Salyna AnzaRoni Baghdady

Abdulrahman BaothmanErin BourgeousLaura Reales

Suffolk University

Case Analysis

To DOUBLE or TRIPLE the size of the company within 10 years.

ASSESSMENT SCOPE

Metric 2006 2005 % Change

Sales $11,850,480 $11,991,558 -7%

Overhead $1,993,306 $846,186 +135.6%

Expenses(Administrative & Selling)

$5,312,985 $5,094,088 +4.1%

Gross Profit (After Interest Income)

$6,466,056 $6,614,981 -2.3%

Net Earnings $891,082 $1,069,326 -16.7%

Dividends $0 ($701,870) -100%

CURRENT SITUATION ON THE INCOME STATEMENT

Metric 2006 2005 % Change

Cash $112,185 $750,948 -85%

Total Inventories $1,543,816 $1,550,631 -.4%

Bank Indebtedness

$186,929 $599,146 -68.8%

Long-Term Debt $1,017,679 $1,411,184 -27.9%

CURRENT SITUATION ON THE BALANCE SHEET

WHERE WE ARE NOW:Current (Liquidity) Ratio: .91Inventory Turnover Rate: 1.01

WHERE WE SHOULD BE:Current (Liquidity) Ratio: 1 or higherInventory Turnover Rate: 6 -12

1. Affiliate with FTD2. Open store in San Francisco3. Improve Production

Open Store in Los Angeles

Timeline

More than triple size of the company

2007

2009

2016

WHY?Premium Chocolate Industry Sales in Canada→ $500 MILLIONPremium Chocolate Industry Sales in the US→ $3 BILLIONHow?1. Affiliate Roger’s Chocolate with the floral industry

by partnering with Florists’ Transworld Delivery (FTD) 2. Open a retail store in San Francisco, California3. Advance production

EXPAND TO THE UNITED STATES

Florists' Transworld Delivery (FTD):• Floral Industry Sales in the US→ $30.3 BILLION • 7 out of 10 people who buy flowers will also buy chocolate• Florists’ Transworld Delivery (FTD) sales in 2007→ $613 MILLION• State generating most revenue to FTD→ California

Start off Regional:

• 2007→ Northern Region of California • FTD Florist Shops in Northern Region→ 30 million

• 2009→ Southern Region of California • FTD Florist Shops in Southern Region→ 56 million

STRATEGIC RECOMMENDATION 1: ROGER’S CHOCOLATE IN FLORAL INDUSTRY

STRATEGIC RECOMMENDATION 2: ADD RETAIL STORE IN NORTHERN, CA

323 Geary Street. San Francisco, CA 94102

Cost: $50,000 for 1,000 Square ft Renovation: $25,000Total Cost: $75,000

Union SquareSan Francisco

How?

• Computer-Integrated Manufacturing (CIM)

• CAM (part of CIM) supports on-site, small-scale, semi automated, sensor-controlled baking.• EASY to achieve customizable,

consistent quality.

• DOUBLES productivity.• Cuts up to 80% of time.• Cuts work in process inventory 30-60% • Decreases design costs 15-30%

STRATEGIC RECOMMENDATION 3:ADVANCE PRODUCTION PROCESS

Cost of Implementation (installment costs included)

Cost: $1.3 Million

FTD AFFILIATE COMMISSION:• Roger’s Chocolate receives 10% of each sale including their chocolate• Revenue of FTD in Southern California 2007→ $80 MILLION• Floral & Chocolate Sales in Southern California → $56 MILLION• Roger’s Chocolate Projected Sales→ $5.6 MILLION

PROJECTED EARNINGS SO FAR:

PROJECTED EXPANSION:

By 2009 Expand to Los Angeles• Average Price per square feet: $220• 500 square feet • Total investment: $110,000

2009 FTD’s projected revenue in Southern, CA→ $90 MILLION- Projected sales generated from flowers and chocolate→ $63 MILLIONRoger’s Chocolate Projected Sales in 2009→ $6.3 MILLION

OVERALL PROJECTED SALES FOR ROGER’S CHOCOLATE$5,600,000 + $6,300,000

$11,900,000

TOTAL PROJECTED SALES

Cruise Ships

• PRODUCTION PLANT located in outskirts of Victoria.

• NEAR VICTORIA CRUISE PORT: Busiest cruise port in Canada.

• MOST popular Cruise Ship occupying Cruise Port: Golden Princess.

• Add Roger’s Chocolate to their Food and Dining Dessert menu as well as Gifts and Services.

• Restaurants in ship: Crown Grill and Sabatini’s.

• Purchase $4,000 worth of Roger’s Chocolate every 3 months.

• $16,000 per year in wholesale sales.

OTHER OPPORTUNITIES TO CONSIDERBMW

• 50 locations in Canada.

• Each location purchases through wholesale $2,000 worth of Roger’s Chocolate bi-monthly.

• PER YEAR: $12,000 PER location.

• 50 locations x $12,000 = $600,000 in wholesale sales