Theo Chocolate Case Study

Recommendations:

Factory Expansion:

The factory in Fremont was a 20,000 square foot facility which also housed Theo’s offices and its retail store. I recommend that the company expands to 28,000 square foot and increase its capacity from 33% to 80% this will help Theo achieve 290 tons of chocolate per year. The excess 20% capacity can be used for scheduled maintenance and for private label agreements.

Research and Development:

Theo chocolate currently offers limited product lines with fewer flavors (See Exhibit 8 from Case.) I recommend that Theo should invest in R&D and come up with innovative products that attract new customers such as improving their packaging and flavors. The company should increase their product ranges and provide more choices. Theo should offer products with different sizes and several price ranges to give consumers options and gain more market share.

For Theo to keep their prices affordable they need to control their operation costs (See Exhibit 2) and use green energy.

Marketing:

Theo’s advertising had been entirely word of mouth, while this an unpaid form of marketing and is important for every business, Theo should expand and improve their marketing strategy (Exhibit 2) to be able to target customers and reach different market segments. They should launch robust marketing campaign and emphasize the benefit of their products and their CSR initiatives to spread awareness of their brand.

Distribution:

• Retailers: (third-party retail) reach out more retailers in the U.S and expand internationally to Canadian states that are close to Washington State. Theo should focus on increasing their bottom line by minimizing retail costs since it runs for as much as 50% of the price of a bar. They also should create a robust ecommerce channel and gain more market share.

• Brokers: Theo should use “B” classified brokers to expand their presence in Midwest, south, and southwest, and focus on