PPB3143 – Business Policy and Strategic Management
Beryl’s Chocolate and Confectionary Sdn Bhd (SME)
Name No Matric
Teoh Boon Ting D20151071637
Chan Yaw Jack D20151069958
Chia Kim Sui D20151069947
Malcolm Goh Keat Ming D20151069987
Lecturer: Dr. Mad Ithnin bin Salleh
Beryl’s Chocolate and Confectionary Sdn Bhd (Beryl’s) was created with one aim in mind-excellence. Since Beryl’s establishment in 1995, they have focused on ensuring the creation, supply and maintenance of the very best chocolates for both the Malaysian and international market. Beryl’s first factory, in the small town of Desa Serdang located at the southern zone of Kuala Lumpur, was set up in 1995. Beryl’s started out with manufacturing consumer- packed chocolates that were sold mainly to duty-free shops and supermarkets across the country. They have since established Beryl’s as a major regional chocolatier.
In 1998, Beryl’s relocated to their new factory in the Seri Kembangan Industrial Area where they increased their production lines to provide a diverse range of chocolate products to fulfil their promise to offer high quality chocolates to their customers. In 2008 and 2013, they opened two more factories to keep up with the growing demands from their customers and to further develop new treats that Beryl’s customers would love. The new factories helped expand their capabilities to produce more than just consumer-packed chocolates. Beryl’s now also produce chocolate for the food service industries and manufacture cookies and other confectionery products.
With a vision of being a leading international brand that is synonymous with the highest quality chocolate products, Beryl’s has focused on a simple set of values at every step of their journey. Quality, innovation and the very highest levels of service, these are what Beryl’s promise their customers and partners alike. The reason for this dedication is a simple one as Beryl’s aim to keep their customers happy. Every Beryl’s product carries this implied promise of the very best in chocolate products and they believe that the Beryl’s brand is now synonymous with that expectation.
Beryl’s is after all more than just another manufacturer. They commit a substantial amount of time, effort and resources towards the development of unique chocolate combinations. Many of these use local and regional ingredients including durians, mangoes and even chilies to create chocolate blends like no other. This development process starts however with the finest raw materials including some of the world’s best cocoa beans from Ghana. The use of the best raw material is, Beryl’s believe important in ensuring the finest finished products.
Throughout this development and manufacturing process, Beryl’s maintain a devotion to the highest quality and production standards. This rigor is backed up by a group of creative and innovative employees who ensure that they keep an eye on what their customers want. The end result produces high quality, safe and consistently excellent chocolate products. From their humble beginnings, Beryl’s Chocolate has now become a well-loved consumer brand throughout the country and beyond. Their products have gained the recognition of discerning customers both locally and overseas. Beryl’s Chocolates can now be found in over 15 countries around the world.
To become a leading international chocolatier that emphasises on excellence and perfection by creating the finest and the most indulgent chocolates with the spirit of innovation.
Berly’s are passionate about the art of chocolate-making and Berly’s are continuously striving to create perfect premium chocolates that will put a smile on Berly’s customers’ face. Berly’s will continue to use nothing but the finest quality ingredients and implement strict operational procedures to ensure that the chocolates produced are perfect.
Long Term Objective
Berly’s is always to penetrate overseas markets by exporting Berly’s Chocolate product.
Analysis of the company external environment
Political, Government and Legal Forces
In the given scenario of chocolate manufacturing industry operating in Malaysia has to analyze that the political stability in the existing country is pretty much secured. The impacts of political influences on the sale of the chocolate products and its manufacturing will be observed when Berly’s will intervene in such practices that are not supported by the government. Government can intervene in the operations which are not environmental friendly and the issues of such like are the impacts that chocolate manufacturer will have to face from the political point of view. As a democratic political influence, Berly’s can grab maximum advantages in terms of low restrictions on the volume of production and sales scale. Hence, there are political issues that may affect the industry and their impacts can only be minimized if Berly’s is already prepared to handle political matters of Malaysia.
Economic conditions of the country is the most important factor of analysis to any country because it decides the successful and failure of any business profitability. Economic influences the country are beyond the control of Berly’s and it is bound to reflect back in accordance with economic situation. If the Berly’s gives high concerns to the economic choices, then it is beyond any nagging doubt that it can make successful profits even in the realm of recession. The economic conditions of any country act as an opportunity as well as threat depending upon the strategic planning made by the Berly’s. If the Berly’s gives high degree of concern to the economic choices even in the depressed economic state can make its survival and the firms ignoring them will be seen as going out of the market.
