Ben & Jerry’s Strategy Plan

Vic Burrack
APU
BUSN620
 Ben and Jerry’s Strategy Plan Overview
• Ben and Jerry’s Strategy Plan Overview
• Ben and Jerry’s Details
• Ben and Jerry’s Perspective of Business
• The Vision and the Mission
• Ben and Jerry’s SWOT
• Ben and Jerry’s Old Strategies
• Ben and Jerry’s New Strategies
• Unilever Facts
• Unilever Growth Matrix
• Unilever SWOT
• Unilever Numbers
• Unilever Forecast
• Unilever Forecast (continued)
• Conclusions
• References
 Ben and Jerry’s Details
• Produces: premium ice cream, ice cream novelties, low fat ice cream, low fat yogurt and sorbet [1]
• Only ingredients of high quality
• Use of milk and cream with no synthetic hormones– rBGH [3]
• Ben & Jerry’s contributes set minimums for corporate philanthropy [1]
• Using the Ben & Jerry’s Foundation
• Donations to community groups and nonprofits
• Vermont and across USA
• The purpose of this philanthropy
• Support the founding values of the company
• Economic and social justice
• Environmental restoration and peace through understanding
• Support the community
• Ben and Jerry's bought by Unilever in 2000 [5]
• Ben & Jerry’s operates as autonomous member of the Unilever conglomerate
• No public financial numbers available anymore
• Continues to operate business as a three-part mission
• Emphasizing product quality, economic reward and a commitment to the community[2]
Ben and Jerry’s Perspective of Business

*This is the graphic from the Ben and Jerry’s website [1, 4]
 The Vision and the Mission
Vision
• Socially responsible company
• Supports separate charity work and the vendor communities [3]
Mission
• Utilizing the Ben and Jerry’s Mission Plan [1]
• Three interrelated parts
• Product Mission
• Economic Mission
• Social Mission
• Belief that all three parts must thrive equally [2,3]
 Ben and Jerry’s SWOT
Strengths
Established, prestigious, successful global ice cream manufacturer
Established sales in USA, Europe and Asia
Brand name synonymous with social responsibility and environmentalism
Each year donates large amounts of money to philanthropic causes
This brand complements Unilever's range of ice cream brands
Weaknesses
Company seen as having a social agenda not mainstream belief structure
The agenda of social responsibility could add unnecessary costs
Management reported as not effective in a number of respected journals
Reinvestment structure from back in 1994 still locking them into long-term debts
Automation costs from improvements cutting into profits
CFO convicted of embezzling over $300,000 during tenure (2006)
Humane Society complaints about suppler inhumane treatment of farm animals
Opportunities
Health conscious consumers want the fat-free and alternative ice cream and frozen yogurt products
Products are allergen free, gluten free and peanut free
Prototype HFC-free freezers in 2009 in USA - no venting of harmful chemicals
Tie in local and global social agenda with new product lines worldwide
Emerging markets around the globe want premium ice cream with brand recognition
Threats
Global economic downturn creates less disposable income spending per potential customer everywhere
Raw Material prices continue to rise (milk products, sugar, chocolate, nuts, etc.)
Consumer product choices for actions towards healthy living (dieting, high blood pressure control, diabetes, etc.)

[1,2,3,4,6,7]
 Ben and Jerry’s Strategies (old)
• Applying old Strategies [1,4,6,7]
• Continued Mission
• Joint economic success and environmental responsibility
• Markets and Directions [1] [4]

• Brand Loyalty
• Viral video promotions of contents (YouTube contests)
• Differentiation
• All-natural, high quality ingredients
• Unusual flavors and interesting names for product types
• Green Mission
• Use of recycled materials and dioxin-free (unbleached) paper in product packaging [3]

• Support for existing vendor sales

• Support of franchise shops (120 + in the USA)
Ben and Jerry’s Strategies (new)
 Unilever Facts
• Unilever is a global conglomerate and supplier of fast-moving
consumer products [8, 9, 10, 11]
• More than half of yearly sales in developing/emerging markets
• Asia, Africa, Central & Eastern Europe and Latin America
• Primarily food and household products industry supplier
• Nutrition, hygiene and personal care sales - 57% of revenue
• Existing portfolio includes 400 well-known brands [9]
• Ben and Jerry’s, Lipton, Slim Fast, Hellmann’s, Dove and Axe/Lynx
• Ice cream and beverages segment now includes
• Ben & Jerry’s, Breyers, Klondike and Popsicle
• Unilever’s support structure increased sales of Ben & Jerry’s [1, 4]
• 70 % sales increase within the first year following acquisition
Unilever Growth Matrix

[9]
 Unilever SWOT
Strengths
Operating worldwide (conglomerate)
Seen as having a big - diverse – strong - publicly known Brand portfolio of products
Preexisting relationship with various levels of distributors and retailers
Has scale economics for distribution
Identified problems with slowdown of growth and sales globally
Implemented “Path to Growth “strategy to counter problems - trimmed unsuccessful brands in 2000

Weaknesses
Misidentification of customer needs sometimes
Reported management inefficiency
General trend of continued decrease in revenues
Multi year reduction for spending on R & D
Reported incapacity to take advantage of acquisitions for maximum growth potential
“Path to Growth” strategy showing slow results
Streamlining still needed

Opportunities
Potential for rapid development and global marketing to match consumer trends
Match consumer needs for healthy products (dieting, high blood pressure control, diabetes, etc.)

