Chocolate DIY Business Report ( Final )

8/13/2019 Chocolate DIY Business Report ( Final )

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Nature of BusinessOur companys name is Chocolate Bites. The nature of our business is selling Do-It-Yourself(DIY) chocolates. Customers will be able to experience the process of making a chocolate frommoulding it to decorating it in our shop. We realised that there are not enough platforms forpeople to unleash their creativity and receive their well-wishes known through food products.Furthermore, most of the chocolate designs in the market currently are too mundane.

We can use the managing skills learnt in Business Managementto plan and organise ourbusiness well to ensure the business is able to operate smoothly. Through OrganisationalBehaviour, we learnt to manage the employees well as we better recognize their differentpersonalities and well-being. With the knowledge learnt from Decision Spreadsheet, we are ableto record our daily transactions systematically in Excel and calculate important statistics such asthe profit and loss of the company. Furthermore, we adopted the marketing research methodslearnt in Idea Jumpstartto identify the taste and preferences of our customers.

Research on Similar Existing CompaniesThere are a myriad of chocolate businesses in the industry, each specializing in certain niches.We have decided to focus on two companies that have identical nature of business to us. We as

a fledgling company, find it vital to learn from established players in the industry.

Chocolate GraphicsChocolate Graphic sells a wide variety of chocolates targeting mainly at corporate buyers. Their

large catalogue includes photograph chocolates, wedding chocolates, personalised message

chocolates. It has been operating for more than 10 years, and we attribute their success through

their strong sense of social responsibility. They use 100% organic ingredients for their

chocolates and being halal certified means they capture a large target audience. To further

appeal to their customers, they have value-added services such as having a wide range of eye

catching designs1, suitable for all occasions. This allows customers who do not have anything in

mind to select the designs they prefer. Chocolate Graphics currently has two outlets in Bugis

and Lorong Ampas. The two locations are not ideal for your average heart-landers as the shopsare centrally located. In addition, delivery charges also apply regardless of order size, thus this

may turn away potential customers who are considering one-off ornamental gifts. Chocolate

Graphics also lacks publicity. Other than their website and word of mouth, many do not know of

their store. Granted, they are more for the corporate market, but having more advertising can

definitely help the company. That being said, Chocolate Graphics is a veteran in the industry

and their large contact base certainly helps them.

Cocoa BCocoa B is an online chocolate boutique whereby customers create customized treats with any

desired combination. Upon visiting the site, customers are presented with a clean chic webpagewith beautiful visuals, a easy-to-use interface and self explanatory purchasing system. There on,you can create any possible combination of chocolates from their choice of exciting toppings.From your traditional Belgium delights to exotic bacon flavoured ones; Cocoa B is a daringenterprise that encourages customers to go wild. Lacking a physical storefront, Cocoa B reliesheavily on the internet and popular media for their sales. An Omni channeling approach isadopted as they keep customers updated through Facebook, E-newsletters and RSS feeds.

1Refer to Appendix 1 for the pictures


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are bought as birthday gifts most of the time. Hence, we could focus on creating more birthday-related chocolate. (E.g. horoscope symbols printed on the chocolate). This will attract morecustomers as we are unique in terms of the designs and the chocolates are more appropriateand meaningful when sent as a birthday gift. In addition, providing them with the best servicealso plays an important role in satisfying their needs and enquires. Also, we must always beaware of the key concerns of our customers such as people are becoming more health

conscious as shown in the survey as well as restrictions for some people. For example, we willsell halal chocolates in order to appeal to the Muslims and sell healthier chocolates which are ofa lower sugar and calories level.

CompetitorsCompetitors pose a great threat to our business as their existence makes it difficult for us toincrease sales and maintain a steady flow of regulars. Their innovative ideas and promotionscan trigger the change in preference of the customers. Hence, we must be responsive tochanges and be unique from other competitor in order to survive and excel in this industry. Oneway to stand out from our competitors is to come out with special recipe chocolate such that weare the only ones selling it. The uniqueness in the types of services provided also makes usdifferent from our competitors. We want to serve each and every customer with the best attitude

so as to make them feel comfortable when they visit us. Hence, this gives customer a reason topurchase from us rather than our competitors.

