113(4). write 600 words case analysis.

write 600 words case analysis. please read the requirement very carefully. everything has to be from the given case, no external sources are allowed. This task has to be finished in 3 hours. thank you!!


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WPC 480 – Burgman
Case Analysis Paper Format
Each case analysis paper submitted should include five sections:
What is the key problem or challenge facing the firm that you will try to resolve
Your external analysis (the industry and economic environment)
Your internal analysis (the firm’s internal resources and capabilities)
Two mutually exclusive alternatives that solve the problem
Your recommended chosen alternative course of action and justification for the
alternative you have chosen
A guideline for case analysis is provided separate to this syllabus will be available on the
first day Blackboard is opened. Case analysis can be no longer than two- to two-and-a-half
pages (single-sided, single spaced, 12-point Times New Roman, 1” margins throughout). Use
the five headings above (those in bold!) for your case submissions. Up to two additional
Appendix pages can be used for supporting information, references, tables or figures. Each
case should be submitted to SafeAssign on Blackboard and should be submitted in WORD.
Please note that I want you to only refer to the case when completing a case analysis and writeup. Do NOT use any other external references for ANY case analysis.
Note that the five case analysis write-ups will comprise a total of almost 40% of your
course grade. Please consult the Grading Rubric for Case Analysis appended to this
syllabus – Appendix A in the Syllabus.
For the exclusive use of S. Zhang, 2018.
AUGUST 4, 2013
Montreaux Chocolate USA: Are Americans Ready
for Healthy Dark Chocolate?
In October 2012, Andrea Torres, director of new product development at Montreaux Chocolate
USA, was poring over data from a recent Nielsen BASES II test. Over 15 months had passed since the
Consumer Foods Group (CFG) of Apollo Foods had purchased the rights to distribute Montreaux’s
European chocolate products in the U.S. as a means of increasing market share, in pursuit of upscale
market segments. Torres was now satisfied with the research and methodology that her New Product
Development (NPD) team had employed to assess market opportunity in the U.S. to date.
A board meeting was scheduled for December 10, at which Torres would be expected to make a
solid, comprehensive, and compelling presentation on the status of the acquisition/assimilation of
Montreaux and plans for the launch of the new product in the U.S.
David Raymond, her division manager, had committed to a set of aggressive sales forecasts that
placed even greater significance on the accuracy and adequacy of the research and its application. As
a result, Torres was carefully and pragmatically evaluating her options: do further product testing,
launch in selected test markets, stage a regional rollout, or launch nationally?
Corporate and Company Background
Apollo Foods, a Los Angeles, California-based, global consumer packaged-goods powerhouse,
offered an unrivaled portfolio of brands, manufactured confectionery, biscuits, snacks, beverages,
cheese, and convenient meals, as well as an array of packaged grocery items for distribution in 170
countries. It reported 2011 revenue of $54.4 billion and net income of $3.5 billion, to which the CFG,
one of four operating divisions, contributed $19.1 billion in revenue and $1.26 billion in net income.
Twelve of the company’s iconic brands generated revenues of over $1 billion annually and some 80
brands exceeded $100 million annually. The CFG, which was responsible for all confectionery products,
managed three of those brands.
HBS Professor John A. Quelch and Professor Diane Badame of the Marshall School at the University of Southern California prepared this case
solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management.
Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons
or entities is coincidental.
Copyright © 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
This document is authorized for use only by Shitao Zhang in WPC 480 Capstone 1 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Zhang, 2018.
914-501 | Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate?
Apollo knew its consumers well and had been successfully feeding their hunger for bold flavors,
easy meal solutions, and “better-for-you” offerings with more than 70 new product innovations over
the past three years.
In June 2011, Apollo acquired the exclusive rights to manufacture and market Montreaux chocolate
products in the U.S. from the well-known Swiss company Montreaux Chocolate Company S.A.
