Rocky Mountain Chocolate Factory is an upscale confectionery manufacturer and specialty store located in British Columbia and Canada. The company offers a wide variety of confectionery products and an extensive line of premium chocolate candies. It is a one-stop shop for premium chocolate candies and other confectionaries, which are distributed through its many franchise locations. The company was founded in 1981 by Frank Crail, now the company's President. The stores are stocked with approximately 300 premium chocolate candies and other confectionery products, manufactured in its factory using proprietary recipes unique to the candy maker. These recipes are developed by the master candy maker. Rocky Mountain Chocolate products include an assortment of caramels, clusters, molded chocolates, creams, truffles and melt-a-way chocolates. Individual stores use traditional cooking utensils to offers a wide variety of confectionaries and a comprehensive variety of candy cuisine tools to prepare a variety of confectionaries and chocolate items in full view of the customers.
Supply high quality or highly marketable premium chocolate candies and other confectionery products at affordable prices for all the consumers.
Furnish the finest choice of quality chocolate candies and other confectionery products to maximize profitability and raise the market share so as to enable the company expand by providing the customers with a premier market for the products.
Focus on the employee's loyalty, cleanliness, equity, honesty and integrity, impertinence, consumer service, high dedication, healthy criteria and good standards of quality to promote a long term beneficial relationship between the company and its customers, employees, and investors.
Rocky Mountain Chocolate Factory is in the process of expanding their operations. Having grown its base in USA and Canada, the company needs to expand by venturing into different markets so as to increase their market share and increase revenue.
Brazil, being the largest and the most populous nation in South America creates a good opportunity for Rocky Mountain Chocolate Factory to increase its market base. The highly industrialized and booming Brazilian economy will provide a high demand in the food manufacturing industry.
Rocky Mountain Chocolate Factory is planning to introduce a new product/service in Brazil. Some Globalization considerations Rocky Mountain Chocolate Factory should take into consideration include
Characteristics of target market
Characteristics of target market include GNP/capita, GNP/capita growth rate and the market Size. The Company has to strategically choose this specific location by considering the GNP/ per capita growth and GNP/ capita income (Hollensen, 2007). Analysis of the following shows the current and predictable future of this countries/ states. It is also important to consider the size of the market that the company intends to cover.
When choosing global markets, Market screening should be carried out to establish the following; Basic need potential, Exchange rate trends, Import restrictions and Price controls (DePalma, 2002). In addition, it's important to establish the government and public attitude toward buying products or services being offered by a foreign/ international establishment such as Kudler Company. It is also important to consider the Size, number, and financial strength of competitors (DePalma, 2002).
Market screening should also be carried out to establish Socio-cultural forces such as, attitudes and beliefs, languages and education as it affects Kudler's type of business
Rocky Mountain Chocolate Factory export marketing strategies should indeed inject extensive advances through leading edge technology delivered through an international network of facilities managed so as to strategically capture all advantages of a rapidly developing market that is seen by many as difficult to enter, let alone winning.
Strategy & Implementation
It is possible to invest In Brazil without a local legal entity for your proposed investment. An investor can get into the Brazilian market through an intermediary, they can choose to either have an agent to sell their product to their preferred consumers or set up a representative office. If a company wants to invest abroad a substantial amount of investment is needed. To help reduce the cost involved Rocky Mountain Chocolate Factory can choose to indirectly export by identifying an intermediary firm based in Brazil to act as an agent and sell their product in the overseas market. Rocky Mountain Chocolate Factory will not be actively involved in the marketing and other activities involved neither will it need to understand the Indonesian market.
Distributors are set to buy and sell a range of company goods in a specified geographical in this case selling of Rocky Mountain Chocolate Factory products in Brazil without having to set up an organization in the country. This will only require establishment of an office in Indonesia for marketing, distributing, better control and understanding of the customer needs.
Direct exporting of Rocky Mountain Chocolate Factory products to the Indonesian market could be another mode of entry. Wattle (2001) argues that direct exporting does not require involvement of many resources like human capital or infrastructural change in the set up of the company. It entails increased production so as to accommodate a larger market. In this case Rocky limited will result into increasing their production according to their Indonesian market needs and availing the products into the markets.
