Lindt & Sprüngli Operations Strategy and Project Management, Case Study Example

Introduction

Lindt & Sprungli’s corporate strategy and analysis has provided them with continual growth and success. A detailed study of their strategic analysis, operational strategy, and strategic and operational goals will provide an understanding of the functions of the company. The corporate strategy will include goals and implementation plans. Operational strategy and project management provides an understanding of how business is concluded and methods for which it can be improved. This paper will focus on assessing the big picture which will include analytical, rational, and systematic side of operations. Lindt & Sprungli has addressed their project management to increase sales and answer the demands of their consumers. In addition it is important to consider the daily business tasks which is where actions and decisions are direct. Lindt & Sprungli has been successful in their business operation and growth for over a century. The analysis of the company’s current position will allow for a recommendations to be made for areas of change and strategic growth opportunities.

Company Overview/ Background

Lindt & Sprungli is a company with a 170 years of success. The company began in 1845 when confectioner, David Sprungli-Scharz and his son, Rudolf Sprungli-Ammann started a small confectionery shop in Marktgasse of Zurich. The company expanded and found success with perfecting their techniques. In 1925, Lindt & Sprungli was founded in New York and in 1986 a manufacturing site and administration building was established in Stratham, New Hampshire. Currently the company is operating worldwide with an estimated 10,712 employees. The company has several subsidiaries including Ghiradelli, Russell Stover Candies, Caffarel, Hfobauer, and Kufferle. Lindt & Sprungli has twelve production sites in Europe and in the United States. “Lindt & Sprüngli attaches great importance to staff loyalty. That is apparent in particular from the extraordinarily low turnover rate over a period of many years in the Group and Extended Group Management” (‘LINDT & SPRÜNGLI Annual Report, p.50). The company made its latest strategic move by acquiring Russell Stover in the USA in 2014 (‘LINDT & SPRÜNGLI Annual Report, p.14).

Consequently, Lindt & Sprungli has evolved into being one of the top three chocolate manufacturers in the world. They are also the absolute leader in seasonal and premium products. “Taken all together, the North-American business contributed around 37 % to total Group sales in 2014 with its brands LINDT in the US and Canada, as well as GHIRARDELLI and the brand portfolio of Russell Stover. The integration of Russell Stover into the group of companies will take the utmost priority in 2015” (‘LINDT & SPRÜNGLI Annual Report, p.5). The European market is the largest source of revenue for Lindt & Sprungli. “Lindt & Sprüngli (Austria) Ges.m.b.H. ended the financial year with sales growth of 7.0 %” (‘LINDT & SPRÜNGLI Annual Report, p.15).

Strategic Analysis

There are many theoretical positions regarding corporate strategy. In 1994, Karl Polanyi addressed the potential for capital markets to limit their own success potentials. “The Great Transformation, which discussed the ways in which the growth of the capitalist market impaired or destroyed its own social and environmental conditions” (O’Conner, p. 12). Polanyi addresses the concerns of how business limit their own potentials by focusing on the wrong elements of business functions. “The results of these and most other modern efforts to discuss the problem of capitalism, nature, and socialism wither on the vine because they fail to focus on the nature of specifically capitalist scarcity, that is, the process whereby capital is its own barrier or limit because of its self-destructive forms of proletarianization of human nature and appropriation of labor and capitalization of external nature” (O’Conner, p. 13).The strategic analysis allows for a top-down look at Lindt & Sprungli, which will identify the strategic element first. Next it will apply the selected framework which finds the goals and aspects of the corporate strategy and positioning for competitive advantage. The strategic analysis will consider the corporate analysis, Porter’s five forces, critical success factors, and Porter’s generic strategies.

Corporate Analysis

Lindt & Sprungli has positioned themselves to be extremely competitive and has taken their growth opportunity seriously. They have found favorable results with their business model, with strong earnings. The company has looked forward to new growth strategies in the years to come which will them at the top of their market (‘LINDT & SPRÜNGLI Annual Report, p.5). “The prices of Lindt & Sprüngli registered shares and participation certificates clearly outperformed once again the SMI growth rate (+ 9.5 %) and recorded an annual plus of 18.8 % and 22.7 % respectively, confirming the investors’ confidence in our business” (‘LINDT & SPRÜNGLI Annual Report, p.4). Their ordinary capital has shown the company’s strategy has been successful. (See Appendix A). The Board of Directors handles all strategies, management, and supervisory duties. The CEO and group management handles the operational management tasks which the extended group management assists with (‘LINDT & SPRÜNGLI Annual Report, p.32).