Montreaux had long sought to expand to the U.S. but lacked the resources. Apollo was seeking a
greater presence in the lucrative chocolate market and an opportunity to grow its confectionery share
in the U.S., especially as it enjoyed a number-two position in the global confectionery business, largely
due to products other than chocolate, such as gum and candies. This rights acquisition was the most
expeditious method for both entities to achieve their goals and, given mutual reliance, offered the
opportunity of an enduring and mutually rewarding relationship.
Shortly after entering into the agreement, Apollo had considered the purchase of a chocolate
manufacturing facility in Pennsylvania to support the unique manufacturing processes of the
Montreaux chocolate products and to serve the anticipated growth in Montreaux sales, but decided to
wait until the NPD group provided a definitive launch strategy and timeline.
Apollo delegated management of the arrangement to the CFG, which formed a new division,
Montreaux Chocolate USA, to operate the business. David Raymond, formerly a marketing director in
the New Business Division, was named division manager. He committed to achieving aggressive goals
by year-end 2015, based on Apollo’s successes and marketing expertise and Montreaux’s reputation as
a high-quality chocolatier in Europe. The goals included:
National distribution of the new Montreaux product line (referring to the degree to which a
given product is available for purchase or the percentage of stores carrying a given product)
$115 million in annual sales
Be in the top 25 in revenue (0.60% market share; see Exhibit 1 for volume projections)
Montreaux personnel from Switzerland came to the U.S. and worked closely with Apollo personnel
to develop Montreaux Chocolate USA’s technical expertise. One engineer from Switzerland was
assigned to support Torres for two years, to assist in product development and process engineering.
When Apollo first acquired the rights, it considered marketing the products through Montreaux’s
existing broker network but opted instead to employ Apollo’s large sales force to maximize the
opportunity by leveraging existing relationships. This plan of action would allow Apollo to penetrate
the traditional retail channels, including “big-box” supercenters, supermarkets, drug stores, and
convenience stores.
The Chocolate Confectionery Market
Chocolate is made by roasting, crushing, and refining cocoa beans. Dark chocolate is typically at
least 55% cocoa; higher-quality products contain at least 70%. Milk chocolate, on the other hand,
typically contains a maximum of 50% cocoa, to which milk is added. The higher concentration of cocoa
in dark chocolate is the source of its claimed health benefits.
Chocolate is the most lucrative segment of the global confectionery market, accounting for 52.6% of
the market’s total value. In 2011, Europe captured the largest regional share of the global confectionary
market at 45.2%, with the Americas following at 33.9%.1
This document is authorized for use only by Shitao Zhang in WPC 480 Capstone 1 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Zhang, 2018.
Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? | 914-501
The U.S. confectionery market reported total revenues of $35.648 billion in 2011, representing an
annual compound growth rate of 2.8% between 2007 and 2011. Total revenue for the chocolate segment
in 2011 was $17.664 billion, a 1.9% increase over 2010. The U.S. chocolate market was expected to grow
almost 2% annually through 2015.2
Consumers’ focus on fitness and health in the U.S., which sharpened over the past three decades,
prompted Montreaux Chocolate USA to consider expanding its chocolate offerings to include products
that featured a healthy focus. As the emphasis on healthy eating habits heightened, however, so had
the number of competitors and the rate of new product introduction.
Fishers, Inc., a Dallas, Texas-based firm, was the leading global player in 2011, generating a 16.8%
share of the market’s value. Apollo Foods solidly held second place at 15.4%, with Swiss food giant
Cornelius S.A. following at 9.1%. None of these companies, however, was the leader in the U.S.
chocolate market; that honor went to Lancaster Company, with a 34.8% U.S. market share. Fishers
closely followed with a 34.4% share.