SuppliersSuppliers are the ones who provide us with the raw materials and ingredients. Good relationshipand trust have to be maintained in order to maximise our profit margins. This can be done vialong-term trading with them, creating a win-win situation for both parties. To play safe, we canhave more than one supplier. As such, when one supplier is unable to supply us chocolate, wedo not have to worry about not having any chocolate at all to continue running the business.Sourcing for the most great value supplier who provide quality goods is also crucial in cuttingcost for production. However, we must be effective by making the right decision and must notselect one that only provide great value but without quality.

Financial InstitutionsFinancial institutions such as banks are needed when we do not have enough capital to set upour company. Shortage of money makes it very difficult to maintain the operations and sustainnew developments. Hence, we have to provide enough credentials such that the bank can trustour business stability and will agree to borrow us when we are in urgent need.

MediaMedia can serve both as a positive and a negative tool. The power of media is very strong andwe can make use of mass media to promote our business through advertisements and alsocreate Omni-channels to stay connected with our customers and constantly update them withthe latest promotions and new products. However, when negative comments are made

regarding our business, it will affect our reputation greatly. Hence, we have to minimise ournegative effects on the social and environmental aspects, as it is very easily overlooked byother companies as they only think of their economic gains. We could do this by constantlymonitoring our social media site and handle any complains through emails.

General EnvironmentEconomic ForcesUnemployment rate, inflation, potential economic growth, interest rate will affect the purchasingpower of our customers. When the economy is booming, people tend to spend more and are


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more willing to purchase our chocolate. However, when there is an economic downturn, peoplewill tend spend less and save more. They meticulous in their spending and may not be willing tospend it on non-necessary product such as chocolate. We must be alert about the economy andplan very carefully in order to attract customers during economic downturns while not makingmuch losses. During economic downturn, we can work with other businesses or institutions topromote our business by giving more discounts and rebates to our customers. For example,

giving more discount during Valentines Day and having student price promotions. We can makeuse of the membership system as well, with special privileges to members during those times.

Technological ForcesThe advancement in technology increase efficiency and productivity of our chocolate company.By searching for new technological way to produce and melt chocolate, we can save time andreduce labour forces. The power of technology also includes influencing internet users withinformation. Some of the information may be a help while others may be a problem. We cannotcontrol the technology forces, the only way is to minimise the harm to the lowest and maximiseit benefits to the highest. An example of a benefit is internet business, which allows business tooperate online. Thus, this allows greater flow of information and orders can be made throughthe system, making it less time consuming.

LocationWe have decided on having four outlets located in different parts of Singapore. We came outwith 5 possible locations for our outlets to be located. In order to eliminate one of the choices,we have decided to use the decision matrix learnt in Idea Jumpstart. This is a better way tochoose our four locations as we can eliminate one of the choices in a structured manner.

RentalFee

HumanTraffic

Accessibility Competitors

Weight of eachcriterion

5 4 3 3 Total

Changi Airport 1 1 1 1 15

ION Orchard 2 5 5 3 54

JCube 4 3 3 4 53

Causeway point 3 4 4 2 49

Ang Mo KioShopping Mall

5 2 2 5 54

Elaborations on each criterionRental fee is a very important criterion for us in choosing the location. In order to maximize our

profits, we have to incur as less expenses as possible. It should be preferably below our budgetof $10,000, with an approximate size of a Long John Silver restaurant3. The lower the rentalcost, the better the location.

Human traffic refers to the number of people visiting a particular place. In order to spread ourbusiness to more people, the location should have a large number of potential customers. Witha higher volume of human traffic, we will be able to approach more potential customers who are

3Refer to Appendix 2 for the floor plan of our outlet

35 4 3

10 20 15 9

20 12 9 12

15 16 12 6

25 8 6 15


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willing to purchase our products and increase our sales. Hence, the higher the human traffic, thebetter the location.

