the company a lot of money. A push into the Asian market, most likely to china or India, is expected in the next few years due to the high potential of growth in these markets with the potential recovery of the Asian markets. 7. Recommended strategies 7. Business-level strategy The business level strategy is ‘an integrated and twin(a) set of commitments and actions design to gain a competitive advantage by knocking core competencies in specific, individual and product markets’. The chase recommendations for Haigh’s will effectively tapdance their core competencies. (Hanson et al, 2011). The key issues include what products and services to offer consumers, how to manufacture their product and how they are going to distribute their product’. (Hanson et al, 2011). These areas have been effectively obtained by Haigh’s however needs further enhancement and developing to im prove and grow the brand.From analysing Haigh’s current business level strategies it has been identified that Haigh’s is strongly focused on differentiated products. This has been a major strength for Haigh’s focusing solely on this model, and targeting a specific target market. It is strength however in order to further expand the brand, broadening their selected target market would be highly beneficial and profitable. The implementation of the differentiation strategy has lead to a sustainable competitive advantage. They are one of the highest quality chocolate companies in Australia and need to continue with this strategy in the future to continue with the growing success and profitability of the company. shut in new cost competitive product lineHaigh’s is a one-product business, therefore making it difficult to expand their target market and reach different groups of customers. Through implementing a larger product range it would be highly beneficia l and profitable for the company. The brand image that Haigh’s currently has is one of very high quality. Therefore products need to be introduced that are related and at the same standard. Products that could be introduced into the business would include. evade books, chocolate cooking utensils and serving plates. Chocolate cook books should be sold which would press customers to cook using Haigh’s chocolate. Haigh’s could also release their own cookbook from using the hundreds of recipes they have offered in store over the years.Cooking utensils such as chocolate molds, tempering machines, chocolate kits etc. Through adding these extra products to their product range it would highly boost sales and create a higher consumer intimacy for the brand. The implementation of these extra products to the line would not be a difficult task as they have most established areas such as distribution, retail outlets and staff. Haigh’s would just need to find suppli ers for the products. Differentiated customer service Haigh’s customer service is an area that is highly successful and profitable to the company. Haigh’s creates a differentiated service for customers that is very unique to their company.This area within the company is recommended to remain at that same level of quality. Customers are treated with extreme respect no matter what you are spending within the store. They provide a ‘ world-class experience’. Upon purchase they are handed a chocolate in a white glove. This encourages customers to experience new or different chocolates. Haigh’s does need to focus on this area as they must ensure the quality and consistency of their customer service remains the same over time, and throughout all stores. It is highly important as this may determine weather condition or not customers return to a Haigh’s store. Delivery system Haigh’s chocolate does offer delivery, which does cost extra determi ned by the weight of the chocolate.This is convenient for customers who live outside the region where Haigh’s does not have a store. The additional price of delivery is quite expensive. As Haigh’s chocolate is expensive this extra cost means that it is not a preferred method for consumers and is not a highly profitable area for Haigh’s. It is also hard to transport packaged chocolate, due to temperature requirements. Haigh’s currently operates in 3 states in Australia. Victoria, South Australia and New South Wales. In the future Haigh’s should look at expanding their retail stores to other states and territories including, horse opera Australia, Northern Territory, Queensland and Australian capital ground.Through having retail stores across every state and territory across Australia it would be highly beneficial. It would expand their brand and customers. In order to become a more profitable business, Haigh’s needs to expand their store lo cations and introduce a large number of new consumers to the company. This process would initially be very expensive, however upon establishment it would be highly profitable to the company. Their main core competency is that of production and good quality chocolate products. Their quality and consistency of production, which has remained at the same level for many decades. At the retail end, their high quality packaging, shop design and product design is a major expertise of Haighs.Haighs needs to focus on their core competencies and effectively advertise to their selected target market to create more awareness about their brand and products. The recommended strategies will exploit Haighs core competencies and will help develop a stronger brand. 7. 