Social and Culture Force
The socio-cultural environment of the country has significant impact on the demand of the product or services. This is the reason that Berly’s mainly manufacture the products according to the taste and demand pattern of the nation in which it is operating. Especially, in industries where the taste and variety of the food products vary from country to country according to the socio-cultural environment. Chocolate is a food product which has in depth relation with health yielding the fact that chocolate industry has to penetrate in the market with all factors concerning health issues. In Malaysia, customers are becoming more health conscious and provide an opportunity for the chocolate makers to diversify the product with different flavors and healthy ingredients. This reflects that the chocolate company has to keep its focal point on the tastes of young customers and such modifications in the chocolate that urges the consumers to give a taste at least once in a year.
Berly’s can achieve greater success and competitive advantage in the market by emphasizing on the aspects of technological factors as a strategic concern. The emerging technologies are projecting new opportunities to the new markets and giving threats to the existing one surfacing the fact to compensate with new technology has become optimum intrinsic need. In the chocolate manufacturing company, technology can be the most effective tool in product development, advertising, and promotion. Technology can alter the process of production and can yield higher quality product at much less cost. It can also support in building a strong brand name and product portfolio by adopting digital media to promote products. The existing available technology in Malaysia has much significant importance on the chocolate industry and the industry has to adapt the concerned technology in order to captivate greater market share.
Companies should understand the business world and remain anxious to knowing the strategies used by competitors to thrive in operations. Beryl’s faces competition from other chocolate manufacturing company such as Cadbury and Hershey in its dedicated efforts towards providing excellent services to its customers. The most important stakeholder in any company is a client. Beryl’s focuses on successfully attracting a broader customer base so as to increase its overall profitability. Therefore, Beryl’s should develop an effective marketing campaign program to inform customers of its new offers. Promotional campaign programs should be established to build Beryl’s customer base in both Malaysia and other foreign markets.
Porter’s Five-Forces Model
Rivalry among competing firms
Many businesses are competing against Berly’s and planning to take over the supremacy the company has for several years. Several competitors are continuously developing their products and innovating ideas to make competing even harder. Companies such as Cadbury and Hershey’s. Berly’s main rivals because they are also long established confectionary brands and like Berly’s are developing new ranges of products new promotions. Rivalry will always be strong among these companies because they sell from the same types of stores and there products are similar in some respects.
Threat of new entrants
The entry of competitors will be difficult because there are already well established companies within this market these include Berly’s, Cadbury and Hershey. These companies dominate the confectionary market with their own particular types of chocolates. Besides, chocolate manufacturing industry requires a large level of investments, marketing and product development before a new entrant can make a place in the industry. This makes the barrier for entry very hard for another new company to start Berly’s competitors have the power to attract and influence the customers by more attractive substitute, prices and marketing techniques.
Bargaining power of suppliers
Berly’s prides itself on creating and maintaining positive relationships with its suppliers all over the world. It has a large purchasing power and the suppliers of agricultural commodities offer a product that is far from unique and hence Berly’s has higher bargaining power than its suppliers as the industry relies heavily on a complex agro business supply chain. Although there is an existing competition, raw materials like nuts, milk, cocoa or special ingredients are sufficient enough to satisfy Berly’s production. Berly’s have the main power over its suppliers so Berly’s can use economies of scale and buy there raw materials for cheaper and more in bulk than a medium sized business could.
Bargaining Power of Buyers
Customers are high price sensitivity, easy to switch brand. These customers have an array choice to buy which brand such as Cadbury and Hershey. Therefore, Berly’s cannot raise the prices and force the customers to purchase their products at higher rates. High level of competition between the major chocolate manufacturing companies that exists in current market leads to low switching cost for the buyer to change their preferred brand. The customers will simply shift to another competitor. Thus, the customers of Berly’s have a number of choices. So the bargaining power of customers against Berly’s is high.
Threat of substitute product
Beryl’s has many substitution products that compete with Berly’s. Besides that, supermarket also create their own brands this and sell on the shelves at a cheaper price. The chocolate industry faces intense substitutes such as non-chocolate snacks, candies, potato chips, ice cream and fruits. Since many consumers see chocolate as unhealthy, many customers will switch to consume substitute products. So when a customers find their product doesn’t meet their expectation and satisfaction they can change their mind to buy from other brand or other confectionary product.
Berly’s Internal Environment
Organisational objectives also affect the Human Resource Management practices in the organisation. The objectives of the organisation change according to the situation. The change in objective leads to change in working pattern of the employees. The objective of Berly’s was to be competitive leader. They thought to bring employee closer to get competitive leadership. For this purpose, Beryl’s starts pay bonus to their employees based on performance. It acts as a motivating factor for the employees and they start focussing on giving better performance than before.
