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Ben and Jerry’s Homemade Ice Cream Inc.

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STRATEGY MANAGEMENT
BEN AND JERRY’S HOMEMADE ICE CREAM INC.

OVERVIEW: Ben and Jerry’s incorporated in 1977 and was an immediate success. Their USP were their 44 unique and innovative flavours and Cherry Garcia, Chunky Monkey, Chocolate Chip Cookie Dough etc were symbols to the corporation. Soon, they were growing at 60% annually while entering new geographic markets. By 1990, they were well established in major markets in US. They has a strong presence in supermarket chain and mom and pop stores which accounted for majority of ice cream sold in the country.

Problems:

  1. Dipping profits and sales in the super premium range
  2. Outsourced production to Dreyer’s makes them sensitive to Dreyer’s growth strategy
  3. Difficulty in forecast demand and maintaining production efficiencies
  4. Social initiatives under growing scrutiny

SWOT:
Strengths- Number 2 maker of superpremium ice cream in US after Haagen-Dazs. Down-home Vermont image of Ben & Jerry’s packaging and logo were a popular brand. Their policy to put quality first was appreciated by the consumers and therefore did not hesitate to even pay extra. The CSR activities of Ben and Jerry were highly respected. Also, the HR practices were reputed to be exceptionally progressive.

Weakness- Lack of strong management skills is proving to be a huge prohibitive factor to growth.  The company was resistant towards advanced technology and automated systems and in fact it even suffered from $6.8 million loss because of a write down.

Opportunities- Global markets have huge scope and the new retail stores have been opened in Russia, Isreal and Canada.

Recommendations:

  1. Locating plant closer to the dairies in Vermont to reduce the shipping costs
  2. Establishing a proactive marketing department: The Ice Cream Industry is witnessed a 31% increase in advertising expenditure from $25 in 1993 to $31 in 1994 while Ben and Jerry’s do not even have an organized and well structured marketing team. They rely on unpaid media attention. However, moving ahead with time, the company must invest more time and money in marketing and advertising efforts. This will reap the following results-
  1. Market research- Presently the flavours are based on the intuition of Ben and Jerry which is not a scientific approach to handle business. The marketing department can gather information from Scoop Shops and come up with a system to rate and rank, gather feedback on whether continue or discontinue flavours and the manufacturing department can gain from such insights. This will solve the problem of forecasting demand and the over and understocking problems.
  2. Managing the Corporate Image of Ben and Jerry. Considering that the social initiatives are under constant scrutiny, the marketing team can help to focus the attention the social intentions.
  1. Competing Globally: Considering that the US market is getting saturated as new producers are coming up and Ben and Jerry’s niche lies in the super premium segment, competing globally is a good opportunity. With the ploughed back profits from its present operations, being a top tier player in the global market can force the current competitors to change or merge.
  2. Increasing the number of distributors to reduce their bargaining power.

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