Accessibilityrefers to how easy and convenient to travel to a particular location. Hence, agood location will have multiple transport systems such as buses and MRT. This way, they donot find it a hassle to get to our outlets and will be gladder to visit us. The more accessible the

locations are, the better the location.

Competitorsrefer to businesses that provide similar goods and services as us. With manycompetitors, it will be harder for us to attract customers into our outlets as there are many othershops that they can visit. In order to compete with our competitors, we might need to have moresales regularly, which mean our profits cannot be maximized. The lesser the number ofcompetitors in the vicinity, the better it is for us.

ConclusionAfter weighing out all of our factors,Changi Airportis eliminated as the rental fee is relativelyhigh compared to the other locations. As such, in order to compensate the rental fee, we willhave to sell our chocolate at relatively high prices. Thus, this makes us less appealing to our

customers. In addition, it is located at the far end of Singapore and this makes it veryinconvenient for our customers. Furthermore, there are many other competitors in the area suchas So Chocolateand Cocoa Trees, which poses a high threat to our business. Hence Changi

Airport is not an ideal location for our outlet to be situated in.

PlanningMissionWe want people taste the rapture in our chocolates. We hope that consumers will feel thefeelings being put into the chocolates during the process of making them as the chocolatesgiven to them are made from scratch by their loved ones or our staffs and it is filled withsincerity and love.

VisionWe want to be the first option people consider amongst all the chocolate companies when theywant to prepare gifts, purchase chocolates or to create their own special chocolates.

Our GoalsAs our business is a profit driven company where we make profit by selling our products(chocolate) and services, one of our strategic goals is to achieve a profit of 20%of our capitalof $500,000 by the end of first year.

Another of our strategic goals is to have a steady flow of customer everydayinstead of justhaving high volume of sales during special occasions or festivals. This will aid our company inmaintaining sales in order to sustain day to day operations fees and ensures that our popularityamong locals does not fade off.

PoliciesIt is our ethical pol icyto be fair and honest when dealing with customers. To gain ourcustomers trust, we will not lie through our teeth and will only make legit imate statements whenpromoting our services and products. We value every one of our customers and thereby hope toserve them to the best of our abilities.


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Refer to Appendix 4 for a bigger chart.

The Chief Executive Chairman(CEO) is a top level manager, a leader and figurehead of thecompany who performs symbolic tasks that represents our organization and is responsible forthe actions of everyone in the company as their success and failures will be reflected on him.He makes long-term decisions about the overall direction of the organization and establishesthe objectives, policies, and strategies for it. He leads the company by motivating andpresenting ethical guidelines.

Middle managers are responsible for implementing the policies and plans made by the CEO andsupervising and coordinating the activities of first-line managers. The first-line managers reportto the middle management and make short-term decisions and direct the daily tasks of non-

managerial personnel.

The Human Resource Manager acts as a resource allocator as he sets priorities about theuses of human resources of the company. He maintains staffs and organizational work structureby recruiting people that the company needs through interviews, matching peop les abilities andskills to the available job openings. He also conducts regular training programmes to ensurethat the staffs skills are relevant and able to keep up with the relenting changes in technologyand demands for certain services and products.

The Production Manager is an entrepreneur who initiates and encourages change andinnovation in researching new methods of producing healthier chocolates. His job is to chooseand maintain equipment in good condition, sets production quality standards, oversees and

monitors the production process and estimate costs so that production will be cost-effective.

The Hygiene Managerhas to monitor food handlers, provide trainings for food handlers andensure that health and safety rules are strictly adhered to in the organization. He is also incharge of the cleanliness of the office and outlets.

The Sales and Marketing Managers role is to devise marketing strategies and plans to boostsales, set and ensure the achievement of sales targets to generate revenue for the company.


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The Accounting and Finance Manager manages accounts and budgets, prepare financialreports, be updated on changes in financial regulations and legislation and analyze theprevailing market prices and trends.

