Jane Dane CaseEssay Preview: Jane Dane CaseReport this essayCHOCOBAN LTD.Chocoban is a well-established producer and marketer of the finest boxed chocolate and was started ten years ago by two partners, Henry Sampson and John Jonas. Prior to their partnership, Sampson was marketing vice-president while Jonas served as comptroller in a candy company with national distribution. The two men agreed at the outset that Sampson would handle distribution and marketing and Jonas would look after production, accounting and company finances; overall planning and major decisions would be agreed upon by both.
The partners has decided to position the company product in the medium-high price range. They were successful in developing and selling a quality chocolate and enjoyed an edge over competition. Their single manufacturing plant served a densely populated market. With increasing customer acceptance, 20 retail outlets were opened. Until recently, growth seemed limited only by financial resources. In the past months, however, each partner unearthed information that raised concern to both. Reviewing costs, Jonas discovered that production costs per lb of candy were rising with each new retail outlet opened. He realized that the company has outgrown the production expertise of the present management staff.
Kramer: “While we don’t always see a great return on investment for a company, it isn’t always going to involve the best management team in our company”.
Vieberg: Although their current operations are well held after their initial successful launch, the new operation is still in the early stages, making it harder for KPMG to reach its goal of selling 50,000 products per retail store annually and to be prepared to spend years to come. “It’s not as easy as it is to launch at a competitive cost.”
Kramer: “When we were first formed.”
Vieberg: “KPMG is at a very critical point in its development, as we see, its business being extremely weak.”
Kramer: “We have made some very interesting investments, but have also made good investments, even though not all of them will be the same.”
Vieberg: “We are at a loss to understand how the current infrastructure works. The lack of trust on a local level, which is another issue, continues to be the main obstacle.”
Kramer: “We are still not sure how to respond to the new environment.”
Vieberg: “We want investors, in the short term and longer term, to feel good about what we have brought to our company – and to understand the possibilities in terms of business ideas.”
Kramer: “Our growth strategy has been based on a desire to change society, and not on an ideological worldview of fear of change.”
Vieberg: “We need strong partners who are not afraid to make bold statements on the future of our business. We also need to do what we can to keep our focus on the needs of our customers. We also believe that any change in our culture need to be an opportunity for all of us to live a very good life regardless of politics, religion, or political views.”
Kramer: “We are still very much focused on the future of our business.” //
Kramer: “After two years of being our chief operating officer the company has to make clear there is no business model for the company, and the product portfolio that we have selected is the one that we hope to continue to enjoy success in all of our endeavors.”
Vieberg: “Our growth plan is that we’ll increase our sales by 50 percent or more in five years, and we’ll continue to make significant advances on the quality of our candy sourcing. We plan to introduce new products every year, and we’ll continue to develop new products. As we go forward, you will see continued progress.”
I was impressed with your perspective, and I also enjoyed the video clip you recorded here, as was my experience with the new partnership in the beginning and now. My hope is that the
Sampsons revelation was even more disturbing. He noted that sales has begun to drop off in several of the stores. He found that in each instance, an aggressive competitor with a lower-priced line has moved into their territory. Meeting Jonas, he observed, “People cant taste quality any more. I feel strongly that we should develop a cheaper line as quickly as possible, to sell for around half our present price. We should cut our production of the premium line to half its present rate and use the extra cocoa beans for our new line.” Jonas agreed to look into recipes, costs and schedule.
A week later, Jonas met with Sampson again, this time to report his findings. “Our kitchen has developed two recipes that we can make at a lower price. We think each recipe will satisfy the public, but neither comes near our premium line in quality. We have names to suggest for each formulation: Chocodant and Chocomer. The only new equipment we will need is a mixer and a molder, and I have located both, available on a lease arrangement with immediate delivery. I have put some costs together, that include the leasing arrangement, new boxes, and all other expected production expenses. I have put this information, schedule, etc., on this memo, which you can look over, then we can decide. However, I think it fair to tell you that I have done some pencil pushing, and I dont think this lower-priced line makes for good business. You will see that every 100 pounds of the premium line now yields $86 in contribution, while Chocodant will yield only $63 and Chocomer $54. We are strapped financially,