Strategic Branding and Quality Management of Godiva Chocolates

Godiva Chocolates stands as a prime example of successful strategic branding and quality management in the luxury food industry. With a history dating back over 100 years, Godiva has maintained its position by implementing comprehensive marketing strategies that emphasize brand excellence and customer relationship management. The company's focus on product design and presentation is evident through their meticulously crafted chocolate boxes, ensuring an exceptional consumer experience. Operational processes are optimized for efficiency while maintaining high quality, aligning with Total Quality Management (TQM) principles. Godiva's commitment to innovation in both products and strategic approaches has allowed it to thrive globally. This analysis explores the integration of strategic management theories such as relationship marketing and competitive strategy, which contribute to Godiva’s sustained success and recognition as a leader in fine chocolates.

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Executive summary
The U.K chocolate industry is the largest within the European Union which holds around more
than the about 30 percent of the entire European market, where the British citizens consumes
more chocolates than the citizens of any other nation. Inside the system, an average adult
considerably consumes more than 3.5 billion pounds worth chocolates each year than compared
to the children. Godiva is recognized as of the most renowned and finest chocolate makers of all
times. The Godiva confectioneries are available from Belgium to Dubai, which is loved and
appreciated by all, in over more than 80 countries. Godiva is classified as one of the most
dedicated, excellent and innovative chocolate maker in the Belgian tradition for over more than
80 years of time.
This report deals with the complete external and internal analysis of Godiva with respect to the
entire chocolate industry, using the principles of PESTLE and 5 forces framework. The
competitive advantages of the company have also been identified using porter’s generic
strategies along with the market, products, services and the methods of expansion.
This report helps analyze and understand the operations and the factors that are instrumental in
identifying Godiva as one of the reputated and the finest chocolate brands of the world.

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Table of contents
Introduction......................................................................................................................................3
External analysis of Godiva.............................................................................................................4
PESTLE analysis of the macro factors........................................................................................4
5 force analysis of the micro factors............................................................................................7
1. Threat of the new entrants....................................................................................................7
2. Threat of substitute products................................................................................................8
3. Rivalry..................................................................................................................................8
4. Bargaining power of the buyers............................................................................................8
5. Bargaining power of the suppliers........................................................................................9
Internal analysis...............................................................................................................................9
Identification of the competitive strategies....................................................................................11
1. Cost Leadership..................................................................................................................11
2. Cost differentiation.............................................................................................................11
3. Cost focus...........................................................................................................................11
4. Differentiation focus...........................................................................................................12
Strategic directions........................................................................................................................12
 Market.................................................................................................................................12

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 Products..............................................................................................................................13
 Services...............................................................................................................................14
 Market expansion................................................................................................................15
Conclusion.....................................................................................................................................15
References......................................................................................................................................17
Appendix........................................................................................................................................20

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Introduction
The U.K chocolate industry is the largest within the European Union which holds around
more than the about 30 percent of the entire European market, where the British citizens
consumes more chocolates than the citizens of any other nation. Inside the system, an average
adult considerably consumes more than 3.5 billion pounds worth chocolates each year than
compared to the children. The entire chocolate market can be segregated and broken down under
chocolate assortments like boxed, count lines, molded bars, seasonal, straight lines and other
assortments (Eden and Ackermann 2013).
One of the prolific chocolatiers of the United Kingdom is Godiva. It was found in the
year of 1926 with its headquarters located in the New York City. Godiva is recognized as of the
most renowned and finest chocolate makers of all times. The Godiva confectioneries are
available from Belgium to Dubai, which is loved and appreciated by all, in over more than 80
countries. Godiva is classified as one of the most dedicated, excellent and innovative chocolate
maker in the Belgian tradition for over more than 80 years of time. The company initially started
its journey with collaboration with the Campbell soup company. It begun its new journey after
disassociating from the Campbell soup company and was acquired by the Turkish company,
Yildiz Holding, which is one of the leading providers of food and beverages.
Despite being one of the renowned brands as the manufacturer of finest chocolates the
company comes across several notable challenges. The challenges have been cited briefly.
 The transitional drifting from the Campbell soup company needed the Godiva to perform
individually without relying on Campbell’s operational strategies with minimum

