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ROGERS’ CHOCOLATES (C): JANUARY 2008
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Charlene Zietsma wrote this case solely to provide material for class discussion. The author does not intend to illustrate either
effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying
information to protect confidentiality.
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Copyright © 2008, Ivey Management Services
Version: (A) 2008-10-24
Things were looking up. In October, sales and margins had begun to trend upward, and the Christmas
season had finished well, though Rogers’ Chocolates (Rogers’) had not met its targets for 2007. Ray
Wong, the vice-president of production, had been terminated in October, and Steve Parkhill, the
company’s new president, had taken control of manufacturing himself both to give the plant the attention it
deserved and to avoid the costs of another salary in replacing Wong. Parkhill commented:
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We have to be growth ready and develop a scalable operation and we can’t do that without
control over our manufacturing. We need to ship product consistently and we need to
manage our costs better.
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When Parkhill took over the plant, stock shortages stopped almost immediately, for the first time in years.
Kate Phoenix, vice-president of sales and marketing, who had previously announced her planned
resignation, decided to stay indefinitely. Both she and Bjorn Bjornson, vice-president of finance and chief
financial officer, agreed to purchase more stock and recommit to the business.
In the meantime, Rogers’ had been offered two promising retail opportunities. The first was in the
redevelopment of the very busy Nanaimo ferry terminal, which previously had poor facilities but was
undergoing a total redevelopment to an upscale retail space. The new space would be ideal for selling
chocolate and ice cream, and, although the lease costs were high, the possibility of success seemed
promising.
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The second opportunity was even more interesting: a lease in what was arguably the best retail space in
Victoria, a location that had previously operated as the Sidney Reynolds china shop across from the
Empress Hotel in the Inner Harbour area at the gateway to Government Street boutique shopping. At 1,800
square feet of retail space, including a mezzanine, and a 1,600-square-foot basement, the space was bigger
than a typical chocolate store, but Rogers’ couldn’t pass up the opportunity. As an added bonus, the
property shared its basement wall with Sam’s Deli, a well-known Victoria eatery that Rogers’ had
purchased in 2004, and the landlord had agreed that Rogers’ could knock out the wall to expand Sam’s
kitchen facilities if desired.
This document is authorized for use only by VASILIKA KUME at Tirana University until November 2012. Copying or
posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860.
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The executive team of Phoenix, Bjornson and Parkhill had kicked around several alternative concepts for
the Sidney Reynolds space. It was too large to be just chocolate (and too close to the flagship store), and
any use had to be consistent with the Rogers’ brand. They considered an old-fashioned candy store, a
Norman Rockwell–style soda fountain, a coffee shop, a tea house and even a chocolate museum. The space
was large enough to host birthday parties, and large windows faced Government Street on one side and the
Empress Hotel on the other side, with the Inner Harbour visible from both. Rogers’ could also move the ice
cream operation out of Sam’s Deli and introduce “Sam’s Express,” a ready-made sandwich line for quick
pickup at Sam’s. Sandwich throughput could be substantially increased in this way. The Rogers’ team was
very excited about this opportunity.
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At the same time, the board of directors was also recruiting a new investor to replace the one who had
expressed desire to sell in September. The new investor, who would need to put a significant stake into the
business, would also be on the board of directors. A potential candidate with substantial retail expansion
experience visited Rogers’ to tour the facilities. Parkhill explained the company’s plans for the future and
waxed eloquently about the Sidney Reynolds possibilities.
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“That’s great,” the potential board member said, “but you could be going off-focus. What is your strategy?
What do you want to be when you grow up?”
This document is authorized for use only by VASILIKA KUME at Tirana University until November 2012. Copying or
posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860.