OCHO, Otago Chocolate Factory
OCHO founder Liz Rowe founded the company in 2013. Fast forward moving the company has been committed to making good chocolate. The company is firmly rooted in Dunedin and this is where the company intends to stay. In 1979 Cadbury Schweppes Hudson was the first chocolate company to launch factory tours. Four decades later another chocolate company opens its door to the public. OCHO Chocolate Company moved to a larger building on Dunedin’s waterfront after raising about $2m through crowdfunding in 2018 afterwards it launched its factory tours. The main aim of launching these tours is to demystify the chocolate making. When the company started offering factory tours it immediately ceased to be a normal food and beverage company only, it’s now part of the tourism sector.
The factory tours offered by the company can be defined as an enterprise level initiative, the company is based in New Zealand, the tourism sector of the country is faced by a range of challenges this means that the factory tours being offered by OCHO are likely being faced by the same problems. PESTEL analysis helps in explaining the external factors that are likely to affect the factory tours being offered by the company. New Zealand is geographically located away from the international mass market (Orchiston & Espiner, 2017). This clearly indicates that the company tours are not likely to be attended by international tourists. Also, statistics recorded in 2015 show that the country received about 3.1 million tourists from around the globe. However, the majority of these tourists came to interact with nature and view beautiful sceneries. No indicated number of these tourists were motivated by company tours offered by various companies in the country (Orchiston & Espiner, 2017). This is another indication that the factory tour is not likely to be receiving many international tourists. The fact that the country is located away from international mass market and that many tourists visit the country to view beautiful sceneries pose a threat to the company tours. The fact that the country receives a lot of tourist can be an opportunity to the business.
Economic factors likely to challenge the growth of the factory tours being offered by the company are minimal since tourism is a key contributor to the nation’s economy and employment (Tsui, et al., 2018). Factory tours earn the government revenue through the tax imposed on these tours and on tourists visiting the destination. The tourism sector of New Zealand is growing at a faster rate and this increases the chances of the factory tours generating much revenue for the company thus forming another advantage and opportunity for the company. Tax levied on tours in New Zealand also pose a great threat to the business.
Social-cultural factors comprise of the belief and the shared attitudes of the people surrounding the business (Rae, 2019). Dunedin has been a chocolate city since 1869 when Richard Hudson introduced the first biscuit house. Most of the city population are employed in the chocolate factory. The Fact that the surrounding community positively influences the operations of the company forms another opportunity for the business. After the company refurbished Cadbury former premises the former employees of Cadbury were the first to be taken on a tour of the new premises. The surrounding community might also hold the belief that the company will follow in the footsteps of the former giant Cadbury enterprise, this is a threat to the operation of the factory tour business since the business is a still a small-medium enterprise.
The chocolate factory is strategically located in New Zealand’s first Gigatown, Dunedin has advanced technology that is non-comparable on a local and global scale. Ultra-Fast Broadband is at its fastest in the city this increases the speed of innovation and better services for enterprises operating in the city (O’Brien, n.d). Technological factors surrounding the factory tour business positively influence the business and generates innovation opportunities for the business. Dunedin has been positioned to emphasize on opportunities to grow sectors of the economy. The town is taking into account the need to create an environment that fosters investment and growth in the local tourism (Yeoman, et al., 2015). Environmental factors in Dunedin gives the factory tour enterprise an opportunity to thrive. The tourism sector has its own laws and regulations and failure to follow these laws results in ominous consequences. The factory tour must follow the rules reinforced by the local and state government concerning tourism. Strict legal law associated with tourism in the area are a threat to the factory tours.
OCHO is not the only company offering factory tours, the company has various direct and indirect competitors. Three of the company’s direct competitors include, Speight's Brewery Small-Group Guided Tour from Dunedin, Wellington Chocolate factory Tour and Pic’s Peanut Butter factory tour. These three companies are offering company tours same as the OCHO factory tours. wellington is located in the capital of New Zealand and this gives the company a strategic advantage, the city is the second most populous city in New Zealand while Dunedin is the seventh populated city in New Zealand (Wellington Chocolate, n.d). Wellington factory tours have a greater advantage in attracting more tourists than the OCHO factory tours. Speight's Brewery Small-Group Guided Tour from Dunedin is competing with OCHO factory tour for tourists since both are in the same city the only difference is that one company is giving a brewery tour while the other company is giving a chocolate factory tour (Speight's, n.d). The Pic’s Peanut Butter factory is located in Nelson, New Zealand which is the ninth populated city, factory tours offered by this company does not attract chocolate customers but peanut customers, therefore it does not pose much threats to the OCHO factory tours (Pic, n.d).
OCHO factory tour indirect competitors are based in in Dunedin, these are; Larnach Castle & Garden Tours, and Taieri Gorge railway Tour. These two do not competed with OCHO factory tours on the basis of the same product but they take away the potential customers (Bhasin, 2018). It is hard for the company to tackle indirect competition since the power belongs with the consumer in this case. For OCHO factory tour to beat competition from these indirect competitors the company can only position its tours such that they appeal to the audience in a way that it surpasses the indirect competition.
Inconclusion, OCHO moved into Cadbury former premises and launched its company tours afterwards. Following a PESTEL analysis, many external factors positively and negatively affects the business. The company tour offered by the company face direct and indirect competition from other tour offering companies.
References
Bhasin H., (2018). What is Indirect Competition? Retrieved from; https://www.marketing91.com/indirect-competition/
O’Brien, C., (n.d). Technology. Retrieved from; https://www.dunedinnz.com/business/business- support/help-for-business-growth/technology
Ocho (n.d). Otago Chocolate Company, retrieved from; https://ocho.co.nz/
Orchiston C., & Espiner S., (2017). Fast and Slow Resilience in the New Zealand tourism industry.
Pic (n.d). Pic’s Peanut Butter factory tour, retrieved from; https://www.picspeanutbutter.com/tours-and-events/tours/
Rae S., (2019). Dunedin chocolate factory wants to 'demystify' craft chocolate. Retrieved from; https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12206704
Speight's, (n.d). Speight's Brewery Small-Group Guided Tour from Dunedin. Retrieved from; https://speights.co.nz/brewery-tour?
Tsui, W. H. K., Balli, F., Tan, D. T. W., Lau, O., & Hasan, M. (2018). New Zealand business tourism: Exploring the impact of economic policy uncertainties. Tourism Economics, 24(4), 386-417.
Wellington Chocolate (n.d). Wellington Chocolate factory Tour, retrieved from: https://www.wcf.co.nz/tours
Yeoman, I., Andrade, A., Leguma, E., Wolf, N., Ezra, P., Tan, R., & McMahon‐Beattie, U. (2015). 2050: New Zealand's sustainable future. Journal of Tourism Futures, 1(2), 117- 130.