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obstruction and disruption in the business operations that Godiva had been following
(Rothaermel 2015).
 The rising competition in the chocolate industry can be a possible threat and challenge for
the company since a new brand can pose a probable threat for the company’s competitive
nature.
 The name of the company has been adopted from the title of a Renaissance painting
“Lady Godiva by John Collier” and some other medium term companies have been using
the same name for the propagation of their business. This similarity in the name can
create serious confusion and infringement in the intellectual rights property as well as
establishing of other’s business using the chocolate company’s name, which was
registered in the first place before the other companies (Grant 2016).
 The other significant challenges are failure of new products in the market, increasing cost
of the raw materials, disintegration of the potential partnership, seasonal demands of the
chocolates (Slack 2015).
External analysis of Godiva
The external analysis of the Godiva’s macro and micro environments has been done
using PESTLE and 5 forces framework.
PESTLE analysis of the macro factors
 Political – In the perspective of the UK administration, the changes within the
government from the legislation to the Conservative or the Liberal democrat is clearly
considered to lay its impact on Godiva. By the estimates the workshops of Godiva has
employed around 3000 skilled workers. However, the tough restrictions in the entry of

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the skilled worked force or the chefs from all around the world can severely affect the
business and the operations related to the recruitment and the hiring decisions of Godiva.
The imposition of taxes as well as the increase in the percentage can also affect the
business of the company. A higher tax percentage in one of the crucial factors that is
influential in determining how Godiva would manage and control its investments and the
reimbursement to its shareholders. Let us say for instance, the value added tax rose to a
2.5% in the year of 2010, increased the chocolate prices, and reduced the sales. Even
despite that the company has made an annual sales of around 500 million, although the
company had decided to call the collaboration under circumstances that the concept of
chocolates and does not fit well with the strategies of the collaborated company it
continued to comply with the legislation policies and flourishing till this day. The
company has even followed some concession policies of selling its chocolates and the
other products to its consumers, without any imposing any value added tax, at an
extremely nominal price despite the impositions by the government (Scholes 2015).
 Economic factors - although the global economic downfall did severely affect the
company and seriously laid impact on the expansion plans of the company, owing to the
reductions in the dispositional income of the customer as well as the other stakeholders,
the turnover and the annual sales of Godiva continued to remain steady and booming in
its own terms. In fact, Godiva succeeded in gaining 30% higher profits in its annual
turnover from the sales of the exclusive truffle gift box, the chocolate snack box. Even
though the recession played its hand, the company managed only to hit the lower part of
its 6% to 8% for the year of 2009, in the peak of the recession.

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 Social factors - The main emotion that attaches with the social worth of this company is
the name and the logo. With one respect, Godiva was born out of the results of the social
factors. The entire Pierre family was considerably in the chocolate making and was
metaphorically, the chocolate factory. The family members carried the entire logistics
from manufacturing to delivery to the respective patrons who relished on the final
product with delight. With incorrigible passion for the art of chocolate making that
deserved and evocative status, Godiva was carved out of an inspiration from the zeal,
valor and bigheartedness of Lady Godiva from an old English fable, which became
symbolical with the luxurious chocolate brand and it became the universal emblem of the
brand ever since (Giacalone and Rosenfeld 2013).
 Technological factors - The technology has changed the face of the company starting
with the introduction of better production as well as packaging process over the
progressing years, which begun with the installation of brew machines to blend the coffee
and cocoa beans. The recent moves include the use of pathogen and unique texture
blending systems and filing patent of heat resistant chocolates (Goffin and Mitchell
2016). Apart from this Godiva has a unique and excellent website that it depends upon to
create its brand awareness. The company also uses the website as an ordering facility and
propagating the reputational concerns among the customer relationship (Peppard and
Ward 2016). The customer relationship management tools have been further strengthened
with the special feedback management strategy to keep a track of the changing trends and
demands.
 Legal - The regulations of the business involves the application of the legal framework to
keep a track and control of the business with compliance to the legal provisions in the

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law. Godiva had been operating its business with compliance to the legal framework of
the government. For example, there had been some disputes between Godiva and a few
other companies. A company known as Cool Brands International (A Canadian
Company) was into the ice-cream manufacturing business so Godiva alleged dropped the
case of taking up the same idea to avoid any other legal complications. Godiva did not
want to enter into a business that alleged violated any of the business policies. There has
also been an issue related to the use of the company’s name by the other firm to use it for
their personal gratification, which was a clear case of intellectual infringement.
 Environmental - Godiva is one of the reputated companies that face direct or indirect
competition from the other companies in terms of business and chocolate manufacturing.
Lindt is a Swiss company that competes directly with Godiva and one of the influential
factors to boost the sales to sky high all across the globe. Other companies like Cadbury
have also exhibited a significant boost in the sales of its products in terms of volumes.
The rising consumption and the consciousness regarding the health benefits from
chocolates is also one of the significant environmental factors that affect Godiva.
5 force analysis of the micro factors
1. Threat of the new entrants – To identify from the perspective of the present incumbents
and the profitable markets that yields high returns would certainly attract newer
companies in the same industry. This can probably result in the rise of many new
competitors and would eventually lead to the reduction in the profitability for all the
companies involved in chocolate manufacturing (Madsen and Walker 2015). This would
be inevitable unless the current performers blocks the entry of the new companies as well
as the abnormal rate of the profits would tend to be nil, which is also known as an

