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SWOT

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Strengths  Ben & Jerry operate mainly in the mix in flavours Super premium ice-cream market.  Flavour differentiation is an integral part of Ben & Jerry’s product development strategy.  Ben & Jerry’s frozen yogurt has received good response from the market.  The company has a very positive social image and has the highest level of charitable contribution in terms of percentage of pre profit figures. Weakness  Direct store delivery is the preferred method of distribution.  Ben & Jerry do not use any market research for product development. It is just based on the gut feeling of its founders.  The introduction of new products in the last two years has increased the complexity of operations at Ben & Jerry.  Ben & Jerry has its manufacturing facility only in Vermont.  The company is dependent on Dreyer’s to manufacture 40% of its products to serve the southern region.  The new plant at St. Albans experienced significant delays. The company bared losses and had to abandon the automated handling processed and refrigeration equipment.  The products have very strict ingredients requirements and have nearly 1.5 to 2.5 more flavouring than a competitor’s product.  The two founders have nearly 40% of the share holders voting rights.  The company has never paid dividend to its shareholders and has a very low debt-equity ratio.  The company lacks talented man power to manage a big company.  There are serious issues in the organisation’s hierarchy and compensation policies.  The company has received some negative publicity with regard to some of its social initiatives.

However.  Big Companies such as Unilever and Nestle have acquired competitors such as Breyer’s and Dreyer’s respectively. The company does not have belief whether franchises will be able to maintain the distinct brand identity of Ben & Jerry. have a very high Butterfat content. the products are mostly developed on the gut feeling of the founders. Plan: Ben and Jerry does not have a definitive plan. the dairy raw materials for the products is sourced only from Vermont. Threats  Kraft ( Frusen Gladje) and Pillsbury ( HaagenDazs) are the other operators in the superpremium market.Opportunities  98% of the households eat ice-creams.  Research showed that Ice-cream was not a seasonal product. Our Suggestion: The company should make the trade off between maintaining its distinctive high value position and catering to all the segments of the market. Ben & Jerry on 5 P’s of Strategy: 1. Ploy: The case study does not mention any ploy used by the Ben & Jerry against any of its competitors. there is a mention of Haagen-Dazs using its entry in the mix-in segment of the super-premium ice cream market as a ploy to affect the market share of Ben & Jerry in this particular category. Pattern: There are some very distinct patterns in the Ben and Jerry’s products. It needs to chalk out a definitive plan in terms of        The markets that it wants to cater to The depth and breadth of its product offerings The Organisation Hierarchy and employees salaries The relationship with its distributors and retailers The sourcing of raw material The manufacturing process Plan to maintain and grow market share 2.  The company needs to invest in marketing to increase the sales of some of its new products.  Consumption is highest among households with young children and persons above 45 years old.  The company has not nearly fully utilised the potential of the international market. Our Suggestion: . This attitude comes from the way the company was established and has grown in the last two decades. maintain a very distinct flavour.  Franchise stores contribute a very small percentage of the total sales. 3.  Growth in the super premium market slowed to 4% whereas the premium market grew by 11% in the year 1994. Most of the company’s products are in the mix-in segment of the super-premium category.  Haagen-Dazs is trying to enter the mix in flavours of the Super premium ice-cream market.

A company needs to broaden its perspective to consider aspects that would help the company realise its economic objectives. In the 1990’s the company has mostly been able to realise its product and social objectives but has faltered on the economic objectives. The company should try to strategise the process of product development to capture customer’s taste in a better way and should innovate ways that would reduce the butterfat content while keeping the richness of the flavour. 4. it had difficulty forecasting demand and maintaining production efficiencies Shortages of some flavors and overstock of other Strict ingredient requirements Porters 5 forces Analysis Risk of Entry by potential competitors –High With purchase of Dreyer’s Grand by Nestle and purchase of breyer’s by Unilever. there were strong chances that these two Large multinational would also target super premium segment Intensity of rivalry among establish firms – Intense Haagen-Dazs used ploy against B& J to increase market share. Position Ben & Jerry should maintain its variety based position. Key Operational Issue      Ben & jerry’s reliance upon Dreyer’s for production Difficulties involved in manufacturing ice-cream with large chunks Due to increased complexity of the business.High High chances of its super-premium ice-cream getting substituted by low fat or fat free frozen desert with the trend towards healthier eating .Ben and Jerry should maintain the pattern of keeping a distinct flavour and sourcing its products from Vermont to maintain its unique position in the market. Other major players – Unilever and nestle were also gearing up to attack B&J Threat of substitute. Problem statement: Increasing complexity of business and lack of leadership with requisite expertise to drive the company in future. Persecptive: Ben & Jerry is dedicated to the concept of linked prosperity and its vision is to serve the three purposes of Product. Economic and Social. 5.

therefore they need to remove some products that are not moving. Product development . 3. 6. B&J should aim for Cost advantage through operational efficiencies. This tradeoffs has to be made to concentrate more on food service outlets. The new plant did not become operational leading to a loss in the 4th quarter of 1994. as process efficiency is important to prevent losses.so high dependency Strategies 1.High Market was highly competitive with market penetration by leading brands in all significant markets in US Bargaining Power of suppliers – High 40% of B&J inc-cream was produced by Dreyers . 4.Bargaining power of buyers.Large number of products are stretching the capability of the company. The company should resolve their costly equipment problems first. It is scaling up fast and so Holland has to define a organisational Structure. B &J has strict ingredient requirements which makes the manufacturing process challenging. 5. Salary Structure has to be redefined according to Market conditions . They use Vermont Dairy that reduces the profit margin. The company should innovative approaches to reduce its raw materials costs. Scoop Stores should be phased out. 2. A definite Organisation Structure is required as it is no more a nascent organisation. Reducing the complexity will help to forecast demand and maintain production efficiency. 7.