2 Functional Strategy * Efficiency Keep practising the execute production Haigh’s chocolate so far has applied well significant strategies to maintain their efficiency in the manufacturing process. As can be seen, Haigh’s has adopted the lean production with the attempt to eliminate waste and to cut down non-productive activity and errors of products (Austin, 2010). The lean production also assists the company in using efficiently resources of labor, materials, space and time.It is recommended that anyway continuing to practice the lean production, Haigh’s should start to analyze and focus on what they can do best or what product lines have more hobby from consumers in order to maximize productivity. modify relationship with supplier of key inputs The price of raw inputs like sugar and cocoa can be highly quicksilver(a) due to uncertainties in the external environment such as weather, season, industry competitors or global economy. Contracts with suppliers will help the company to guarantee the price and availability of raw materials if any unpredictability events might numerate in the market. Start yielding the learning effects to improve labor productivity culture effect will help th e company in diminishing the cost of production per unit as more output will be produced per craunch unit over the same amount of labour hours’ input.The learning effect not only requires labours but also managers to be involved in the production process. Managers will get used to with the process and be able to use the resources and arrange the production process more efficiently thus leading to more output for the same amount of input. In order to carry out the learning effect, the company needs to start with comprehensive training program that enables their employees to answer multi tasks within each store such as cashiering, stocking and sales presentation. When staffs are limber with the tasks they can do, the retail store could reduce the cost of labour. Being more fillip in marketing plans Effective marketing will help the company to clutch larger market share.Haigh’s has been carrying out their marketing strategy based on in-store promotion and word of mout h. This strategy assists Haigh’s in saving cost; however, the company has not represented a scarce market share in the industry. For example, with consumers who live in suburbs of NSW where Haigh’s stores do not exist, they properly are not aware of the brand and are not impulsive to travel too far to purchase the products that they would get conveniently from local supermarket. The roughhewn marketing tools would be applied to singe new interest in existing product lines including social media and free gifts interior packaging, event sponsorship or taking part in food expos.For distribution channel, Haigh’s also can extend their supply to large purchasers such as up-scale hotels that require high quality products rather than just focus on individual buyers. Haigh’s premium products will be desirable for five-star hotel market. With this channel, Haigh’s will be able to sell larger amount, which would create economic of scale for the company. * Innovation Catch the consumers’ trend Failure to seize the consumers’ trends might lead to failure of the business. Consumers nowadays are having more awareness of health and nutrition in consumption decisions. In order to satisfy that need, Haigh’s need to be more innovative about the low-fat and low-sugar chocolate segment.Furthermore, Haigh’s also can reduce the portion size of their product lines by producing â€Å"a small version” of original products in order to lessen the calories intake of consumers. It is also necessary for Haigh’s to promote the benefits of cocoa and bleak chocolate to health in particularly for heart disease and antioxidant protection. complete and free trading are also necessary movements for Haigh’s to raise consumers’ interest in the company. Extend into cafes The expansion into cafes might help Haigh’s to create a new product range. The innovation of cafes based on chocolate beverages and desserts will remark a turning point for the business. It not only helps Haigh’s to boost the sales of chocolate but also gives Haigh’s customers a new experience. * Customer responsiveness Building a strong brand loyaltyHaigh’s chocolate has created a great customer service by training staff and offering to them an intensive knowledge about products and branding. However, Haigh’s has not strongly focused on building brand loyalty. It is necessary for Haigh’s to engage and maintain the relationship with loyal customers by providing member cards, discount cards for large purchases. By implementing the loyalty programs, Haigh’s customers will feel they are valued. Moreover, with the discount promotions, customers might consider to buy with bigger amount in order to get more discount; as a result, Haigh’s could increase its sales revenue. Being more conscious of baby boomers segmentAs aging population in Australia is occurring faste r, Haigh’s is required to take more actions in meeting the demand of this segment. snub for senior is one of the options that Haigh’s could apply to attract more elderly people. acquiring connected with consumers through social network Haigh’s has been successful in using the widespread of Facebook to engage with their consumers. In their Facebook page, a wide range of products has been introduced and received variety comments and responses from consumers. It is also a great marketing tool for Haigh’s. However, it is needed to exploit more the potential of social network and blogging community in strengthening the relationship with consumers.Haigh’s should set up more surveys and feedback pages in order to know what are best-seller products, what are their drawbacks, what consumers want and how to satisfy their needs. The creation of â€Å"make your own flavour” game would be applied in their Facebook page, which allows browser to create an d mix own chocolate flavour. It would be a chance to let consumers knows that the company values their opinions and interests. Moreover, Haigh’s will also have more ideas in developing their product lines. 7. 