Strategic Management

Case Analysis: Ben & Jerrys Homemade Ice-cream Inc. A Period of Transition

Submitted by:
PGP/14/260 NITESH KUMAR GUPTA PGP/14/290 RAHUL MITTAL PGP/14/280 MAHTAAB KAJLA PGP/14/313 VINNY ARYA

Group V
PGP/14/287 PRACHI CHAWLA PGP/14/315 VISHAD DUBEY

Agenda
Background Key Strategic Issues Key Operational Issues Recommendations

Indian Institute of Management, Kozhikode

Background
The corporation of Ben and Jerrys first began in 1978 in Burlington Started homemade ice-cream shop with an investment of $12000 Gained reputation for the unconventional mix-in flavours Chocolate Chip Cookie Dough, Cherry Garcia, Rain Forest Crunch, and frozen yogurt are the major attractions Selling its products in all major markets in the US Established themselves as a top tier competitor in the ice cream industry From only a few thousand dollars, the business grew to a million dollar corporation During the 1990s, they experienced slow growth rates, in 1994, they lost $1.87 million on sales of $148.8 million

Indian Institute of Management, Kozhikode

Background
In 1994,Cost of sales increased approximately 9.6 million Majorly concentrated in super-premium segment 44 flavors brands Ben & jerrys strong competition by Haagen-Dazs in the super premium segment Other significant competitors are Dreyers Grand, Breyers in the premium segment

Indian Institute of Management, Kozhikode

Key Strategic Issues

Loss in sales in 1994 Majorly concentrated in super-premium segment Consumers were becoming health conscious, price sensitive and value conscious Increase in competition Comparatively Lesser advertising expenditures Increased distribution expenses due to outsourcing

Indian Institute of Management, Kozhikode

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Indian Institute of Management, Kozhikode

Key Operational Issues

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 flavours and overstock of other Strict ingredient requirements

Indian Institute of Management, Kozhikode

Recommendations
Adopt discounting policies Offer bundled products/smaller packages Increase sales volume in Smooth product line Adopt direct store delivery distribution method Incentive program for retailers to gain shelf space benefits

Indian Institute of Management, Kozhikode

Recommendations
Diversify in Premium segment Limit expansion of Scoop stores does not suit the target customer base Better Accounting Policies to be adopted Issues of writing down asset

Indian Institute of Management, Kozhikode

Questions & Answers

Indian Institute of Management, Kozhikode