Organisational social responsibility
The quality and loyalty of Berly’s had made it a common brand. Berly’s concentrates on social responsibility towards various communities. They give a lot of preference to stakeholders, focusing on their employees, supplies and buyers wellbeing. Cadbury also concentrates on environment by reducing waste in form of plastics. Due to health consciousness among people, Berly’s came up with products with no sugar added in it, natural colors and with low calorie. Various prtion sizes of the entire product were also been developed.
Grow Beryl’s People
Beryl’s strives to inspire their people to engage in challenging and rewarding career experiences and to contribute their talent to create a great place to work. Their culture is fast-moving, bold, innovative and accountable, reflecting the traits and skills necessary to thrive in a competitive marketplace. To support and build on the success of their people in a continually-evolving business environment, Beryl’s invest in their people and their development, foster respect for one another, celebrate diversity and commit to authenticity at every level. Beryl’s also works to create an environment in which their people can demonstrate innovative and courageous leadership to make a difference in every role they play in the company. As reflected in Beryl’s actions and their investments in their people, Beryl’s value their contributions and celebrate their success.
Grow Beryl’s Business
Beryl’s aims to deliver strong, profitable long-term growth by accelerating Beryl’s core chocolate business and expanding the reach of their brands globally. Beryl’s plans to innovate boldly and connect with their consumers wherever they are. As consumers seek out foods that have better well-being credentials, Beryl’s are actively evolving their portfolio by expanding the well-being brands in their portfolio, enhancing the nutrition and ingredient profile and inspiring consumers to snack mindfully by providing more portion control treats. Beryl’s plans to reach consumers in new markets around the world, using both traditional and digital channels. To fuel these investments, Beryl’s have been working to optimize their cost structure. These efforts include reinventing their supply chain, including adding and upgrading to more efficient production lines, while reducing the complexity of their product offerings, ingredients and number of suppliers. Beryl’s also continue to aggressively manage their overhead costs. Beryl’s has embedded zero-based budgeting practices across the organization to identify potential areas of cost reductions and capture and sustain savings within ongoing operating budgets. Through these actions, Beryl’s are leveraging their brands, platforms and capabilities to drive long-term value and return on investment for their shareholders.
Grow Beryl’s Impact
Beryl’s is focused on helping people snack in balance and enjoy life with products that are safely and sustainably sourced, produced and delivered. Beryl’s is committed to driving business growth while making positive change in the world. Beryl’s use their scale and focus where Beryl’s can has the greatest impact on people including communities, safety, sustainability and well-being snacks. This includes reducing their environmental footprint, empowering farmers in their supply chain and supporting the communities where their chocolates sourced, produced and sold.
Marketing Mix 4P strategy
Berly’s chocolate is a premium chocolate brand and offer more than 100 varieties of chocolate. The chocolate product of the Berly’s usually given as a gift during special occasions. Its main ingredients are sugar, milk chocolate, cocoa butter, skim milk powder, butter oil, vanillin, palm oil, wheat flour, low-fat cocoa powder, sodium bicarbonate, emulsifier and salt. Apart from this, there are other products in its marketing mix which are offered. The offering is in boxes which may contain from 30 grams to 500 grams. Continuous product innovation in its marketing mix has helped Berly’s to grow through the years. The product is positioned as something delicious and healthy for growing kids.
Pricing is the most important part of a marketing mix as it is the only area by which revenue is generated for the company. Before deciding the price strategy the feasible reactions of the competitors are also have to be taken into consideration. The pricing of the product must consider the appropriate demand-supply equation. The strategy used by Beryl’s for satisfying the value that all the customers buy the product is using the expectation they have about how much the production is worth to them. Beryl’s has introduced various products for different customer segments so that every customer segment has different expectations of price from the product. Therefore maximizing the returns includes maintaining right price level for each segment and then increasing moving through them.
Berly’s Chocolate and Confectionary Sdn Bhd was created and located at Jalan Imbi of Kuala Lumpur. Berly’s products are sold both locally and overseas. In Malaysia, their products are available I most of major supermarkets, hypermarkets, convenience stores, duty free shops and souvenir shops. Berly’s present export markets are Japan, Vietnam, Philippines, Singapore, India, Hong Kong, Macau, Maldives, Brunei, New Zealand and Indonesia.
Effective advertising attracts and generates supporting feelings for any business. To reach out to the consumers, communication plays an important. For the marketing of any product, advertisement and promotions are the best means of communication about the product to the end user. Berly’s does its promotions through televisions, consumer contact activity, etc. Berly’s gives special promotional offers during festivals like Chinese New Year, Hari Raya Aidilfitri and special occasions like Valentines Day. It continuously introduces new products to maintain its brand and to expand its market share.