3 Corporate strategy People always want new, innovative products. There are plenty of similar products existing and new products developed every single day, which gives customers various options to choose. Therefore the company may easily experience change of consumer loyalty, especially for adolescents.Chocolate is an $83 billion a year business, which makes the industry’s value larger than the Gross Domestic Product (GDP) of more than 130 nations on orb (CNN, 2012). While they have expanded its business for almost a century, they only have 13 stores in Australia and have not expanded internationally. Their products are highly known in Australia as being of very high quality. However, Haigh’s Manufacturing represents only a small part of the Australian ch ocolate market. The Australian chocolate category is clearly dominated by large international players like Kraft Foods, Mars, and Nestle. Haigh’s best estimate based on industry data is 1. % of the total Australian chocolate market by turnover, a smaller portion by volume (A E HAIGH PTY LTD, 2011). In order to expand and grow the company some strategies are suggested: Tapered vertical Integration Vertical integration is commonly used in the firm’s core business to gain market power over rivals. Market power is gained as the firm develops the ability to save on its operations, avoid market costs, improve product quality and, possibly, protect its technology from imitation by rivals (Dallas Hanson, 2011). Since 1915, Haigh’s Chocolate carries out tapered vertical integration as they have controlled the whole process from raw materials to the consumer value chain.This has enabled the business to create the highest quality for its products and enabled them to prote ct the product quality. The company has built its own outstanding retail network. This strategy needs to keep up to protect its product quality and its long history. However, it will not be able to make continues growth in the long term as new international competitors keep entering into the market and strong international competitors have sedulous the markets. Related diversification Haigh’s chocolate does not use related diversification. It is suggested to use related diversification in open chocolate cafes in Australia, which allows them to grow their market share and reputation faster.Related diversification allows a company to swap complementary skills and create value through economise of scope. Haigh’s Chocolate has considered it but decided against it for now as they believe that is not their strength (Christina, 2011). There are some international chocolate cafes in Australia including Max Brenner, Lindt, Guylian and The Chocolate Room. One of Haigh’s strengths is breadth of its product range available to customers and it is even wider range than those international competitors which run chocolate cafes in Australia as well as global (Christina, 2011). All products can be used at Haigh’s Chocolate cafe like the competitors.To differentiate, one of its current product, dark chocolate coffee beans which 100% Australian grown, for coffee lovers can be used for its coffee at the cafe and the cafe can be operated as a chocolate bar which combines a bar and a shop allowing cusomter to experience purchasing some their products at the chocolate cafe. In addition to this, buidling a solid training system for employees and developing of chocolate products such as chocolate brownie, chocolate cake can be implemented for a long term strategy of chocolate cafes. Moreover, this related diversification helps find out the latest consumer trends and behavior much more easier and also enables to advertise its new products or promotions at lower cost. International StrategyInternational strategy has been suggested as a possibility for further growth of the company. Asia market Europeans account for almost half of all the chocolate the world eats, according to the International chocolate Organization. (CNN, 2012) However, barriers to entry are too high in Europe as there are diverse strong competitors. Although the Asia market is smaller compared to Europe, Asian markets are expected to hold a 20 per centum share of the global market by 2016. Chocolate sales in China are expected to rise 19 percent to $1. 2 billion, India expects to see a 7 percent jump to $633 million dollars, and in Indonesia are expected to rise 25 percent to $1. billion dollars, ballooning to some 2 billion dollars by 2015 (CNN, 2012). Japan is Asia’s largest consumer market for chocolate confectionery with per capita consumption rate of about 1. 8 kilos (World Cocoa Foundation, 2011). Therefore the Asian market is a sutiable entry for Haigh’s Chocolates. The first entry for Haigh’s Chocolate can be Japan. Transnational strategy A transnational strategy is most able strategy for Haigh’s Chocolate as it helps to achieve both global efficiency and local responsiveness. They have not entered international markets since they had failed entering into Japan market due to pricing and developing new products for new market.Therefore, Haigh’s Chocolate needs new products for different markets. For instance, Nipponese consumers prefer softer and less sweet products and prefer low-priced individually intent products are increasing (World Cocoa Foundation, 2011). Green tea, sesame flavours, individual wrapped products can be developed for Japanese markets. Haigh’s Chocolate’s are rated ‘green’ in Greenpeace True Food Guide, Signifying a clear policy on excluding GE-derived ingredients, including oils derived from GE crops, and animal products from animals fed on GE cr ops while other competitors such as Nestles have been rated much lower due to some criticism (True Food Network).Consumer awareness of environment-friendly products is expected to grow dramatically in the next five years (Markets and Markets, 2011). The company’s products are considered to be in a higher price range with diverse scale of products in the global market. The company can enter into international market with its clear policy as consumers seek healthier, higher quality of ingredient for health while providing different types of products for different markets for both global calibration as well as mess Entry mode: Strategic bond certificate Strategic alliances allow companies to share the risks and the resources required to enter international markets.Furthermore, it can alleviate the development of new core competencies that land to the company’s future strategic competitiveness (Dal\r\n'