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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

Group V

Strategic Management

Case Analysis:

Ben & Jerry’s Homemade Ice-cream Inc. A Period of Transition

Agenda

Background

Key Strategic Issues

Key Operational Issues

Recommendations

Indian Institute of Management, Kozhikode

The corporation of Ben and Jerry’s 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 1990’s, they experienced slow growth rates, in 1994, they

lost $1.87 million on sales of $148.8 million

Background

Indian Institute of Management, Kozhikode

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 & jerry’s strong competition by Haagen-Dazs in the super premium segment

Other significant competitors are Dreyer’s Grand, Breyer’s 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

Ben & jerry’s reliance upon Dreyer’s 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

Key Operational Issues

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

Questions & Answers

Indian Institute of Management, Kozhikode