Ben and Jerrys Japan Group-2

Ben and Jerrys

Company Profile
Ice-cream company founded by Ben Cohen and Jerry Greenfield in

1978.

Philosophy: Anti-corporate Style, socially Responsible ,Caring

Capitalism.

Product Brand Image: Super-premium product category with funky

and caring image.

Distribution network across US with second highest Market Share by

1994 in super-premium Category.

Opportunistic, not strategic forays into Foreign market .

Ben and Jerrys

Company in 1997:
Recovered from a loss in 1994. Market Share and Profit on decline, threatening Survival and contribution towards social cause. Operating at half of Plant Capacity.

Ben and Jerrys Road Ahead

Declining profit and market share in a well-

distributed market(US): Indication of product in declining phase of Life Cycle.

Future growth: New Product or Market. Japan; the 2nd Largest Ice-cream Market in the

world.
BJIC already exploring options in Japan.

Porters 5 forces analysis of ice-cream market in Japan

Threat for Entry:

Highly complex distribution network. Distance for Shipping frozen food is immense . Threat of Substitutes: Atleast Six(06) Japanese manufacturers sell superpremium product.

Porters 5 forces analysis of ice-cream market in Japan

Bargaining Power of Buyers:
Affluent consumers; demand for high quality ice-cream with variety in flavour/style. Shift towards animal product is still underway.

Bargaining Power of Suppliers:

Likely to use US facility; so no new supplier for entry into Japan.

Porters 5 forces analysis of ice-cream market in Japan

Rivalry: Has to fight for shelf-space with similar products including that of leader of the product segment Haagen-Dazs: the US rival.

SWOT Analysis of BJIC in context of entry into Japan

STRENGTH: Product: High Quality & Variety Expertise in Super-Premium segment. No need for capacity addition. WEAKNESS: Lack of strategic marketing plan for entry in foreign markets Lack of commitment and managerial resources visible in earlier ventures in to foreign markets

SWOT Analysis of BJIC in context of entry into Japan

OPPORTUNITY: Strong market with excellent growth potential Comparative lower consumption of dairy products: potential for growth, rising income and affordability of refrigerator. No need for consumer education on the product. Falling Tariff.

SWOT Analysis of BJIC in context of entry into Japan

THREAT: Haggen Dazs as an established player in Japan. Local Competition. Time of economic slowdown (Thai currency depreciation):a threat, can turn into an opportunity as small affordable luxuries can do well in place of major luxuries beyond the reach of consumers.

Business case for Alliance

It is easier to build from scratch in unexplored markets than try to undo and fix past mistakes in

explored markets. It is imperative upon BJIC to give Haagen-Dazs serious competition in huge Japanese market which is providing highest margins. High managerial and financial commitment required for a complex market like Japan. Ice-Cream; mostly sold in convenience stores in Japan. A daunting task for new entrants to gain access to them without local help. Late entry into Japan.

Partner assessment and selection

Develop Criteria

Identify Potential Partners

Identify Short List Conduct Due Diligence

Develop Criteria for selection

Access for large distribution network in Japan

Financial risk
Political risk Control of marketing development Acquiring new capabilities Gaining scale

Immediate launch capability

Identify Potential Partners

1. Dreyers:
Ben and Jerrys largest distributer in US Not perceived as a direct competitor to Ben and Jerrys Failed due to JIT and retailer demands

2. Meiji Milk products & Mitsubishi:

Very strong distribution resources, including an exclusive supply contract for Tokyo Disneyland Have competing super premium brand called Aya. Option became long shot on account of earlier friction with Mitsubishi on deforestation

3. Arrangement with ad agency & open a scoop shop

development about to be built at Tokyo Disneyland

at highly visible new retail

4. Forego Japan market5. 7 eleven

as financial crisis may spread across asia,which makes economics of

exporting ice-cream infeasible

6. Ken Yamada, Dominos pizza

Identify Short List

Yamada:
Advantages: Knows frozen foods, have entrepreneurial spirit, and represents considerable strength with his success in launching and building up dominos
Dominos already offered ice cream cups as a part of its delivery

service in Japan

Relief from the effort to position the brand, devising and

orchestrating the initial launch & marketing and distribution Jerry's ice-cream cups to Dominos delivery menu

Helps in market study by adding select flavours of Ben and

Identify Short List

Yamada: Disadvantages:
Insists on having exclusive rights to the entire Japan market, with full control of all branding and marketing efforts there giving up control of potentially major market could not be taken lightly
No marketing plan is available for consideration-as Yamada does it only after reaching agreement

Identify Short List

Advantages with 7 Eleven:
Immediate placement in freezer compartments of over

7000 convenience stores in Japan

Consumer -store share of market had increased (40% of

super-premium ice-cream sales)

Reduces distribution costs that are typical of multilayered

distribution system in Japan

Can have control of market development it might want to

pursue

Identify Short List

Disadvantages with 7 Eleven:
Danger of becoming only one of many brands and store brand , cannot

build its own brand capital Balance of power would be overwhelmingly in the retailer favour Putting too many eggs in one basket - Kiss of death to enter the market through some kind of exclusive arrangement with big 7 Eleven Danger of falling out 7 Eleven JIT approach Careful meeting of orders and No order shifting 7 Eleven design of package art, which does not include Ben and Jerrys photo affects prospects of global branding Cannot help Ben and Jerry's to develop other distribution channels in Japan No commitment for promotional efforts and no budget for marketing campaign Risk that both US and Japan market is controlled by 7 Eleven

Our recommendation for Alliance 7 Eleven

Immediate launch Control over marketing development

Working with known partner

Tapping of consumer store marketing potential Proven capability

Value in alliance for partners

Value for 7 Eleven:
Something new to Japan and particularly unique with its chunks Failed to replicate super premium ice-cream Obvious market as 711 will not commit shelf space for any doubtful

product

Value for Ben and Jerrys:

Survivability by expanding scale of operation in foreign market It will retain independence in control of marketing Readily available huge distribution and sales network Utilisation of its excess capacity. Assured product launch to capture summer season. Increasing share of convenience stores in ice cream sales

Thank You