Porters Five Forces

Michael Porter (1979) created a model to analyze and structure any given industry. It is a theoretical tool which provides insight to the potential threats in a particular industry. There are five forces that Porter mentions which includes suppliers, buyers, potential entrant, substitutes and the rivalry among existing firms. Porter’s Five Forces provides a guideline for companies to maximize their profitability. “While a myriad of factors can affect industry profitability in the short run – including the weather and the business cycle – industry structure, manifested in the competitive forces, sets industry profitability in a medium and long run” (Porter, p.3). The analysis will address the premium chocolate segment which is where Lindt & Sprungli is a key player.

Bargaining power of suppliers 

The production of premium chocolate depends upon access to raw material such as cocoa beans, sugar and milk. There are numerous suppliers for milk and sugar around the world, however the cocoa beans are less available. Premium chocolate comes from cacao trees which are grown in small family farms in Latin America, West Africa and Southeast Asia. The cocoa planters usually sell their products to preparateurs who pay the planters and resell the beans to intermediates. There are an estimated twelve steps in moving the cocoa from framing villages to manufacturing facilities. It is unlikely and very rare when companies purchase directly from the farmers. “In this context, local farmers have no influence on the price that they receive for their beans” (A Guide for Value Chain Analysis, 2004).

Cocoa beans are traded at London’s commodity future exchange where the farmers are price takers. “Given these reasons in addition to the fact that according to CAOBISCO, there are 4.5 million of cocoa farms around the world, to whom the chocolate manufactures are an extremely important customer, the bargaining power of the chocolate confectionary industry suppliers is generally low” (CAOBISCO, 2009). Due to the low production of cocoa beans, the suppliers have significant bargaining power. Some cocoa farmers have formed an association to negotiate the best prices for their beans.

Bargaining power of buyers 

The product differentiation affects the buyer’s power. The buyer has the opportunity to look for substitute because chocolate is a standard product. There is no deny the competition with chocolate manufacturers is severe, which requires producers to find new innovative methods for production. The price sensibility of chocolate is extreme; if the price increases it could cost the manufacturers a large market share if the chocolate quality does not improve along with the price. The buyers can change vendors at any time which gives them a large bargaining power. In the premium sector, the higher prices are considered acceptable if the quality of chocolate is justified. The bargaining power of buyers of premium chocolate buyers is much lower. “Lindt & Sprüngli has set up a network of more than 25’000 cocoa farmers as well as according cocoa collecting points, storage depots and transport logistics” (‘LINDT & SPRÜNGLI Annual Report, p.5). The bargaining power of Lindt & Sprüngli is significant because of vast amount of suppliers they have built relationships with. Retailers have the opportunity to gain power if they pose a threat with production; if the buyer can be their own supplier, it creates a much higher bargaining power.

Threat from Substitutes 

The treat from substitute of products creates a competitive force which can create a cap on the price that the industry can charge for their product. The potential for substitutes which customers can choose from can create a potential risk of profit. The customer can switch at a lower cost when available. The ability for a company to differentiate their product, it can create a uniqueness and lower the potential for substitutes. “Product innovations are likely to play a key role in increasing the share of the market players. Some of the key players include Cargill (U.S.), Archer Daniels Midland (U.S.), and Barry Callebaut (Switzerland)” (Cocoa, np). For Lindt & Sprungli, their premium chocolate segment can minimize their threat from substitutions. The chocolate industry faces many products which can be substituted by consumers. Consumers have many different chocolate snacks including cookies, candy, ice cream and many other options. The buyers have no need to stick to a specific preference of snack with so many options available. The potential for threats of substitutions provides an opportunity for the premium segment to differentiate themselves and to eliminate the potential threats of substitutions.

Intensity of Rivalry 

The intensity of rivalry with competitors can create advertising battles, higher quality of customer service, price wars, and new product lines. The chocolate industry is not an exception, the chocolate producers can capitalize on their product range, by competing in advertising wars and creating new product lines. The high market growth rates for the premium sectors can create additional challenges from the rivalry in the market. The chocolate confectionary industry has to consider the high storage cost and the high fixed cost. The company also has fix costs which include the equipment and facilities necessary to manufacture their products. The growth and demand in the European and Asian market has already produced a growth in rivalry in the market. ”The North American cocoa market is also growing rapidly due to the huge demand for cocoa & chocolate-based products” (Cocoa, np). The access to all the materials needed to make and keep the product can increase the intensity of rivalry.

