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Team Green and Gold
Introduction Ice-Fili is currently competing in Russia’s ice cream industry. Although they have expanded to other products such as margarine and mayonnaise they will continue to focus on their core product line, which is ice cream. The reasoning behind this is that their ice cream production constitutes the majority of their profits and it is what Ice-Fili is most skilled at. The short-term and long-term corporate goals of Ice-Fili are relatively similar in that they both are concerned with dealing with their competitors. Ice-Fili’s short-term goals are: To remain competitive within the ice cream market and to maintain their status as market share leader. The long-term goals are: To gain market share over competitors such as Nestle and to differentiate their products. The long-term goals are tied together in that Ice-Fili can hope to gain market share by differentiating their products as better than their competitors’ products. Ice-Fili is the current market share leader in the ice cream industry but has been faltering in recent years and may be overtaken if nothing is done. Their position is in jeopardy because of competition from other ice cream producers. Nestle has recently emerged as their biggest threat and is currently second in market share in the ice cream industry. In addition, foreign companies such as Baskin & Robbins and Haagen-Dazs are gaining ground by distributing through franchised restaurants and café networks. Ice-Fili currently differentiates itself by offering the largest variety of ice cream products. It also differentiates by producing its ice cream using all-natural products. Ice-Fili plans to continue to differentiate itself through its large variety and all-natural products, but, if it chooses, can also differentiate itself by advertising its high quality and great taste and the fact that it is a Russian company.
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This can be accomplished simply by adding a slogan to every package of IceFili brand ice cream. Serving Russia Since 1937. 2 of 6 . Their all-natural products are produced at low cost allowing them to sell at lower prices than their top competitor Nestle. No other ice cream company in Russia has as rich a heritage and as pure a product as Ice-Fili. The new ice creams are loaded with additives and preservatives. The plan we have come up with involves enhancing current marketing techniques by focusing on what Ice-Fili does best.A Case Study Analysis: Ice-Fili Team Green and Gold Plan A Ice-Fili has a decided distinctive competency in their production process. The slogan accomplishes this nicely. We feel Russians will get behind an ice cream that is domestically produced.” The slogan addresses all of Ice-Fili’s unique qualities. Ice-Fili’s ice cream is made with all natural ingredients and is high in fat. Russian’s have been bombarded with all types of new ice creams in recent years. This makes the ice cream rich and gives it a great taste. Russians need to be reminded of the rich taste of Ice-Fili’s products. the slogan emphasizes the purity of Ice-Fili’s products. We feel this is a direct result of Ice Fili’s lack of marketing. which take away from the taste. We would recommend the packages say. possibly without changing any of the other value chain activities. This needs to be brought to the public’s attention. “Russia’s Only Great Tasting All Natural Ice Cream. We feel a small increase to two or three percent is all that would be needed to give their sales a boost. In the past Ice-Fili has spent only one percent of total sales on marketing. First it makes light of the long history Ice-Fili has had in Russia. It just needs a little help in the form of marketing. Next. their market share is on the decline. Still. They already have a great tasting all natural ice cream. With a well developed and implemented marketing plan Ice-Fili could gain significant ground on Nestle.
they have little activity in marketing and little more in sales. They could maybe even compete with Baskin-Robbins and Ben and Jerry’s in the franchised restaurant business. Franchising is relatively cheap for the franchisor and is a definite possibility for Ice-Fili in the future. The ice cream industry as a whole has total sales of half a billion dollars a year. Right now Ice-Fili has little control over their products in the market place. and a lack of an experienced management team to employ these capabilities. The reason why the dominant player commands such a small percentage of the market is because there are over 300 companies of varying sizes competing for their share. Plan B With increasing competition from domestic and foreign competitors more drastic plans may have to be put into play. Gaining a greater market share would allow Ice-Fili the opportunity to integrate forward and sell their products directly to customers. combining their distinctive competency of production with the distinctive competencies of another company may be the logical and mutually beneficial option. they do have excellent production capabilities. There are three alternate strategies to consider: consolidation. 3 of 6 . which translates to a total of 5% market share. or buy out. which is shrinking. but they lack proper research and development. the dominant player in the industry. To survive in such an environment a company needs more than one distinctive competency. has only $25 million of it. a distribution system that is inefficient.A Case Study Analysis: Ice-Fili Team Green and Gold Hopefully this new approach will help Ice-Fili gain a greater market share paving the way for new improvements to the value chain activities. In the case of Ice-Fili. joint venture. Ice-Fili. If the campaign works IceFili can use its renewed popularity to better its distribution channel. Therefore.
