Case Analysis On Schmitten - : Strategic Management

CASE ANALYSIS ON SCHMITTEN – STRATEGIC MANAGEMENT
MODULE- STTRATEGIC MANAGEMENT

NAME- PRIYANSHI GANDHI
BATCH- BBA-LLB 2016-21
INTRODUCTION
A chocolate fantasy, like never before, “Schmitten” has been crafted with immense care. It’s
not just about the world-class Swiss technology or the consistent taste. It’s not even about the
unmatched quality that every tablet of Schmitten comes with. It’s all about the personal touch
that each bite, each tablet of your favorite Schmitten offers. An experienced & inventive team
works on making the chocolate a delight for your senses. Not one stone is left unturned when
it comes to the machinery used, maintaining the process parameters, the raw materials and
finally, the classy packaging. All this, to ensure that each Schmitten makes you want to
immerse yourself into a fantasy world of your own.
THE RAJHANS DESAI JAIN GROUP
The Rajhans (Desai-Jain) Group stands as an example of a successful journey that has
changed the lives of many people. Spearheaded, managed and run by the first generation of
young and dynamic entrepreneurs, the success story of the group started in the year 1990 with
its very first project in the Edible Oil Refinery. This success gave the momentum and
confidence to venture into the field of textiles. RAJHANS SILK MILLS PVT. LTD. was
setup at Sachin in the year 1997. In the year 2000, the dynamism and foresight of the
management gave a new direction to the entertainment industry of Gujarat, setting up an
ultra-modern, luxurious and versatile Cinema House, RAJHANS PRIME CINEMA, at
Surat. With time and success on the group's side, the company soon ventured into Real Estate
- the fastest growing industry in India. In the short span of 10 years, the group has undertaken
various projects ranging from Commercial Complexes, Shopping Malls, Residential High-
Rise Apartments, Bungalows and Row Houses. Today, Rajhans Real estate's construction
sites are spread across Gujarat and run into millions of square feet, making it one of the most
trusted and valuable brand in the state. The group also envisaged enormous scope and siege
opportunity in Hospitality Industry with investments in Boutique Hotels at different locations
across the country. Projects have already commenced at Shirdi, Mahabaleshwar, Mt. Abu,
Udaipur and Vaishnodevi.
In recent years, the group has planned to penetrate into the one of the most fascinating
Confectionery Industry, manufacturing quality chocolate of international standards which is
presently dominated by the multinational conglomerates.
MOTIVE TOWARDS SETTING UP A CHOCOLATE UNIT
Rajhans started as an FMCG company with its edible oil business. After establishing a good
market share in Real Estate, rajhans thought of establishing a brand. A brand which an entire
nation can know of and with which it can be associated with. Chocolate still being a luxury
product in India and with Rajhans always getting into high-end, luxury businesses, thought of
taking a challenge and entered into this brand. There are only 2 major players in this industry
in India and nobody else has been able to survive. It is very challenging and exciting for them
at the same time.
GROUNDWORKS AND SURVEYS
Multiple visits were made to different parts of Europe (Switzerland, Germany, Italy, France,
UK) to understand the manufacturing process, the machineries, varieties of products, product
types, plantation of cocoa beans, etc.
In India, qualitative & quantitative consumer research studies were done by specialised
research organisations to understand the needs and demands of consumers and their buying
behaviour.
SCHMITTEN ASSOCIATION IN THIRD PARTY PRODUCTION
Soon after its setting up of the industry with adequate machineries and production unit,
schmitten could not cover its production costs, and to support that they adoted the strategy of
‘third party logistics’. Schmitten starts producing chocolates for another well known and an
upcoming brand ‘patanjali’. This step was in itself a set back or a plus point for schmitten can
be analysed below
Price points of schmitten chocolates-

Price points of Patanjali chocolates-
Patanjali milky bar- Rs 20
Patanjali fruity bar- rs 15
As we see above the difference between the price points of schmitten and Patanjali chocolates
differ tremendously. Patanjali is a brand that targets affordability towards its customers by
offering natural products at very affordable rates, it does not insist on quality or its promotion
too, but rather only focuses on its production at lower prices whereas on the other hand,
schmitten focuses not only towards pricing, but also the quality offered, the taste of the
chocolate and also promotional activities which affect the pricing of schmitten.
SCHMITTEN AND PATANJALI – AN ANALYSIS
An overview of the strategy being used by schmitten to produce Patanjali chocolates might
look like a distorting strategy that might affect the brand equity in the long-term. This report
tries to analyse whether the strategy is a consistent and would have a positive effect on the
brand.
Schmitten has its own production unit based in Surat. As it is a newly established brand in
such a high competitive market to establish its market share, it may require years. But to
avoid losses through the current production unit which has such excellent technologies and to
cover up production costs schmitten has started producing chocolates for another brand called
‘patanjali’.
Patanjali chocolates when compared to schmitten have a big difference in their pricing, which
might affect schmitten’s brand equity. To avoid such hindrances, the packaging of Patanjali
does not mention a tag ‘ schmitten’ on its packaging. And surprisingly schmitten is the only
producer for “Patanjali chocolates”. And no such other third party produces the same quality
chocolates which lies as an advantage to schmitten as it does not have to compete with
another producing unit that might not be able to equate the product towards such a quality.
RECOMMENDATIONS-
 The distributors of the Schmitten were not visiting retailer store regularly as other
brands distributors done so the large stock is out dated, so the company should create
software to keep watch on retailers stock.
 They should also make available small units of Schmitten as a free sample so that
awareness is also created as well as sale can be increased.
 The brand can target organic or rather follow the trend of vegan chocolates which has
grown popular these days among the youths and would attract a lot health conscious
consumers who wish to have such chocolates.

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CASE ANALYSIS ON SCHMITTEN – STRATEGIC MANAGEMENT

MODULE- STTRATEGIC MANAGEMENT

THE RAJHANS DESAI JAIN GROUP

GROUNDWORKS AND SURVEYS

SCHMITTEN ASSOCIATION IN THIRD PARTY PRODUCTION

Price points of schmitten chocolates-

SCHMITTEN AND PATANJALI – AN ANALYSIS

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