Threats of New Entrants 

There is a low threat of new entrants in the chocolate industry. Because company’s like Lindt & Sprungli have a long and established history, it makes it difficult for new players to enter the market. Some of the key players in this industry include Nestle, Ferrero, Mars, and Kraft Foods which are experienced companies who dominate the market. The threats for new entrants in the premium segment is minimal. However, the threats of new entrants in the regular milk chocolate segments are high. The new entrants can use experiences of chocolate manufacturers to overcome barriers which would otherwise hinder their starting success.

As a conclusion of this chapter, based on the five forces framework, Lindt & Sprungli has positioned themselves in the premium segment well. The industry is attractive for Lindt & Sprungli because it has established relationships with their suppliers and buyers. It could prove to be very challenging for new competitors to enter into the market and find the same success as Lindt & Sprungli. It makes it less attractive for new competition to be able to establish a strong buyer’s position and securing their suppliers. Lindt & Sprungli has to be aware that there is a threat of substitution, but this is far less of a concern in association with their premium segment. The company does need to keep in mind that it is important to consider all existing threats and the potential for new threats to enter the market at any point. However, the five forces framework does show that Lindt & Sprungli has a strong position in the market to find success expanding into new ventures such as the Café Lindt.

Critical Success Factors

According to Bullen and Rockart, the concept of critical success factors are limited to the number of areas which the satisfactory results will guarantee success in competition for individual, department and or organization. “Critical success factors are the few key areas where ‘things must go right’ for the business to flourish and for the manager’s goals to be attained.” (Bullen & Rockart, p. 7). Lindt & Sprungli holds over 25% of the premium chocolate share. (See Appendix C) The company has created outstanding products which set the standard for quality and creates the critical success factors for Lindt & Sprungli. The most successful products include Lindor truffles, Lindt Hello, premium chocolates, Lindt mild and dark chocolates, and the Lindt gold bunnies. Moreover, according to Consumer Staples, “The company consolidated its position in the North American market by taking over Russell Stover and has advanced to become the third-largest manufacturer of chocolate in the US. Developing and building up a sales structure in emerging markets is a top priority for management, which has set itself the goal for 2015 of raising organic sales by 6-8% and increasing the operating margin by 20-40 basis points following the integration of Russell Stover” (‘Lindt & Sprüngli – Consumer Staples (Switzerland)’, p.1). The critical success factor is the carefully timed expansion, the acquisition of competition, and the focus to reinvent and design their premium chocolate line. Lindt & Sprungli critical success factors is based upon their ability to know when the right time to make a change and when their company can successfully expand without challenging their bottom line. It is also vital to consider the importance of strong marketing competence. Lindt & Sprungli has the heritage: Maitre chocolate Suisse and brand ambassador Roger Federer.

Porter’s Generic Strategies

According to O’Conner (p.14), Marx theorized the importance and vital position of labor power. The labor power is the personal condition of production and is important factor in captivating the premium market. The model for Porter’s Generic Strategies is displayed in Appendix B. The largest threat for Lindt & Sprungli in the premium market is Godiva. “Godiva says overall sales of premium chocolate rose some 7.5% for a recent 52 week period, hitting roughly $1.4 billion in food, drug and mass retailers (not including Wal-Mart)” (Holmes, np). Lindt & Sprungli has capitalized on the premium chocolate market, however they have not eliminated the competition in which they are losing revenue to. “Godiva says its sales are up more than 13% year-to-date, and it expects total sales to top $650 million this year, with nearly a third of that coming from items developed in the prior 18 months” (Holmes, np).  Godiva is continually introducing new premium chocolate options to the market, and expanding their market availability. Lindt has clearly build and sustained their competitive advantage by utilizing the differentiation strategy in their premium sector. They have used their labor power to be able to innovate new products and differentiate themselves from their competitors. Expanding the Lindt Cafes is another method for Lindt & Sprungli to expand their business and maximize their potential in the premium chocolate market. In order to continue success, Lindt & Sprungli needs to focus on product and service differentiation. The strategic goal in differentiation from the competitors includes opening Lindt Cafes worldwide. It provides the opportunity for the company to provide their premium chocolate with exemplary service to consumers around the globe. The strategic goal provides an opportunity for Lindt & Sprungli to offer premium chocolate in a new way.

