Chocolates El Rey Harvard Case Solution & Analysis

OVERVIEW:

This case study of the management strategy is regarding the global expansion strategy of the management of the El Rey Company. The company is a producer and supplier of chocolates that are based famous cocoa beans of the country they operate from. The home country of the company is Venezuela and its beans are famous for the quality, taste and aroma all over the world.

The company initially started operating in the early twentieth century in the country under the name of Tuozzo Zozaya and Co. it was co-founded by Jose Rafael Zozaya and Carmelo Tuozzo, who was his father-in-law and the initial business target for the management of the company was the food service industry of the company. The company was later acquired by Jorge Redmond in the late 1970`s and he renamed the company as El Rey.

The new management of the company diversified the operations of the organization as the business today has expanded into four different segments of the industry. The company now produces and sells chocolates bars as per the demands for food services industry, distribution, beverages and the retail sector of the industry. Due to this decision of the new management of the organization and expansion in the activities of the business, the organization has witnessed immense growth as not only its market share in the domestic markets has increased but also the exports of the company through the distribution agencies overseas has increased over the time.

The decreasing political stability of the country along with the strict regulations of the government of the country are causing hurdles and barriers for the company and the management of the business is now thinking of expanding the organization overseas in-order to seek some other politically stable and promising markets for the company. The owner and the management of the company is of the view that the chocolates and the other products that the organization produces are one of the best in the world, if not the best and therefore, it should deserve and reach its place as a global premium chocolate of the world.

PROBLEM STATEMENT:

“The biggest challenge for the management of the company in global expansion is the financial resources of the company”
The most critical issue for the management of the organization in expanding in the American market is that it lacks the resources for pursuing a global expansion and competing with the premier multinational chocolate companies of the world. The current staff and the production activity of the company along with the supply of cocoa beans are totally inadequate for the management of the company and for doing so the management of the organization will have to compromise on the quality of product, something they are not willing to do so. The current organization structure of the company does not even contain a marketing and advertisement team and if the company decides to penetrate the global markets than doing so is impossible with an advertisement and marketing team..............................

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