The joint venture is second on the list because it would still allow Ice-Fili to make some decisions autonomously. and managerial expertise while the foreign company can gain a low cost entrance to the Russian market and Ice-Fili’s catalog of flavors and products. some companies would hard pressed to close down their production facilities due to redundancies for the good of the industry. or Staples and Office Depot. 4 of 6 . the industry in Russia has already taken a small step in that direction with the creation of the 32 member Association of Russian Ice Cream Producers in 1998. there are over 300 companies in this industry and one can easily draw parallels to situations in the United States where many small businesses were eventually consolidated into large chains such as McDonald’s. One of their primary goals was to form a joint marketing campaign where their products would be marketed under one brand name and logo. two characteristics that companies do not like. For one. Namely their lack of an efficient distribution system and managerial expertise. this strategy has its negatives as well. In fact. with the lack of a dominant player with a large amount of capital. This would be a beneficial compromise because Ice-Fili could gain the marketing. Ice-Fili has several deficiencies that would make the joint venture difficult and expensive. However. with so many companies competing for the same markets. Wendy’s. Also.A Case Study Analysis: Ice-Fili Team Green and Gold Consolidation is the first strategy suggested because of the stage the ice cream market is currently in. The current political climate of Russia is unstable and uncertain. Also. research and development. However. As mentioned before. it would be difficult for one company to begin buying other companies and gain significant portions of market share in such a fragmented industry. two of the reasons why Ben & Jerry’s exited the Russian market in 1997 after five years. etc. attracting a foreign investor may be difficult.
we feel the company’s future would be most secure if it was in the hands of another company or investment group that could invest the capital and knowledge that this company needs and deserves in order to survive and thrive. return on equity. As mentioned earlier. our recommendation is for the buy out strategy. In fact. it can still be an attractive purchase for a foreign or domestic investment group as well as a company looking to expand its production capabilities and products either domestically or internationally. The company has too many weaknesses to improve upon and limited capital and managerial resources to with which to create and implement an alternative strategy such as Plan A. a lack of capital. perhaps the future of the company would be best left in the hands of another company that can truly invest the capital and expertise needed to make Ice-Fili a long term success. it is also a beneficial strategy to management because Ice-Fili can still command a good price and many of its workers could keep their jobs because much of the work done at Ice-Fili is production which is one of the top reasons to buy the company. Ice-Fili is becoming a less attractive purchase by the year. outlined in this paper. Recommended Strategy After analyzing the current market and environment in Russia. 5 of 6 . it would be better to be bought out now while the company still has a dominant position in the market as small as that position is.A Case Study Analysis: Ice-Fili Team Green and Gold The final and most drastic strategy is to be bought out. With so many deficiencies. With their return on assets. and a lack of a large market share. On the other hand. However. and net income all decreasing for six years straight. along with IceFili’s own situation.
Ice-Fili. Petinova. S.A Case Study Analysis: Ice-Fili Team Green and Gold Bibliography Paper: Rukstad..ru/. 2005.com/.whiteysicecream. Reference number 9-703-516.. 2005.ice-fili. 05022003. 28. Mattu. Retrieved April 6. Presentation: Background picture taken from Whitey’s Ice Cream: http://www. Background picture taken from Ice-Fili: http://www. Retrieved April 6. M. Harvard Business School Publishing. 6 of 6 . A.