Berly’s Business Function
Marketing and Product Management
Berly’s will do the customer value management to understand their customer better. Berly’s manage the processes that refine and leverage the benefits of their products to their customers. This function will help their colleagues to understand their customers better, by focusing on areas such as customer identification, contact and campaign management, customer scoring and data modelling. Berly’s make marketing targeted and personal to the customers. In addition, Berly’s will excite their customers at the point of purchase. Berly’s devise and deliver promotion materials, create exciting events and programmes to create strong desires for their products. They manage their channels to motivate and incentivize maximum efforts on their side to win in the market place.
Berly’s assess financial risks to help administer their exposure to creditors. Berly’s ensure they are paid what they are due accurately and on time. Berly’s also manage the consequences of cases where these don’t happen. Berly’s analyses business and operational data and turn them into reports that inform their product and operational owners on their performance against internal goals (cost and efficiencies), and external benchmarks (competitors and markets). Berly’s help them generate long term operational planning and form budgeting process.
Berly’s implement salary and benefit programmes that are market competitive to generate high performance and to create the desired culture. They design incentives for specific purposes such as employee retention, sales driven performance or up skilling. Berly’s have deep insights into their staff costs, and continually look for opportunities to get better value on their employee expenditure. They identify and grow their top talents. Berly’s ensure that they always have a strong pipeline of succession, which includes developing young talents for the future. They understand the training needs of their employees and they offer solutions through multiple channels. Berly’s strive to create a culture of continuous learning and growth.
Berly’s develop sales strategies to increase market share and profitability. They gather and analyse data on sales preferences to improve their product expertise. They develop effective sales strategies to increase market share and profitability. Berly’s understand their customers’ needs as they evolve to help they promote the appropriate solutions to them. They work under sales targets and goals, and reach their prospects through the phone. Berly’s continuously research and maintain a strong database of potential customers.
Berly’s EFE, IFE and CPM Matrix
External Factor Evaluation (EFE) Matrix
External Factor Evaluation (EFE) Matrix is a strategy tool used to examine company’s external environment and to identify the available opportunities and threats. When using the EFE matrix should be identify the key external opportunities and threats that are affecting or might affect a company. The ratings in external matrix refer to how effectively company’s current strategy responds to the opportunities and threats. The numbers range from 4 to 1, where 4 means a superior response, 3 is above average response, 2 is average response and 1 is poor response. Ratings, as well as weights, are assigned subjectively to each factor.
IFE (Internal Factor Evaluation) Matrix
Internal Factor Evaluation (IFE) Matrix is a strategy tool used to evaluate firm’s internal environment and to reveal its strengths as well as weaknesses. Strengths and weaknesses are used as the key internal factors in the evaluation. The ratings in internal matrix refer to how strong or weak each factor is in a firm. The numbers range from 4 to 1, where 4 means a major strength, 3 is minor strength, 2 is minor weakness and 1 is major weakness. Strengths can only receive ratings 3 & 4, weaknesses is 2 & 1. The process of assigning ratings in IFE matrix can be done easier using benchmarking tool.
CPM (Competitive Profile Matrix) Matrix
The Competitive Profile Matrix (CPM) is a tool that compares the firm and its rivals and reveals their relative strengths and weaknesses. The matrix identifies a firm’s key competitors and compares them using industry’s critical success factors. The analysis also reveals company’s relative strengths and weaknesses against its competitors. The ratings in CPM refer to how well companies are doing in each area. They range from 4 to 1, where 4 means a major strength, 3 is minor strength, 2 is minor weakness and 1 is major weakness. Ratings, as well as weights, are assigned subjectively to each company, but the process can be done easier through benchmarking
Issues faced by Berly’sManagement Information Systems (MIS) Issues
Beryl’s use information technology to support their global business processes and activities, including supporting critical business operations, communicating with their suppliers, customers and employees, maintaining effective accounting processes and financial and disclosure controls, engaging in mergers and acquisitions and other corporate transactions and executing various digital marketing and consumer promotion activities. Continuity of business applications and services may in the future be disrupted by events such as infection by viruses or malware, issues or errors in systems’ maintenance or security, migration of applications to the cloud, hardware or software failures, telecommunication failures and natural disasters. Moreover, cyber attacks, hacking, employee or insider error, physical breaches or other actions may cause confidential information belonging to Beryl’s or their employees, customers, consumers, partners and suppliers to be misused or breached. Beryl continue to devote focused resources to network security, backup and disaster recovery, enhanced training and other security measures to protect their systems and data. Beryl’s are also in the process of enhancing the monitoring and detection of threats in their environment. However, security measures cannot provide absolute security or guarantee that Beryl’s will be successful in preventing or responding to every breach or disruption on a timely basis. In addition, due to the constantly evolving nature of security threats, Beryl’s cannot predict the form and impact of any future incident and the cost and operational expense of implementing, maintaining and enhancing protective measures to guard against increasingly complex and sophisticated cyber threats could increase significantly.
