SWOT:

Strengths Ben & Jerry operate mainly in the mix in flavours Super premium ice-cream market. Flavour differentiation is an integral part of Ben & Jerrys product development strategy. Ben & Jerrys 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 Dreyers 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 competitors 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 organisations hierarchy and compensation policies. The company has received some negative publicity with regard to some of its social initiatives.

Opportunities 98% of the households eat ice-creams. Consumption is highest among households with young children and persons above 45 years old. Research showed that Ice-cream was not a seasonal product. The company needs to invest in marketing to increase the sales of some of its new products. The company has not nearly fully utilised the potential of the international market. Franchise stores contribute a very small percentage of the total sales. The company does not have belief whether franchises will be able to maintain the distinct brand identity of Ben & Jerry.

Threats Kraft ( Frusen Gladje) and Pillsbury ( HaagenDazs) are the other operators in the superpremium market. Growth in the super premium market slowed to 4% whereas the premium market grew by 11% in the year 1994. Haagen-Dazs is trying to enter the mix in flavours of the Super premium ice-cream market. Big Companies such as Unilever and Nestle have acquired competitors such as Breyers and Dreyers respectively.

Ben & Jerry on 5 Ps of Strategy: 1. Plan: Ben and Jerry does not have a definitive plan. This attitude comes from the way the company was established and has grown in the last two decades. 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. 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. Ploy: The case study does not mention any ploy used by the Ben & Jerry against any of its competitors. However, 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. 3. Pattern: There are some very distinct patterns in the Ben and Jerrys products. Most of the companys products are in the mix-in segment of the super-premium category, maintain a very distinct flavour, have a very high Butterfat content, the products are mostly developed on the gut feeling of the founders, the dairy raw materials for the products is sourced only from Vermont. Our Suggestion:

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. The company should try to strategise the process of product development to capture customers taste in a better way and should innovate ways that would reduce the butterfat content while keeping the richness of the flavour. 4. Position Ben & Jerry should maintain its variety based position. 5. 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. In the 1990s the company has mostly been able to realise its product and social objectives but has faltered on the economic objectives. A company needs to broaden its perspective to consider aspects that would help the company realise its economic objectives.

Problem statement: Increasing complexity of business and lack of leadership with requisite expertise to drive the company in future. Key Operational Issue
Ben & jerrys reliance upon Dreyers for production Difficulties involved in manufacturing ice-cream with large chunks Due to increased complexity of the business, 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 Dreyers Grand by Nestle and purchase of breyers 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. Other major players Unilever and nestle were also gearing up to attack B&J Threat of substitute- 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

Bargaining power of buyers- 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 - so high dependency

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