The chocolate market in the U.S. is composed of seven product segments, with the top four
accounting for 94.4% of market value:
Bar/bag/box (3.5 oz.+): $7,149 million, with 7.6% growth between 2009 and 2011
Seasonal chocolate: $4,407 million, with 9.9% growth
Bar/bag/box (less than or equal to 3.5 oz.): $3,479 million, with 18.5% growth
Snack-size chocolate (less than or equal to 0.6 oz.): $2,522 million, with 10.8% growth
Other segments include gift box, sugar-free, and novelty chocolate.3
The overall market for chocolate in the U.S. is segmented by mass market and premium, with the
mass market accounting for 80.3% of sales and premium for 19.7%. The premium segment is further
segmented into everyday gourmet/affordable luxury, upscale premium, and super premium, which
represent 16.8%, 2.2%, and 0.7%, respectively, of total sales.4
Grocery, drug, and convenience stores, and Walmart, collectively sold approximately 45.3% of the
chocolate candy in the U.S. in 2011. Grocery was the largest channel, accounting for 15.8% of sales
followed by convenience stores at 11.7%, drug stores at 9.0%, and Walmart at 8.8%.5
Trends in the U.S. chocolate market in 2011 included:
Premium chocolate products moving to mainstream channels (i.e., supermarkets, mass
Dark chocolate sales benefiting from flavanols—antioxidants that can help to lower cholesterol
and provide cardiovascular benefits
Low-calorie options such as reduced fat and aerated chocolate
Packaging going to stand-up pouches and bigger sizes that appeal to economically conscious
New labeling with terminology emphasizing shareability, portion control, and saving a piece
for later
Increases in pricing attributable to rising commodity costs
This document is authorized for use only by Shitao Zhang in WPC 480 Capstone 1 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Zhang, 2018.
914-501 | Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate?
Consumer Attitudes and Usage
Among confection-eating adults in 2012, chocolate was consumed by 92%, who ate an average of
7.8 pieces of chocolate confectionery per month. By comparison, confection-eating children consumed
less than half that amount of chocolate on average per month, although the penetration of children
eating chocolate was, at 95%, slightly higher than that for adults.6
Chocolate consumption spanned gender, age, and household income groups, with slight variations
in the formats purchased. Women were slightly more likely to eat chocolate than men (94% versus
90%), and higher-income earners were more likely to be attracted to boxed chocolates. The 45–64 age
group had the highest level of per capita chocolate consumption, and that level was increasing. These
consumers were prime targets for premium and specialty chocolates, and the most likely to purchase
chocolate for holidays or as gifts, as well as to spend more on chocolate that they buy for others. This
group was also most likely to purchase chocolate when it was on sale. Consumers increased their
consumption of dark chocolate as they grew older. The “everyday sophisticates” or “bliss consumers”
who bought dark chocolate were typically brand lovers, socially influential, worldly, and more willing
to experiment with new foods. Montreaux Chocolate USA “loyalists” were female, aged 45–64, college
educated, married with children, with household income of $50,000+, concerned about health and
weight, and more likely to purchase chocolate for themselves than as a gift.
What Motivated Consumers to Purchase Chocolate?
Women who ate chocolate were more likely than men to associate it with positive experiences such
as personal reward and mood enhancement. They reacted very positively to new ingredients and
flavors as well as the purported benefits of improved cardiovascular fitness and lower blood pressure.
In contrast, men were more focused on price and would respond positively to practical
characteristics—energy boosters, quick, easy, convenient, and affordable.7
Convenience was a key driver of a chocolate purchase as indicated by three-quarters of consumers
who purchased chocolate confectionery at supermarkets, with fairly equal percentages doing so in the
candy aisle and at checkout.
Women perceived a greater distinction between premium and non-premium chocolate than did
men and identified premium chocolate as a personal luxury that offered better taste and greater flavor
variety. Over two-thirds of premium chocolate eaters believed it was healthier than mass-market
offerings largely because lower-quality chocolate products usually contained artificial flavors, fillers,
or other additives. Moreover, close to 40% of adults preferred mini and snack sizes, typically 0.25–0.60
ounces, to standard bars; given the heightened awareness of health and wellness issues, this preference
may have indicated an effort to control consumption.