The IT Manager leads and conducts technological researches while keeping organizationalgoals in mind so as to maintain organizations effectiveness and efficiency in implementing

technological solutions or strategies. He is also in charge of repairing any technical issues in thecompany.

LeadingLeading is the ability to influence people to voluntarily pursue organizational goals. It involvesthe process of creating vision, inspiring, commitment and directing human efforts towardsobjectives.

For our DIY chocolate company, we decided to use theHersey and Blanchards SituationalLeadership Theorywhereby managers leadership styles are implemented in accordance withworkers readiness.

Firstly, managers who have subordinates with low task relevant readiness (R1), will need toadopt the Telling (S1) leadership style by maintaining high task behavior and low relationshipbehavior. High task behavior is needed as the instructions given must be very precise and closemonitoring is required to ensure that the employee is carrying out his duties well. Lowrelationship behavior is needed as the subordinate may be affected by the managers remarksgreatly. Misunderstanding may also occur when job and jokes are combined together. After aperiod of time, the subordinate constantly improves himself towards the moderately low-taskbehavior (R2).

When the subordinate is at R2, the manager will need to adopt the Selling (S2) leadership styleby maintaining a high task behavior and a high relationship behavior. High task behavior is stillrequired but not as high as that of Telling (S1). The subordinate may be still unclear of how

certain things work, as such, the managers is still required to guide him through certain work bygiving him instructions. High relationship behavior is needed as the manager can now trusts hissubordinate and convince him to take more initiative. By giving the subordinate moreencouragement, the worker will tend to improve towards the moderately high task behavior (R3).

When the subordinate is at R3, the manager will need to adopt Participating (S3) leadershipstyle by maintaining low task behavior and high relationship behavior. Low task behavior isneeded as the subordinate is slightly capable and can be trusted most of the time. The managercan reduce his supervision and check his work less frequently. High relationship behavior isneeded as the subordinates still require encouragement for further improvements to the HighTask relevant readiness (R4).

When the subordinate is at R4, the manager will need to adopt Delegating (S4) leadership styleby maintaining low task behavior and low relationship behavior. Low task behavior is needed asthe subordinate is now very capable in completing the task and does not require the managersassistance in work. The manager no longer has to check on the subordinate as he can betrusted fully. Low relationship behavior is needed as the subordinate is given the respect by themanager and the manager rarely meets the subordinate.

In summary, every manager should have the ability to lead the team. When any subordinatefaces any problem, the managers should motivate, help and lead them by example on how the


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problem can be resolved. By using the Hersey and Blanchards Situational Leadership Theory,It will be able to help the manager to lead them in a systematic way.

ControllingControlling is indispensable in any management system. To us, a good control system is onethat can monitor performance, compare it with our goals and allow us to take corrective action

which will allow our performance to meet our objectives. The ones focused below, we believewill help us best achieve our targets.

Types of controlFeedBack

As a form of feedback control, we will encourage customers to give us feedbacks on ourservices through surveys after receiving the services. Through the surveys, we can rectifycurrent mistakes and thus preventing future performance deficiencies in our business.Furthermore, we are able to improve and hence provide better services to our customers.

FeedforwardConversely, we can use feedforward control where will stop problems before they even occur.

This can be done by doing a marketing research on the tastes and preferences of our targetedcustomers. We did a survey on 50 people where we will be able to estimate their preferredservices and products based on the results. In this way, we will be able to provide them theservices they desire for as we come to know their needs. In addition, we can also practicefeedforward control by checking the condition of the machines before starting our day to dayoperations. This will in turns prevent problem of breakdown of machines which may causeinconveniences to our customer if not carefully managed and monitor.

Areas of controlThere are six areas of control but our company is concentrating on only four areas.

