roger%27s chocolate
TRANSCRIPT
Salyna AnzaRoni Baghdady
Abdulrahman BaothmanErin BourgeousLaura Reales
Suffolk University
Case Analysis
Metric 2006 2005 % Change
Sales $11,850,480 $11,991,558 -7%
Overhead $1,993,306 $846,186 +135.6%
Expenses(Administrative & Selling)
$5,312,985 $5,094,088 +4.1%
Gross Profit (After Interest Income)
$6,466,056 $6,614,981 -2.3%
Net Earnings $891,082 $1,069,326 -16.7%
Dividends $0 ($701,870) -100%
CURRENT SITUATION ON THE INCOME STATEMENT
Metric 2006 2005 % Change
Cash $112,185 $750,948 -85%
Total Inventories $1,543,816 $1,550,631 -.4%
Bank Indebtedness
$186,929 $599,146 -68.8%
Long-Term Debt $1,017,679 $1,411,184 -27.9%
CURRENT SITUATION ON THE BALANCE SHEET
WHERE WE ARE NOW:Current (Liquidity) Ratio: .91Inventory Turnover Rate: 1.01
WHERE WE SHOULD BE:Current (Liquidity) Ratio: 1 or higherInventory Turnover Rate: 6 -12
1. Affiliate with FTD2. Open store in San Francisco3. Improve Production
Open Store in Los Angeles
Timeline
More than triple size of the company
2007
2009
2016
WHY?Premium Chocolate Industry Sales in Canada→ $500 MILLIONPremium Chocolate Industry Sales in the US→ $3 BILLIONHow?1. Affiliate Roger’s Chocolate with the floral industry
by partnering with Florists’ Transworld Delivery (FTD) 2. Open a retail store in San Francisco, California3. Advance production
EXPAND TO THE UNITED STATES
Florists' Transworld Delivery (FTD):• Floral Industry Sales in the US→ $30.3 BILLION • 7 out of 10 people who buy flowers will also buy chocolate• Florists’ Transworld Delivery (FTD) sales in 2007→ $613 MILLION• State generating most revenue to FTD→ California
Start off Regional:
• 2007→ Northern Region of California • FTD Florist Shops in Northern Region→ 30 million
• 2009→ Southern Region of California • FTD Florist Shops in Southern Region→ 56 million
STRATEGIC RECOMMENDATION 1: ROGER’S CHOCOLATE IN FLORAL INDUSTRY
STRATEGIC RECOMMENDATION 2: ADD RETAIL STORE IN NORTHERN, CA
323 Geary Street. San Francisco, CA 94102
Cost: $50,000 for 1,000 Square ft Renovation: $25,000Total Cost: $75,000
Union SquareSan Francisco
How?
• Computer-Integrated Manufacturing (CIM)
• CAM (part of CIM) supports on-site, small-scale, semi automated, sensor-controlled baking.• EASY to achieve customizable,
consistent quality.
• DOUBLES productivity.• Cuts up to 80% of time.• Cuts work in process inventory 30-60% • Decreases design costs 15-30%
STRATEGIC RECOMMENDATION 3:ADVANCE PRODUCTION PROCESS
Cost of Implementation (installment costs included)
Cost: $1.3 Million
FTD AFFILIATE COMMISSION:• Roger’s Chocolate receives 10% of each sale including their chocolate• Revenue of FTD in Southern California 2007→ $80 MILLION• Floral & Chocolate Sales in Southern California → $56 MILLION• Roger’s Chocolate Projected Sales→ $5.6 MILLION
PROJECTED EARNINGS SO FAR:
PROJECTED EXPANSION:
By 2009 Expand to Los Angeles• Average Price per square feet: $220• 500 square feet • Total investment: $110,000
2009 FTD’s projected revenue in Southern, CA→ $90 MILLION- Projected sales generated from flowers and chocolate→ $63 MILLIONRoger’s Chocolate Projected Sales in 2009→ $6.3 MILLION
OVERALL PROJECTED SALES FOR ROGER’S CHOCOLATE$5,600,000 + $6,300,000
$11,900,000
TOTAL PROJECTED SALES
Cruise Ships
• PRODUCTION PLANT located in outskirts of Victoria.
• NEAR VICTORIA CRUISE PORT: Busiest cruise port in Canada.
• MOST popular Cruise Ship occupying Cruise Port: Golden Princess.
• Add Roger’s Chocolate to their Food and Dining Dessert menu as well as Gifts and Services.
• Restaurants in ship: Crown Grill and Sabatini’s.
• Purchase $4,000 worth of Roger’s Chocolate every 3 months.
• $16,000 per year in wholesale sales.
OTHER OPPORTUNITIES TO CONSIDERBMW
• 50 locations in Canada.
• Each location purchases through wholesale $2,000 worth of Roger’s Chocolate bi-monthly.
• PER YEAR: $12,000 PER location.
• 50 locations x $12,000 = $600,000 in wholesale sales