However setting up a company in Brazil would be more effective since the company will be able to retain full control of the market as well as acquire full and timely market information. It becomes easy to understand the specific problems and needs of the customer in the markets. Production costs are lower as compared to exporting since there are no tariff and non tariff barriers and fees involved. There also no problems related to exchange fluctuations.
Obtaining a license with Brazilian authority will allow Rocky Mountain Chocolate Factory to operate in the country. Wattle, 2001 describes a license as a commercial contract that enables an organization entry into a market that would otherwise be closed by tariffs, government attitudes and other barriers. A license gives the right to use a brand name, trade mark, patent or a copyright. A license gives a right to produce within the country as well as seek technical and market advice and assistance. Licensing does not require much investment except for the normal continuing cost of maintaining the agreement.
Franchising is another form of investing in an abroad market. According to Adams, (1996) a franchise is a detailed commercial agreement between two organization describing the expectation of each organization
In this case an organization spots another firm in its line of production and signs a commercial agreement. The foreign company could use the oversea company name in their operation.
Franchising as means of investment does not require much capital and the firm still retains the control of the business operation. Once brands and formulas are properly designed and executed, the franchisor (Rocky Mountain Chocolate Factory) is able to expand into the Indonesian market.
Although Brazil does not placed barriers on entering their market, franchising would be a good option since they do not require legal consideration such as permits and licenses. Through franchising a firm is relieved from any liability from the property that is owned by the franchisee Wattle (2001). The franchisor, in this case Rocky Mountain Chocolate Factory will be cushioned from any tax and liability and yet gets a share in the income generated. The local firms will have sufficient expertise and knowledge on the local market that will help Rocky Mountain Chocolate Factory to soar into greater level they wouldn't have been without their help. Franchising is thus good mode of entry for Rocky Mountain Chocolate Factory limited into the Brazilian market as they can be helped identify the local market needs
A merger refers to the concept of two organization coming together to engage in business activities as a single entity. Wattle (2001) merging can be between organization in the same industry like in this case Rocky Mountain Chocolate Factory merging with an organization in candy and confectionery industry in Brazil so as to run their business activity together and reach to a larger market while still using the same production methods and formulas.
According to Bruner (1972) a corporate merger refers to the coming together of two organizations assets and liabilities to form a single business entity. This combination of two different business entities helps minimize the cost associated with the running of the ventures. Merging can also be between different companies that are not in the same industry line. At some instances it may prove hard to get a company in the same industry willing to merge out of their competitive nature. Two different entities in different production lines can come together to operate one another this helps in market differentiation. Each organization will tend to benefit from the clientele of the organization and thus increasing their market share. When Rocky Mountain Chocolate Factory merges with other companies it creates synergies out of the increased economies of scale associated with increased purchases he effect of activities of a merger are more than the sum of the outcome of each of the organization on its own and thus a merger results to increase revenues.
A merger can also help in reducing the degree of risk. Any unfavorable market condition facing any of the organization in the merger is cushioned by the other company. Coming together of different business entities increases the organization market power that makes a company to behave like a monopoly and consequently barring other companies from venturing into the market.
Brown (1963) defines acquisition as process of buying or assimilating of small business by a larger organization a smaller organization that is the verge of extinction can be assimilated by al larger firm and learn of it production formulas. Rocky Mountain Chocolate Factory should identify such organization in the Indonesian markets and seek to perform business with them. Despite such companies not doing well they understand the market and its specific needs to the benefit of the organization intending to venture in this market.
Foreign Direct Investment
Rocky Mountain Chocolate Factory can also enter the Brazilian economy through Foreign Direct Investment. This is where a foreign company or entity owns the means of production of a particular good or service in an economy. Rocky Mountain Chocolate Factory can construct a chocolate and candy manufacturing plants in Brazil. The company can also merge with or gain acquisition of Brazilian companies that are players in the chocolate and candy manufacturing industry and together or as a different entity gain more market power and have a bigger share in the Brazilian economy. Rocky Mountain Chocolate Factory can also identify a successful and strategic company in the Brazilian economy and then gain a stake big enough to acquire control and thus be an active participant in the Indonesian economy as far as water purification is involved. This can be through buying of shares in the company in the stock market. This should however be done with caution and with an informed decision to prevent the risk of falling into or acquiring a company without a future.