HABITUAL CHOCOLATE: EXPANSION OPPORTUNITIES.
Read the case study “Habitual Chocolate: Expansion Opportunities” from the Harvard Business CoursePack.
Prepare a business letter addressed to the owner’s partners. This letter should include an introduction (generally, what you have been asked to do or evaluate), analysis and findings (goals and ambitions, present state, and baseline assessment), your recommendations (what you believe they should do), and a conclusion (generally thanking them for the opportunity to provide them guidance on the subject).
Address the following questions regarding Habitual Chocolate’s operations in your letter:
What are the pros of the business?
What are the cons of the business?
What implications can be drawn from this analysis?
Address the following questions regarding the industry in your letter:
Do the industry conditions have an impact on the owner’s decision?
What are the advantages of selling the product in Southwestern Ontario?
What are the disadvantages of selling the product in Southwestern Ontario?
Prepare financial statements (income statements and balance sheets) for the next three years. First, create a baseline pro forma projection (Scenario I), assuming the business continues in the current location; Second, create Scenario II, assuming the company expands into Woodstock for its manufacturing operations (the Woodstock option). Use the financial data provided in the case for constructing both scenarios. If you need to make assumptions to complete the income and balance sheet accounts, annotate the assumptions you make. These annotations can be the right of your financial statements or notes following the financial statements.
Finally, address what Habitual should do next (make recommendations on staying where they are or expanding to Woodstock), paying particular consideration to their ambitions, goals and concerns that the Western Fair Farmers’ Market may prohibit manufacturing (of chocolate) within the next five to ten years.
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