Charles Chocolates Harvard Case Solution & Analysis

Charles Chocolates Case Solution

Financial performance of Charles Chocolate Company

The financial performance of the company is here analysed by ratios and graphs discussed below.

Current Ratio

The current ratio of 2010 is 1.001 and the current ratio of 2011 is 1.69 it means in 2010 company is less efficient to pay liabilities which further improves in 2011.

Debt To Equity Ratio

The Debt to Equity ratio of 2010 is 0.78 and in the year 2011 the ratio is 0.48 it means they improve the debt ratio now the debt ratio is less than the previous year.

Quick Ratio

The quick ratio of 2010 is 0.33 whereas in 2011 the quick ratio reached 0.79 it means in 2011 the company improves its ability to pay short-term debt.

Working Capital

The working capital value of 2010 is 3275 and in 2011 the working capital is 1,191,710 which means a company can pay its debt quickly 2011.

Difference between Assets of 2010 And 2011

The difference of Assets from 2010 to 2011 is 124,257.

 Value Chain

Charles chocolate company believes in differentiation because they want to get a competitive advantage by offering the different types of chocolates which are not available in the market. Charles adds value to their products by minimizing the cost and maximizing the profit. Cost reduction strategies are primarily followed by the company because as cost decreases profit increases.A properly organized business vision and mission with advanced information technology.

Competency/Competitive Advantage

The main competitive advantage of Charles chocolate Company is the prices they put on their products and the company should work on it because the cost of products is high compared with other competitors. The company has also financial resources as a competitive advantage because they can invest and re-invest in a business.

Identification of key issues

• High costing of products
• Research and development needs improvement
• Expand the products and markets
• Change the marketing strategies
• Works on the packaging.

Strategic Recommendation

As an Analyst, I address all these key issues of Charles Chocolate Company.

1. Issue of high costing: the company should apply those strategies on product development that are based on cost accounting patterns like activity-based cost systems or unit-based costing systems. The costing of products is very high for which prices are also high so in this current scenario prices should be less either customers can shift to competitors because they also offer the same type of products atfewer prices.
2. Research and development: research and development center also needs improvement because according to new trends and customers' perceptions regarding products research center must think seriously.
3. Expand the products and markets: As an Analyst, I must say that company must be expanded. The company should launch different flavors of chocolate or increase the product as well as business portfolio. In a portfolio, the risk rate also decreases, and the chances for expanding the business and generating more profit increase. A company has a lot of financial resources so they should grab this opportunity.
4. Update the marketing: the marketing strategies are also almost too old now they must work on it and market the company through different social media and other platforms.
5. Packaging: Packaging is also old now the company should work on packaging and change gift boxes and also introduced some new type of packaging in the market.

Conclusion

The president of Charles Chocolates was Steve parkland in 2012. The company is analyzed through internal as well as external analysis in which we explain the micro and macro environment of the company and also we explain how much financial health of the company is. The issues explained in recommendations must be addressed as soon as possible. And also the main issues face by company are poor demand forecasting, inefficient product planning and no measure of productivity. By resolving these issues the productivity of the company increases and demand for the products also increases...............................

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