Physical Area

Controlling Physical Assets and Shop PerimeterInventory management will ensure that we will not run out of stocks nor store too much products,this will help us manage our space and expenditure. Hence we have decided to use Just-InTime inventory strategywhereby sufficient supplies will be delivered to us just in time before itruns out. We can maximize our retail space and labour force could be free to focus on primarytasks such as serving the customers rather than stocking the supplies. Furthermore, the risk ofsupplies being expired or spoiled could be eliminated. In addition, there are quality controls toensure products are manufactured are according to the preference and acceptance level. 3months maintenance schedules of our machineries are performed to keep our machines freefrom for any problems; also to maintain its efficiency.

Human Resources Area

Regulating Employees AttitudesEncourage employees to be attentive towards customers to ensure that customers are happywith our products and services. This could be achieved by having customer service trainings forall employees.

Evaluating Employees PerformanceFeedback forms for customers to commend and report the employees for the things they havedone well or not. Ensure employees are knowledgeable about our chocolate products such that


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customers will have the best value and most suitable product for the occasion.

Keeping Employees SatisfiedProvide perks being an employee with us. E.g. Medical benefits like free dental-care every year.This ensures the level of job satisfaction is high and there will be less staff turnover.

Informational AreaManage Sales PromotionsDuring different seasons, there may be occasions where chocolates are more sought for thanother days. E.g. Valentines Day. Hence, promotions should be carried out a month before theseoccasions to ensure higher sales during the occasions.

Analyse CompetitorsMarket surveys should be carried out to find out what our competitors are doing. From thesemarket surveys we should change our pricing and our future plans to stay ahead of ourcompetitors.

Financial Area

Keeping to our budgetEnsure that our budget is not over-spent by spending within our means and to certainrequirements, as it will increase our liabilities over the long term. Our budget should also beupdated and drafted to suit our quarterly needs.

Paying the suppliersEnsure that suppliers are paid punctually to maintain trust between both parties.

Hence from these areas of controls, we can execute our day to day activities better, and yield aresult closer to our projected goals.

Conclusion

Currently, this is a new business with a new concept that many people in Singapore are notexposed to, hence we might not be very popular among them. With time, people will beginto accept this new concept and we strongly believe that our company will be able marketleaders and to succeed and achieve our vision eventually. We strongly believe that byworking hand in hand as an organization, we will achieve success. In conclusion, we do notmake chocolates. We provide the canvas for you to paint you r choco late masterpiece.


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APPENDIX

Appendix 1Source:https://www.facebook.com/chographics
https://www.facebook.com/chographicshttps://www.facebook.com/chographicshttps://www.facebook.com/chographics


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Appendix 2

Floor Plan (Outlet)

Store

Room

Office

Topping Area

Working Area

Counter

Machines


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Appendix 3

Business Management Survey Results

1. Your age is

2. On a scale of 1-4, please rank which chocolate you like the most

27%

23%21%

29%

White Chocolate

Dark Chocolate

Flavoured Chocolate

Milk Chocolate

13-18 83%

19-24 6%

24-29 2%

30-35 9%


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3. What brands of chocolate do you normally buy?

4. Why do you like most about their chocolate/business?

20%

7%

22%

1%

4%6%

8%

21%

6%5%

Cadbury

Royce

Hershey's

Laurent Bernard Chocolatier

Awfully Chocolate

Snickers

Mars

M&M

Merci

Other

20%

65%

4% 10%

1%

Cost

Quality of the

chocolate

Service

Designs

Other


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5. What do you dislike most about chocolates?

6. What is your favourite additive to chocolate?

7. What occasion do you normally buy chocolate, be it for yourself or gifts?

19%

21%

13%14%

10%

19%

4%

Nuts

Fruits

Peanut Butter

Caramel

Coffee

None

Other

30%

1%5%

10%16%

38%

Birthdays

Weddings

Farewell

Valentine

No occasionOther

Cost 34%Health issues 60%

Other 6%


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8. What do you think is a reasonable price of a piece of chocolate that isbeing DIY?

9. Do you welcome the idea of a DIY Chocolate business?

$3-$4 28%

$4-$5 38%

$5-$6 19%

$7-$8 9%

$8-$9 (with better quality chocolate) 6%

Yes 91%

No 9%


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Appendix 4


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