New Product Development at Montreaux
The NPD Group’s charter was to achieve national distribution of Montreaux Chocolate USA and
continue to significantly build the chocolate business in the U.S. by developing new product lines.
Given the deliverable expected by senior management by year-end 2012, coupled with the companywide focus on health and wellness, and her manager’s commitments, Torres accepted NPD’s
recommendation to explore the growing dark chocolate category. She and her team subsequently met
with Montreaux’s research and development personnel, who had joined the group from Apollo, and
This document is authorized for use only by Shitao Zhang in WPC 480 Capstone 1 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Zhang, 2018.
Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? | 914-501
their advertising agency to generate ideas for the new product. Out of these sessions came 45 ideas that
all parties agreed merited further testing.
Montreaux decided to partner with Nielsen BASES to quantitatively assess and optimize the new
dark chocolate initiative. Montreaux was keenly interested in understanding the long-term viability of
the initiative, as they were going to invest significant resources in the launch and wanted the initiative
to endure. BASES’s extensive innovation experience had identified the 12 key things that drive
successful consumer adoption of new products and empirically tied a new product’s potential on these
factors to the odds of in-market success (see Exhibit 2).
BASES, a division of the Nielsen company, a large multifaceted marketing consultancy, offers
services that span the new product development process, from early idea screening through launch
qualification of the final concept and product. With the help of these factors and the ability of the BASES
Model to project volume potential of new products prior to launch, BASES would help Montreaux
hone in on the new product opportunity and a strategy that 1) was in line with Apollo and Montreaux’s
strategy for health and wellness, 2) demonstrated strong consumer viability, and 3) would deliver the
financial potential that was strong enough to meet the goals of the team. The team would be able to
trace the progression of the initiative from idea to concept, to product and the BASES team would
consult throughout the dark chocolate development and help Montreaux track against projections into
year-one and beyond.
BASES Idea Screening Test
The first study Montreaux commissioned was a BASES Idea Screening test. BASES offers a low-cost
way to quickly prioritize which new product ideas merit further development. This insight is based on
performance on four of the factors that underpin the foundational strengths of an initiative and could
reasonably be evaluated at the early phase of testing: Distinct Proposition, Attention Catching,
Need/Desire, and Advantage (see Exhibit 2). From this screening Montreaux was able to narrow down
the initial 45 ideas to the 12 ideas that possess the strongest potential and should be accelerated for
concept development, many of which incorporated dark chocolate with fruit.
BASES Snapshot Concept Test
Montreaux understood the need to further prioritize the concept lines based on preliminary
volumetric indicators as well as the feasibility of improving areas of optimization. Thus, the winning
ideas moved to a BASES Snapshot concept test to identify early optimization opportunities and rough
size of the price estimates prior to product development. Each idea was developed into a full concept
via the addition of the concept images, messaging, varieties, and prices. A total of 200 consumers per
concept were asked to evaluate the given concepts that they viewed online and to provide feedback.
No actual product tasting/trial was included yet; the intent was to identify which concepts have the
strongest potential to be tried by consumers in market. The BASES Snapshot identified five dark
chocolate with fruit concepts that respondents considered distinct as well as attractive and relevant.
However,.credibility issues existed due to the unfamiliarity of the new European brand in the U.S.
marketplace. With that knowledge in hand, these five “winners” were selected for further
development. With the inclusion of a line-optimization analysis to better gauge the best combination
of fruit flavors to include, the team confirmed that blueberry, pomegranate, and cranberry should be
among the top flavors. From this testing the NPD group gave top development priority to two dark
chocolate with fruit concepts, one with 70% cocoa and one with 90%.
This document is authorized for use only by Shitao Zhang in WPC 480 Capstone 1 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Zhang, 2018.
914-501 | Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate?
Montreaux’s R&D team then moved on to product development …
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