Zotter – Living by Chocolate

RSM 490 International Business

Case write up

Zotter – Living by Chocolate

1. Executive Summary and Objectives

Zotter Chocolates is the product of the ingenuity and the innovative mindset of Joseph Zotter (Zotter), an audacious, quirky, and intrepid Austrian entrepreneur. The firm, based in Bergl (Austria), has built its reputation on the creative diversity, the quality of its product lines, and also on sustainable and transparent practices that can be perceived by all stakeholders; altogether allowing the company to possess a solid competitive advantage.

Zotter Chocolates has an organisational strategy focusing more on the quality of its products rather than profits. The company’s operation concentrates on the niche segment of the premium fair-trade and organic chocolate bar industry. Zotter Chocolates only uses organic and fair-trade ingredients, vast varieties of unconventional flavours, revolutionary production techniques (using layering instead of filling methods), and state-of-the-art packaging. As a result, the internal activities of Zotter Chocolates have not only revolutionised the chocolate industry with innovative product lines such as the ‘Handgeschöpfte’, but also have been able to establish a very strong brand image. The brand equity and its reputation are further reinforced by the careful selection of its channels of distribution, the avoidance of a traditional marketing approach, and the information/education provided to consumers about its value chain.

Zotter’s business acumen and the vertical integration of the levels of production achieved proved to be all successful as the firm (based on figures from 2009 given by the report) is profitable, debt-free, and able to re-invest its earnings in new property, plant and equipment in Essen, Germany. It is also important to point out that Zotter Chocolates holds a 4.6% market share of the 5% of fair-trade chocolate sales in Austria.

Building on the company’s success, its tremendous capabilities and its dominance in the market in which it operates, this report will provide Zotter Chocolates with recommendations designed to help the firm grow in the right way. This will be achieved by expanding internationally whilst maintaining consistence with the business’ vision, embodied by an ‘organic philosophy’ and a strong innovative culture.

Advice will be given on how to proceed with progressive international development that will replicate and enhance the existing core competencies of the company and ensure that its operations will not dilute the brand image and/or confuse the existing customer base. Finally, the recommendations will ensure that the company remains the leader of the premium fair-trade and organic chocolate bar market by achieving maximum possible growth in each international venture through a well-thought out distribution strategy and production process.