Lindt is positioned for a competitive advantage over the majority of their competition. They have spent decades perfecting their strategic resources and building relationships with their suppliers. The capabilities of Lindt is endless. They have very strategic goals such as their acquisition of Russell Stover. The operational level have used their vast resources for the company growth and financial increases. Based on Porters five forces it is clear to the see that growth in the chocolate industry is inevitable for Lindt. It was clear to see that the industry for new competitors is not attractive. They have a difficult time entering the market and creating a name for themselves against such established companies. The company has the bargaining power of suppliers which leads to supply network and bargaining power of buyer. It will allow Lindt & Sprungli to use their resources for quality products which will be discussed in the operational strategy section.

Based on critical success factors we have identified the high quality of products and services. The services are linked to the Lindt cafes the company is striving to launch. Moreover, we have identified Lindt’s expansion into the US and emerging markets and the role that it has had in the company’s growth and success. Marketing competence is critical factor in their success. Targeting the right consumers is a vital part of the operational strategies. Finally, based upon the Porter’s generic strategies we are able to conclude that Lindt follows a different strategy in the premium segment. The finding is important for product, design of goods and services and quality management which is discussed in the following operational section.

Operational Strategy

The previous chapter discussed the strategic analysis of Lindt & Sprungli. The company has made decisions that have strengthened their market position and allowed their continual growth. Lindt has utilized their resources and built a strong relationship with their suppliers. They have the capabilities to use their resources to expand by opening LIndt Cafes around the world. Lindt’s goals and actions have been strategic by utilizing the Porters five forces and critical success factors as a guide for business decisions. The goals and actions are also relevant in terms of supporting Lindt’s strategy and positioning. The challenges of the transition of strategic goals into lower levels of the organization have to be addressed prior to launching the Café Lindt. The company is dependent not only on the quality of the product but the services that the new café’s will offer the customers. The operational strategy will address the tactics and expectations for the new venture that Lindt & Sprungli is pursuing. The operational strategy has several key aspects to consider. The goal is to address the ten strategic operational management decisions. Heizer and Render states that the following ten decisions are effective for strategies and targets. “Design of goods and services; managing quality; process and capacity design; location strategy; layout strategy; human resources and job design; supply-chain management; inventory management; scheduling; and maintenance” (Heizer and Render). This section will analyze the supply network, flow, inventory, quality and processes.

Supply-Chain Management

The Lindt & Sprungli is working on investing in Ghana to verify their supply network by 2016. “Introductory phase because products in the introductory phase are still being ‘fine-tuned’ for the market, as are their production techniques, they may warrant unusual expenditures for:  (1) research; (2) product development; (3) process modification and enhancement; (4) supplier development” (Heizer and Render, p.136). Verifying their supply network will allow them to ensure quality products and to help over 45,000 Ghana farmers. “Lindt & Sprungli sources 100 percent of its West African cocoa bean supply from Ghana because of the high quality of cocoa beans in the region. The purchasing model not only guarantees a consistent volume of best quality cocoa beans for the chocolate company, but, through traceability, also the opportunity to positively influence local development” (Lindell). The company is also focusing on a training program for their supply network to ensure that they get the quality that they are striving for.

Capacity Design

According to Heizer and Render the section of flows belongs to the process and capacity design. The company has spent substantial time perfecting the process which works with their consumer and product dement. The product flow is focused on peak seasons and spike in consumer demands. The operational flow requires the company to focus on many different factories and international markets with varying demands. “World market leader of “Premium” quality chocolates, Lindt & Sprüngli offers a broad selection of products in more than 100 countries throughout the world. Looking back, the beginnings of the company goes back to 1845, when a father and his son manufactured, for the first time, a solid chocolate in their small confectionery in Zurich, Switzerland. Today, more than 165 years later, the company has 8 production sites in the world including Oloron Sainte-Marie (64) in France. This plant produces chocolate bars and Christmas & Easter chocolates. Its customers are essentially mass-market retailing names” (Lindt & Sprungli France, np). The seasonal variation creates a change in demand and a shift in the flow of company productions. Peak seasons allow for an increase in manpower and hours which drastically alters the flow of the company production and practices.

Inventory Management

Lindt & Sprungli manufactures their products, making inventory an existing issue for the company to maintain and regulate. It is essential that they have their product available when the customers demand it, but also not too much for excessive waste and storage costs. “President and Chief Executive Officer of Lindt & Sprüngli (USA) Thomas Linemayr describes the new commerce site, which is built on IBM WebSphere Commerce platform and CrossView’s Aurora Plus Commerce on Cloud offering, as a premium storefront where consumers can experience the Lindt brand — like browsing in a department store featuring all things chocolate. This includes a portfolio of up to 600 SKUs — virtually every size, shape and type of chocolate imaginable, including a wide assortment of the brand’s iconic LINDOR truffle” (Ackerman). Inventory management is crucial for Lindt’s success, and the company’s focus on design of goods and services is vital for the Lindt Cafes. According Lindt Chocolate, the café provide a variety of chocolate drinks, chocolate cakes, and premier chocolate candies. Many of the products are made daily and inventory is based upon sales. It ensures the product is available for customer demand with minimal waste of inventory.

