BEN & JERRYS HOMEMADE ICE CREAM INC.: A PERIOD OF TRANSITION Harvard Case Solution & Analysis

a.      Identification

The strategic issues that Ben & Jerry’s are facing at present include the following:

  1. Changing demographics, consumer spending patterns and individual preferences for health concerns.
  2. Outsourced distribution model is used versus in-house distribution model of competitors. In addition, rising competition from national and international ice cream makers alike.
  3. The advertising efforts made by Ben & Jerry’s were way less as compared to the efforts made by the competitors.
  4. Hampered sales in the year 1994 were due to environmental (external) and organizational (internal) factors alike.

b.      Recommendation

The action plan recommended for Ben & Jerry’s is first to in-house their distribution network. This will help them to avoid direct threat form Dreyer’s and Sut’s of backward integration. Furthermore, the company needs to ponder over the traditional transformational processing of ice cream and peep into the technologically advanced ways of carrying operations. The installation of state of the art equipment to their facilities will help Ben & Jerry’s to maintain process efficiencies. Furthermore, Ben & Jerry’s can limit themselves to the flavours that are high in demand and move towards a more premium version of ice creams that suit the local clientele and the price sensitive one. This will help them to offer their products to a wider market rather than the elite target market. As the management at Ben & Jerry’s seem dissatisfied with the salary ratios compared to the industry averages; hence, a detailed analysis on the pay roll needs to be done so as to best fit employee on a particular pay roll. In addition, in the last as the advertisement expenditure by the company is almost zero so it should focus on high end advertising and marketing campaigns to promote the affordable luxury that Ben & Jerry’s offers. Marketing efforts are very important in such a busy world where the consumer every now and then confronts a new brand. With a limited attention span, Ben & Jerry’s needs to try to capture all of it to make the most out of their in store sales. Ben & Jerry’s already have a wide spread reputation in the market, which it can capitalize by offering products that come under the budget of its targeted region.

1.      ANALYSIS

a.      External Analysis

  • PEST ANALYSIS

1.      Political

Ben and Jerry’s operate in the United States of America where the Food and Drug Administration holds the food inspection responsibilities. The FDA sets the labelling requirements for the companies to increase consumer awareness on the product. The highly health conscious consumer now reads for the fat content in each pack and then make buying decisions accordingly. The government policies may impact the ice cream business either in favour or against them. The middle rate and the reduce rate apply to the cones cups or Eskimos and packaged ice-creams respectively. In addition to this, there are a number of public programs from which the Ben & Jerry Company is associated to fight against obesity.

  • 2.      Economical

Due to high demand for the fat free frozen products, the frozen yogurt is in high demand. In addition, preferences of customers are changing and people are increasingly lowering down their expenditure. As the super premium is subject to high fat content; hence, it has over run the market that is saturating. The inflation rate is high due to which the consumer spends cautiously, and the consumer price of ice cream and sorbet consumption has increased. Moreover, the raw material or the main ingredient from which the ice cream is made is sugar and milk, which are subject to price speculations.

  • 3.      Social

Consumers are becoming more and more health conscious; therefore, it is also required from companies to become more and more environmentally sustainable. The rising pressure from consumers and government alike for organizations makes them gear their focus on providing support for the social and environmental issues. In addition to this, the attention should be given to the utilization of renewable resources and in investing n sustainability developments. For example, Ben and Jerry’s is involved and foster a culture of corporate social responsibility.

  • 4.      Technological

The rising use of internet is developing more awareness amongst consumers and has paved a way for businesses to sell online. In addition to this, the web is becoming a source for marketing and adverting too that refers to E-Marketing. This has helped businesses thrive and grow remarkably. Moreover, the technological advancements are being made for the production of ice creams, which needs to be implemented.

  • PORTER FIVE FORCES ANALYSIS

1.      Bargaining Power of Buyer : HIGH

The bargaining power of buyer is high as there are a huge number of customers in the industry. Moreover, the cost to switch to another manufacturer is low, which further strengthens the power of the buyer. The product ...................

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