Valentino Chocolate
3 CASE STUDY
Valentino Chocolates
3 CASE STUDY
Background
Valentino chocolates are made in Turin, Italy. They are recognised as luxury products with a delicious and unique taste. Some of Valentino’s finest chocolates are handmade and have won many international awards.
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Expansion
The company started by selling raw chocolate to other chocolate manufacturers. These manufacturers then used it to make their own products. Later, Valentino began selling packaged chocolates directly to the public and created the Valentino brand.
3 CASE STUDY
Expansion
The company expanded fast. It now has almost 300 employees, 75 company-owned shops, and a turnover of € 90 million. However, in the last two years, sales growth has slowed down and costs have risen. This has caused a fall in profits (see Chart 1).
3 CASE STUDY
Chart 1: Summary of the last three years’ results
Last Year Two years ago Three years ago
Turnover €90.5m Pre-tax profits €6.4m
€87.2m €8.2m
€62.6m €8.9m
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Reasons for falling profits
Prices There is widespread price cutting in the industry. Production Factory machines often break down. Demand Demand for its Classic Bar is falling. Valentino’s new products, biscuits and cakes, are not selling well. Staff morale Sales staff are becoming demotivated.
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Chart 2: Valentino’s main products (as a % of turnover)
Valentino Classic Bars Packaged chocolates Chocolate drinks
Raw chocolate Exclusive handmade chocolates Biscuits and Cakes
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The future
The company’s owners want Valentino to become an international business. They believe it makes the finest chocolates in the world. This year they have set aside €1.5 million to invest in their company. Their problem is to decide how to spend the money so that the company will continue to expand.
3 CASE STUDY
The future
Recently, a well-known business journal did a profile of the company. It ended
Valentino Chocolates
3 CASE STUDY
Background
Valentino chocolates are made in Turin, Italy. They are recognised as luxury products with a delicious and unique taste. Some of Valentino’s finest chocolates are handmade and have won many international awards.
3 CASE STUDY
Expansion
The company started by selling raw chocolate to other chocolate manufacturers. These manufacturers then used it to make their own products. Later, Valentino began selling packaged chocolates directly to the public and created the Valentino brand.
3 CASE STUDY
Expansion
The company expanded fast. It now has almost 300 employees, 75 company-owned shops, and a turnover of € 90 million. However, in the last two years, sales growth has slowed down and costs have risen. This has caused a fall in profits (see Chart 1).
3 CASE STUDY
Chart 1: Summary of the last three years’ results
Last Year Two years ago Three years ago
Turnover €90.5m Pre-tax profits €6.4m
€87.2m €8.2m
€62.6m €8.9m
3 CASE STUDY
Reasons for falling profits
Prices There is widespread price cutting in the industry. Production Factory machines often break down. Demand Demand for its Classic Bar is falling. Valentino’s new products, biscuits and cakes, are not selling well. Staff morale Sales staff are becoming demotivated.
3 CASE STUDY
Chart 2: Valentino’s main products (as a % of turnover)
Valentino Classic Bars Packaged chocolates Chocolate drinks
Raw chocolate Exclusive handmade chocolates Biscuits and Cakes
3 CASE STUDY
The future
The company’s owners want Valentino to become an international business. They believe it makes the finest chocolates in the world. This year they have set aside €1.5 million to invest in their company. Their problem is to decide how to spend the money so that the company will continue to expand.
3 CASE STUDY
The future
Recently, a well-known business journal did a profile of the company. It ended