Managing Quality

Lindt & Sprungli is notorious for their quality product. The manufacturing and inventory mandates that the product is kept in a manner that will not compromise the quality of their product. According to Lindt-spruengli.com managing quality is a top priority for Lindt. It includes a stringent testing process that is conducted on several different levels of raw material all the way to the finished products. The company verifies the product uphold the high quality standard of all products prior to it leaving the factory. Managing quality requires a careful evaluation of all of the distribution channels for the products and that the methods in which the product is stored enforces the quality control system. Manufacturing, storing, and shipping is a vital part of maintaining the quality and integrity of Lindt & Sprungli. Quality is an essential attribute for sustaining the Lindt’s strategy. The strategy and operational processes must support the ideals of managing quality. Failure to maintain the integrity and quality of the product will challenge the direct success of the proposed Lindt Cafes. A crucial factor of Lindt’s success is the quality that each product contains. Managing quality is not an optional operational practice.

Processes and Capacity Design

The company’s processes are detailed. From the product design, manufacturing, advertising, and transportation to the consumer, all processes are focused on maintaining the integrity of the product. The company depends on their innovative recipes which allow the customers to place their trust in the quality of Lindt & Sprüngli’s premium quality chocolate products. They utilize high quality ingredients, responsible behaviors, proprietary product processes, up-to-date production equipment, and quality control of their product to maintain the top product for their consumers. The flows of the production is obtaining quality supplies to manufacture the chocolates. Once manufactured and the quality validated, the product is shipped to consumers, retailers, and café shops for sale. The flow of the processes only has a few steps and the company ensures that the product adequately represents the name it carries. The processes are under continual review to ensure that maximum profitability is reached and quality is never compromised.

Strategic and Operational Goals

The expected outcome of the Lindt Café is that they will find a substantial amount of success. The operational measures are dependent upon overall available resources, capabilities, goals and actions which support Lindt’s overall strategy and positioning. The company has spent decades building relationships with their suppliers, ensuring they have the best resources available for their new venture. The capabilities of the company are endless, they have the capital, expertise, and quality associated with their name. The goals and actions of the company are clear, they are moving forward with new methods to capitalize on their target markets by finding new ways to reach their consumers. Heizer and Render addressed ten decisions that Lindt & Sprungli need to consider for effective targets and strategies. They have to manage their quality; provide a quality design of services and goods; secure a layout strategy of the new Lindt cafés; manage inventory; implement location strategy; secure their process and capacity design; validate the job design and human resources; maintenance; scheduling and supply-chain management. Lindt has utilized their resources and implemented a strong operational strategy.

We found that opening up new Lindt Cafes worldwide would strengthen Lindt’s differentiation strategy and strategic positon. It is important to consider that the Lindt Cafes are already existing in Australia, but the expansion of the cafes to new locations will be extremely profitable for Lindt & Sprungli. This leads to our new project. By using the Stage Gate Methodology we simulate how and why Lindt Cafes should be open in major US and European cities. The experiences with the Lindt Cafes in Australia has provided a method for Lindt to pursue our differentiation strategy. The stage-gate model will provide insight for analyzing the best methods for pursuing the new Lindt Cafes in Europe and the US.

Stage-Gate Model

Robert Cooper stated that “Developing and delivering new products that are differentiated, solve major customer problems, and offer a compelling value proposition to the customer are the top drivers of NPD success and profitability” (Cooper, p.3). The first step for Lindt is the discovery process. The company has determined that Lindt Café is the new focus for their strategic focus. Next Lindt needs to scope the market to find locations that will suit the economic and consumer demands for a premium chocolate café. The business case requires a detailed investigation of the primary research. The company conducted this in the strategic analysis and operational management sections of this paper. The considerations include both market and technical analysis’ of the Lindt Café. The project justification is the need for Lindt Cafes as a means to expand the premium chocolate market for Lindt & Sprungli. The proposed plan for development is to establish upscale locations for the new chocolate store. The development requires the store designs, the product to be sold, and the requirements of the staff. The focus of the company is not only the product but services that the new Lindt Cafes will provide. A testing will be conducted in the launch locations to determine if the new venture is performing as expected. Marketing and product will be analyzed at this point in the stage-gate. Lastly, once all steps have been validated, the launch of the new locations will be implemented. According to Cooper, most US companies utilize their product development to implement and adopt some type of stage-and-gate processes for their new product.