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incorrigible perfect competition. From the concept for the entry of new competitors and
the higher barriers certainly means the higher capital incurring cost of getting inside the
arena would purposely make it difficult to compete with the existing subjects (Baker
2014).
2. Threat of substitute products – The existence of products, which are outside the sector
of the common product segment that fundamentally meets the similar needs of the
customers, would purposely increase the need to switch and prefer the alternative. This
should not be necessarily confused or mixed with the products that are being offered with
the competitors. Say for example, Godiva is an exclusive chocolate making company, if
the people find it difficult to afford or lack the urge to buy the products, they would shift
towards other alternatives, mostly non chocolate snack like, dry fruits, biscuits, crisps,
frozen yoghurt and energy drink that can compensate for the sweet cravings. While
considering the facts that chocolates can used as gift, in that case other traditional
materials can also be used to meet the purpose like dry fruits, bible or any other
assortment.
3. Rivalry - For the chocolate-making industry, the intensity of the rivalry is one of the
major determinants related to the competitiveness of the industry. This includes the
number of the companies that are operating using the same business as the foundation of
the rivalry as well as how their competitive actions reduce their profitability (Chang
2016). Other companies present a challenging business scenario in terms of the
availability of the rivalry. Companies such as Nestle, Cadbury and Hershey threaten the
profitability division of the highly intricate market of Godiva (Willcocks 2013).

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4. Bargaining power of the buyers – The bargaining power of the customers can also be
defined as the market outputs. It is mostly the ability of the customers to put the company
under pressure, which in turn affects the customer’s sensitivity towards the price changes.
In this case, Godiva is an exclusive chocolate company that offers its final output in an
attractive casing, adding up the respective charges including the tax to the final product.
The ability of the customer to manipulate the final pricing of the products is classified
under the bargaining power of the customers. This bargaining of the final price not only
disturbs the pricing strategy and the company’s profitability but it also affects the supply
and demand structure. Therefore, it can be said that in the demand and supply chart, if the
supply surpass the demands, then it can be considered that the buyers possess more
power than the suppliers do and vice versa.
5. Bargaining power of the suppliers - The bargaining power of the suppliers is defined as
the market inputs. In case of few substitutes, suppliers of the raw materials, labor and
services to the company can source of power over the company. Suppliers of Godiva can
refuse to work or charges excessively for the unique components, which can in turn affect
the stability of Godiva. This is considerably one of the five forces, which can lay a huge
impact on Godiva.
Internal analysis
Based on the internal analysis, the value chain of Godiva is based on the development of
the organization, the customer satisfaction, use of newer technologies, expansion of business,
good relationships with the other companies, development of new products and services
(Krajewski, Ritzman and Malhotra 2013). All of these objectives can be explained in terms of
quality, speed, dependability, flexibility and cost. In terms of flexibility, Godiva ensures that

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every step of the production, all the strategies are maintained and meets all the objectives as
mentioned. The technological advancement and the machinery which produces more than 100
types of chocolates indicates that Godiva needs to invest more in the machinery to ensure higher
quality (Alexander 2013). As per the need for technical advancement and quality management,
Godiva did so by adding more machinery in the arsenal. Taking care of the customer service and
demands was one of the significant steps taken by the company to achieve its valuable
reputation. Since it is the commitment, which links Godiva with the customers and it has been
achieved by providing the value added services to the company’s respective patrons. Godiva not
only maintains good relations with its consumers and customers but it also prioritizes its
relationships with the respective retailers and the suppliers (Goddard et al. 2012). The
maintenance of the quality of the products by Godiva ensures a good conformance related to the
promised quality of the products that includes the costing and the dependability. The assurance
of the high quality as promised by the company also ensures higher customer satisfaction, more
dependability and higher revenue based on the cost differentiation principles. To increase the
speed of the production Godiva has implemented advanced technologies and machineries to
increase the speed of the production. As a result, higher speed in the production has ensured less
cost, inventories and risk, with higher dependability. The higher dependability of the customers
on Godiva chocolates have been met by reducing the delays and increasing in the speed of
production based on the products that has been in demand and by reducing the time of delivery.
With the higher rate of dependability, Godiva has managed to generate more customers with its
prompt response strategies (Kumar and Reinartz 2012). Godiva has been able to change its
operational activities in one way or the other. The company has not only manipulated its
flexibility in terms of operation but it implied its flexibility strategies in terms of products,