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Strategic Management

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

Submitted by: Group V


PGP/14/260 NITESH KUMAR GUPTA PGP/14/280 MAHTAAB KAJLA PGP/14/287 PRACHI CHAWLA
PGP/14/290 RAHUL MITTAL PGP/14/313 VINNY ARYA 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