Project Plan

The project plan will take each step of the stage gate approach to implement the new Lindt Cafes. It is important for the project management view point to establish the activities that will take place at each step of the gate. The first stage is the discovery stage. The company has already determined that the next step in their business ventures is to launch the Lindt Cafes in Europe and the US cities. The next stage ties the discovery to the scoping. Location selection is key for the success of the Lindt Cafes. They have to determine locations that are cost efficient with consumers who have the residual income to spend on premium chocolates. The business case is where Lindt establishes the market research. What products will be sold and what pricing needs to be implemented. It is where the marketing and technical factors validate the project justification. Developing the Lindt Cafes consists of the upscale store design and staffing the location with service oriented employees. Testing is vital for success of the Lindt Cafes. The company needs to ensure their venture is successful prior to launching multiple stores. Finally, the project plan determines the launch of the Lindt Cafes. The company will determine the launch and locations of each Café in Europe and the US based on established date.

Conclusion, Recommendation, and Limitations

As a conclusion, the outcome of the strategic and operations analysis supports the implementation of the Lindt Cafes. The findings of the strategic and operational analysis shows that Lindt has positioned themselves to move forward with the Lindt Cafes. They have carefully build their resources, capabilities, goals and actions. The company can find substantial success with their new venture if they utilize the strategic and operational goals adequately. Lindt & Sprungli industry analysis shows that chocolate confectionary industry is stable and the growth opportunity in its existing market is limited. The prospect for the premium chocolate segment however is growing due to the growth of environmentally friendly and healthy lifestyle consumers. Lindt & Sprungli has capitalized on this opportunity which has allowed them to perform above average. The company’s strategy has positioned them in a manner which will allow them to overcome the environmental challenges which may arise. The company’s focus on their premium market has aided in their success. Their conservative approach to expansion and new products has minimized their risk and increased brand loyalty. With all the competition entering the market, Lindt & Sprungli has had to establish a new defensive strategy. The concluded deduction shows that the company should shift their focus to regional diversification and establishing new product lines which provides an opportunity for Lindt & Sprungli to remain competitive and at the top of their market

Recommendation

The first recommendation according to our project is to open the new Lindt Café Shops in major US and European cities. The potential for success is substantial, and Lindt need to utilize their resources to move forward with their proposed project. As a second recommendation Lindt & Sprungli should consider the opportunity to expand into emerging markets. According to the Cadbury Annual Report the research of the chocolate industry that was performed by the Euromonitor shows the growth in the market reflects around sixty-percent of the target value. The growth reflects a three-percent annum over the past five years. The growth of the emerging markets represent the forty-percent of the remaining total values, which has been a solid ten-percent annum. Innovation is a major driving force for emerging markets were premium is a prevailing ideal. The population growth and growth of economic positions has created a higher demand in the luxury market.

Lindt & Sprungli needs to take advantage of the opportunity for expansion into emerging markets. According to the Lindt & Sprungli Annual Report, the growth in China and Hong Kong provided double digit returns for the company. Expanding into new markets need to be aggressive, capitalizing on opportunities prior to competitors. There are many competitors entering emerging markets, so Lindt & Sprungli efforts needs to be far more extensive. The company needs to use marketing and continually strive for improvements. Lindt & Sprungli has to move faster than their competitors in order to capitalize on emerging marketing opportunities.

The first recommendation is to open Lindt Café Shops. One of the first considerations would be to open premium Cafes within the United States. European cities should be a focus for these cafes as well. The company can diversify its competitive advantage by expanding their product line into cafes. The company can use its brand reputation by expanding the product into the Lindt Café Shops. The shops should start in big cities because of the opportunity and high income level with is available.

Limitations

There are limitations of this work due to the shortage of available information regarding the operational strategy analysis. There are very few premium chocolate cafes operating, so gaging the potential for success is dependent upon independent studies and market analysis. Lindt & Sprungli can launch trail Lindt Cafes to determine how the market will respond to the new proposed venture. The proposed success is based upon the company’s strategic analysis and operational management thus far. Therefore the limitations will require the launch of test locations to establish a solid likelihood for success.

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