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Godiva Case Study

Essay by   •  November 5, 2010  •  2,799 Words (12 Pages)  •  3,513 Views

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Executive Summary

Strategic Issues, Problems, and Opportunities

Godiva aims at increasing its market presence all over the world. There are numerous issues that stand in Godiva's way, but certain ones need immediate attention. They present themselves in order of importance. First, there is a need in Belgium to increase and maintain their market share. Secondly, as a worldwide company, Godiva must concentrate on the lack of uniformity and inconsistency within its image. With a saturated market, Godiva faces another issue as it lacks the competitive advantage within Belgium that's necessary to expand and capitalize on opportunity. Next, no beneficial balance is struck between automation and handwork in the production of the chocolates. Another important strategy implication is the need for a common advertising plan targeted at the triad regions that takes into consideration the inevitable cultural differences among countries. Pricing policy is another factor for Godiva because inconsistency limits potential in sales. The plan for managing the highs and lows of seasonality are not as effective as possible. The next issue is that Godiva is not maximizing the value of the productivity frontier in the Belgium factory because there is a significant amount of capacity not being utilized. Lastly, trends in the market have a serious impact on Godiva and it would be extremely beneficial to be flexible to these circumstances as a stronger management plan.

Decisions Recommended

The bottom line for Godiva is the necessity for it to revamp its global image. This is the underlying issue throughout the company's case that is overall causing the sales to struggle in the effort to reach profitability potential. As long as inconsistency in image is present the less Godiva will be identifiable and therefore, the weaker its message is across the market. With a more uniform image and stronger message consumers will be able to develop a firm grasp on the company's personality and what makes it stand apart from the rest.

Godiva must concentrate on its unique attribute that will define its character, luxury. With chocolates as an essential for gift giving and the intricate details of Godiva's handmade creations, luxury is the feeling that should apply. This will strengthen the differentiation between the leading competitors and itself, producing a competitive advantage. Between creating uniform boutiques, prices and advertising, the image can become stabilized and reinforced. Specifically this will help alleviate the situation in Belgium where confusion surrounds the Godiva brand and the other European countries that are new to the chocolatier.

Further recommended decisions involve maintaining flexibility in conjunction with the uniformity as market trends are inevitable. With chocolates so closely related to gift giving, seasonality plays a major role. As a result, Godiva must develop a plan for managing the fluctuations in production. Attention to utilizing production capacity, uniform production across nations, forecasting and new methods of inventory are crucial.

Implementation Strategy

At the major factory in Belgium, innovative measures are to be taken to take advantage of the capacity for production. New methods of preserving freshness in order to make stock in advance for seasonal demand possible are important for solving the issues of production capacity and market trends. Time strategies of producing specific chocolates to fit the needs of the cultures and seasons will also apply to the market trends. Once the production line at the other factory, located in the United States is equivalent, the Belgium factory may also exploit the production capacity by exporting more to them.

Advertising will progress more toward the desired, unified image of luxury to be implanted throughout all cultures of the triad. Boutique modification and other measures of uniformity will also be put into play in all areas. Prices particularly will see an increase in some (France and United Kingdom, for example) and decrease in others in the effort to stabilize prices in the European continent.

In Belgium, it is important for Godiva to benefit by clearing the confusion in its image which is limiting its potential. The company will center its attention breaking through to the people by representing a unique and revised image, different from the rest. Furthermore, much attention will be placed in the city of Brussels where the situation is most dire.

Sense Making

Consistency is crucial for management in a worldwide company both internally and externally. Internally, the operations strategy must coincide with the overall business strategy. The operations strategy also must work with the functional strategies and the decisions must be consistent with the operations strategy. Externally, the operations strategy must also depend upon the business environment, such as resources available, competitive behavior, geographical location and preference.

In Godiva, inconsistency of image is the crucial reason that their overall business and operations strategy are ineffective. Godiva needs to first gain consistency externally by making sense of the type of customers and the type of environment they are targeting. Currently, they target high class consumers with disposable incomes that expect high quality of product. From there, they need to create uniformity of their image among all of their retailers by creating a consistency in their functional and operational strategies. Boutiques worldwide give the overall experience with atmosphere from interiors to the beautifully detailed service and packaging. The final step Godiva then must take is making sure that their overall business plan is consistent and incorporates the internal and external factors mentioned above.

Godiva's mission in the past and still today is to target the wealthy market. To make the mission come together they plan to operate towards the same goals in a more effective manner.

Recommendations

Market Share in Belgium

The first issue that must be addressed is that Belgium needs to gain and keep market share. As Belgium is the birthplace of chocolates and their consumption is the strongest, it makes it the most important country to the triad. With 10%, Belgium has an unacceptable market share. It is critical that they realize the positioning of the brand belonging to Corne Toison d' Or. As it

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