Beryl’s manufacture and source products and materials on a scale. They utilize an integrated supply chain, a complex network of suppliers and material needs, owned manufacturing locations, co-manufacturing locations, distribution networks and information systems that support their ability to provide their products to their customers consistently. Factors that are hard to predict or beyond our control, like weather, natural disasters, supply and commodity shortages, fire, political unrest, cyber security breaches or generalized labor unrest could damage or disrupt Beryl’s operations. If Beryl’s do not effectively respond to disruptions in their operations, for example, by finding alternative suppliers or replacing capacity at key or sole manufacturing or distribution locations, or cannot quickly repair damage to their information, production or supply systems, Beryl’s may be late in delivering or unable to deliver products to our customers such as occurred in connection with the malware incident and the quality and safety of their products might be negatively affected. If a material or extended disruption occurs, Beryl’s may lose their customers’ or business partners’ confidence or suffer damage to their reputation, and long-term consumer demand for Beryl’s products could decline. In addition, Beryl’s might not have the functions, processes or organizational capability necessary to achieve on their anticipated timeframes their strategic ambition to reconfigure their supply chain and drive efficiencies to fuel growth.
Recommendations / Strategies that Berly’s should adapt
Market penetration is a measure of the amount of sales or adoption of a product or service compared to the total theoretical market for that product or service. A market penetration strategy involves focusing on selling existing products or services into existing markets to gain a higher market share. One of the most frequently used market penetration strategy is price adjustment. Berly’s can reduce the prices to increase sales. Lowering prices is an effective tactic to attract potential customers. After thoroughly analyzing the prices of Berly’s competitors such as Cadbury and Hershey, Berly’s can either increase prices to show buyers that the quality of own product and service exceeds its competitors or lower them to charm potential consumers with reasonable prices. Berly’s also can invest more time and strength in a promotion to increase market penetration. Advertising is one of the most effective ways to increase brand awareness. Berly’s can create either short or long-term campaigns and structure them according to their budget and needs. However, the thing to be considered is that whatever be the size of the campaign, it must be well-planned and thought-out. Beryl’s able to do a great job in market penetration strategies, especially in the area of differentiation.
Product development strategy is the process of bringing a new innovation to consumers from concept to testing through distribution. When existing business revenue platforms have plateaued, it is time to look at new growth strategies. New product development strategies look at improving existing products to invigorate an existing market or create new products that the market seeks. Beryl’s should take feedback from consumers and find ways to improve upon products. Improving existing products is an efficient method for product development. It is not as expensive as creating a new product because a lot of the time and resources were already devoted to creating the original product. For example, Beryl’s should collect customers’ feedback about the quality of their product and make improvement to satisfy customer. Besides, in long term strategy, Beryl’s can create new product based on customers’ needs and wants. Beryl’s can produce chocolates having fewer calories as people nowadays want healthy food. Beryl’s also can develop new flavor chocolate that meet the local people’s expectation.
It is a process to introduce present products or services into new geographic areas. A market development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments. These new customer groups may already be served by competitors or may not be currently marketed by anyone for the product. Beryl’s should expand their products in rural areas and populated countries like China, India, Russia etc where the demand is more for confectionery products and supply is less comparatively. Beryl’s in those countries had a very big market but has less product distribution. This strategy is reliable since the new channels of distribution are available that are inexpensive and good quality, and since Beryl’s has excess production capacity.
1. Beryl’s can develop new flavor chocolate that meet the local people’s expectation. (S6,O2)
2. Hang banner at location with potential customer. (S2,O1)
1. Beryl’s can produce chocolates having fewer calories as people nowadays want healthy food. (S6,T2)
2. Berly’s need to improve their brand’s reputation to compete with other competitors. (S2,T3)
1. Berly’s can acquire new machine with latest technology to increase their product quality. (W2,O3)
2. Berly’s should produce product with less substitutes. (W3,O2)
1. New packaging to attract more customers. (W1,T3)
2. Purchase and implement new technology to compete with other competitors. (W2,T3)
Fred R. David (2015), Strategic Management, Prentice Hall, USA.
Beryl’s Chocolate ; Confectionery Sdn. Bhd