MBA Casebook
2020-2021
© 2020 NYU Stern MCA
Chococo
Authors: Justin Sable, Sam Knopf, Molly Joyce (Stern ‘20)
[Interviewer-Led]
Quant: 4
Structure: 6
Case Prompt:
Chococo is a premium chocolate company based in Lima, Peru. The company has been operating profitably in
its first few years of business and is now looking to expand into the United States. What should Chococo
consider before launching this expansion?
Case Overview:
Overview Information for Interviewer:
Industry: Consumer Goods
•
Case Type: Market Entry
Concepts Tested:
• Market Sizing
• Brainstorming
© 2020 NYU Stern MCA
The case will test the candidate on two concepts:
•
Market sizing. The first part of the case is to have the candidate
estimate the addressable market size ($).
•
Brainstorming. The second part of the case asks for potential
qualitative risks and has the candidate determine the best channels
with which to enter the US.
•
Note: No final recommendation question exists at end.
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*Quant indicates how much math is involved and Structure represents the
level of difficulty around developing frameworks. 1 = Easiest, 10 = Hardest
Chococo: Case Guide
Clarifying Information:
•
Time frame: Chococo is looking to enter
the US immediately.
•
Operations: Currently, Chococo only
operates in Peru and only sells chocolate
in stores.
•
Pricing: Chococo sells their bars for the
same price as competitors.
•
Financials: Chococo made $100M in
revenue this past year.
•
Market growth: Premium chocolate
industry has seen strong growth (>10%)
for each of the past few years.
© 2020 NYU Stern MCA
Interviewer Guide:
•
A Good Framework Will Mention:
o Market factors
o Size of premium chocolate industry in US
o Competition
o Customer preferences
o Chococo’s capabilities
o Capacity (manufacturing, resources)
o Operations (distribution, marketing)
o $$
o Factors to consider upon entrance
o Differentiators (organic, fair trade, quality, unique ingredients)
o Channels (stores, online)
o Regulatory issues (FDA, other US gov)
•
A Great Framework Will Mention:
o Additional factors to consider upon entrance
▪ Competitor response
▪ Opportunity cost to entering alt country
o Additional channels/revenue sources
▪ White-label (hotel, company gifts)
▪ Chocolate of the month club / subscription service
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Chococo: Question 1
Question #1: US Premium Chocolate Market Size
•
What is the size of the premium chocolate industry in the United States?
Notes to Interviewer:
•
This is an example response. Answers may vary as there are several ways to approach the addressable market size. If candidate
estimates a market size that is significantly different than $4B, gently guide candidate to pressure test assumptions. Analysis can be
done by gender or by age cohort.
US Total Pop = 320 M
Male
Women
Gender (50/50)
160M
160M
% who purchase chocolate
30%
60%
% who purchase premium
20%
33%
Avg # of bars purchased per year
5
10
Avg price per chocolate bar
$10
$10
Total Market Size ($ USD)
$480,000,000 $3,200,000,000
•
•
Great answers will include assumptions of growth of the premium chocolate industry and how that will affect Chococo.
Follow up question: Chococo is comfortable moving forward if they reach $100M revenue by year 2. Should they move forward with
their market entry plans? Candidate should estimate the percentage of the market Chococo would need to capture (~3% = $100M/$4B)
and determine if that is feasible.
© 2020 NYU Stern MCA
159
Chococo: Question 2
Question #2: Risks of Entering
•
•
What are some risks associated with entering the US market?
Note: If the interviewee already discussed risks in framework or if time remains, ask them to come up with additional risks, dive deeper,
assess severity and/or discuss ways to mitigate risk.
Notes to Interviewer:
•
A good response may include:
•
Competition
• Highly saturated market
• Difficult to build brand awareness (need to differentiate brand)
•
Implementation
• Establishing shipping connections
• Obtaining FDA/government approval (timely, costly)
• Production capacity (raw materials, labor, facilities, storage)
•
Relationship
• Have to develop relationships with customers and vendors
•
Financial
• Loans, currency exchange issues, lack of liquidity
•
A great response will rank the risks in order of magnitude and provide examples of how to mitigate these risks. For example, they
could label the risks high/medium/low and discuss ways to differentiate their brand such as package design, unique taste profile, etc.
© 2020 NYU Stern MCA
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Chococo: Question 3
Question #3: Channels of Entry
•
•
Through what channels should Chococo enter the US market?
Note: Push the candidate to create an exhaustive list. A strong candidate will rank these channels by certain criteria to come up with a
prioritized list.
Notes to Interviewer:
•
•
•
List of potential channels:
•
Online (own website or Amazon)
•
In retail stores (grocery or specialty chocolate)
•
Coffee shops
•
Chococo branded store
•
Alternative
• Partnerships
• Subscription services
List of potential criteria to evaluate:
•
Ease of implementation (startup and continuous)
•
Financial return (margin)
•
Consumers reached and converted
A great response will provide a final recommendation for best channel(s) to enter and may include a potential timeline or prioritization.
Probe for recommendation if candidate has not provided or time permits.
© 2020 NYU Stern MCA
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