Threats
Global economic downturn reduces consumer spending
Existing and continued strong competition (generic store brands, competitors)
Increasing product cots in multiple areas (raw material cost, manufacturing, shipping and exchange rates etc.)

[7,8,9,10,11]
 Unilever Numbers
Relevant Points [1, 4, 8, 9, 10, 11]
• Policy of mergers and acquisitions
• Continued company restructuring through “Path to Growth” strategy
Started years ago
• Business disposals, remove impairments and other means
• 2008 numbers show irregularity - part of actions from major restructuring strategy
• Total current liabilities have been reduced
• Prediction of continued steady future sales
• Pension costs and similar obligations stable not increasing

Sales Total Assets

2009 2008 2007 2009 2008 2007

39,823 B 57,117 B 40,187 B 37,016 36,142 37,302
Net profits Operating profit

2009 2008 2007 2009 2008 2007

3,659 5,285 4,136 5,020 7,167 5,245
Total assets less current liabilities Cash and cash equivalents at the end of the year

2009 2008 2007 2009 2008 2007

25,417 22,342 23,743 2,397 2,360 901
* All number in Euros
Unilever Forecast (3-5year)
Unilever Forecast (3-5year) continued
 Conclusions
Unilever:
• Sluggish global economy will continue to affect sales
• Continue to consolidate to remove problem areas (“Path to Growth”)
• Continue to develop adjusted strategies to improve growth numbers
• Improvement in next few years should be steady
• Expanding focus on “doing the right thing” (corporate, social / environmental )
• Will continue to support high profile brand name Ben and Jerry’s

Ben and Jerry’s:

• Continue to be independent subsidiary of Unilever
• Continue to be unique and proactive with their strategies
• Continue competitiveness without sacrificing belief structure
• Continue with the basic vision and mission - corporate, social and environmental
• Will maintain their respected position as a ice cream maker – market leader
• Promote franchising of scoop shops to expand market reach in US and internationally
• Create new venues for marketing /sales to boost sales
• Continue to protect itself from total integration by Unilever
• Have some discontinuity in perception of mission and goals between themselves and Unilever
• Expand Ben and Jerry’s brand globally by leveraging Unilever’s resources
 References
[1] Ben and Jerry’s Homemade. (2010). Business Evaluation. Retrieved from http://www.referenceforbusiness.com/businesses/A-F/Ben-Jerry-s-Homemade-Inc.html#ixzz0tal5qNau

[2] Dairy Reporter. (2002). Unilever launches ice cream chain in Spain. Retrieved from http://www.dairyreporter.com/Products/Unilever-launches-ice-cream-chain-in-Spain

[3] Environmental leader. (2010). Green Product Strategies. Retrieved from http://www.environmentalleader.com/2010/06/21/sustainable-product-strategies-for-going-green/

[4] Hoovers. (2010). Ben and Jerry’s Factsheet. Retrieved from http://www.hoovers.com/ben-&-jerry's/--ID__12763--/freeuk-co-factsheet.xhtml

[5] Rubin, C. (2010) . Ben & Jerry's Fair Trade Fanfare Belies Struggle With Corporate Parent. Retrieved from http://www.inc.com/news/articles/2010/02/ben-and-jerrys-goes-fully-fairtrade.html

[6] Kapoor, D. (2010). Ben and Jerry's fair-trade viral video campaign. Retrieved from http://insidepublicrelations.blogspot.com/2010/03/ben-and-jerrys-fairtrade-viral-video.html

[7] Unruh, G. (2010). Sustainable Product Strategies for Going Green. Retrieved from

[8] Unilever Annual Report. (2010). Full Annual Report. Retrieved from http://annualreport09.unilever.com

[9] Unilever Research. (2010). Discounted Cash Flow Analysis. Retrieved from http://www.wikiwealth.com/research:UL /

[10] Kao, A. & Haffenden, S. (2009). Unilever. Retrieved from http: //www.slideshare.net/KaoHaffenden/Unilever

[11] Unilever Annual Reports. (2010). Ten year Charts. Retrieved from http://www.unilever.com/investorrelations/annual_reports/charts_ten-year2/index.aspx

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