c
 



  

 

The high quality of the product is certainly a crucial factor for the success of the proposed
strategy. The stress on the genuine origin of the ingredients and the companyƍs name
"Homemade" creates and nourishes this impression in the eyes of the customer. The companyƍs
strong R&D department constantly develops new innovative flavours. Even though the barrier to
imitation is extremely low, this helps to create the cutting edge to stay ahead of the competition.

c 
 

The founders beliefs in social responsibility has not only earned them the brand loyalty of the
socially aware `baby-boomerƍ generation, it also has saved the company a lot of money by
providing free marketing through media coverage of social events.

     

The companyƍs devotion to employee satisfaction is one of the causes for the companyƍs low
employee turnover rate of 12%. The low turnover rate has impact on learning effects, training
costs, and employee commitment. Longer employed workers are more likely to understand the
production process and suggest improvements. The lower turnover rate also results in a better
reputation of the company in terms of working environment. This gives the company the
opportunity to choose from a wider range of applicants.

 

 

The low ratio of debts over total assets of 27% in 1994 gives B&J credibility, which is a good
foundation for further investments and expansion


  





The high cost structure at B&J is mainly due to labour intensive production, above average
wages and their supplier policy. How far the costs can be associated with labour or high
administration costs is not apparent from the data provided but worth investigating.

In addition, the company relies on one exclusive distributor. This not only makes it very
vulnerable in case of loss of this distributor, the company also loses control over its distribution
channels. As the main competitors put more pressure on prices, the importance of cost control
will rise.
   
   


Although efforts have been made to expand business activity into the United Kingdom, Israel,
and Russia, the company does not make use of its full international potential. The attempt to
market the range of B&J ice cream through restaurants is one step in that direction.



 
The non-fat (Sorbet) ice-cream market in the U.S. and the superpremium ice-cream market in
Europe are still in very early stages of the lifecycle. Haagen-Dazs has gained a first-move
advantage in Europe. However, the markets in Europe and Asia are still underdeveloped in terms
of presence of superpremium ice cream. As well as new markets, new distribution channels
could be opened. The increase in production capacity will give B&J the opportunity to get
production back into their own hands and increase productivity at their production facilities. If
B&J is sufficiently present at U.S. supermarket outlets is not clear from the given data. If not,
further growth is possible in that segment.
The new CEO Holland has experience in improving companiesƍ performance. This could prove
useful for the company in the future.


 
The overall weakening economy in the United States has already had an impact on the sales in
the superpremium ice-cream market. The main competitor has already expanded its operations
into Europe and Asia. If B&J does not react to this development, it faces the risk of being stuck
in the stagnating American market and no foothold in the growing European market.
Health awareness is rising in the population. This has the potential to slow down sales in the
high-fat segment of the ice-cream market.
Dreyer, the companyƍs exclusive distributor and an ice-cream manufacturer itself, is backed up

by the strong, internationally operating Nestle group. If Dreyerƍs should decide to enter the
superpremium ice-cream market, this poses a potential threat to B&J, especially since B&J is
depended on this one sole distributor.
 c 
 
y? Reduce the wages
y? Not increase the wages until they reach industry average
y? Reduce the work force volume and implement more labour efficient production means.
y? Shift work force to the new St. Albans production plant.
y? Reduce the financial and non-financial employee benefits.
y? Reduce working hours as long as production capacity exceeds market demand.

On the sales side of the production, more emphasis could be made on:

y? Non-fat Sorbet flavours

y? Increasing demand for superpremium high-fat flavours
y? Expansion or withdrawal from speciality flavours (Peace Pops)

 !!c"#

Part of B&Jƍs long-term strategy should be to become a market leader, using its competencies in
R&D, new production plant and strong brand image.

While trying to expand total market share, B&J should increase their marketing expenditure,
maintain product quality and innovate flavours. B&J has to continuously defend its current
business against rival attacks.

The following is a list of feasible strategic options, in line with the companyƍs social mission.

y? Reshaping internal structure

y? Restructuring of distribution; channels, distributors
y? Concentration on key markets
y? International expansion

c
     

The proposed strategies can be divided into short-term and long-term goals. Some strategies can
be implemented immediately; others take more time to succeed. The study group proposes to
divide the strategy implementation into four distinctive stages17.


 $c

B&J should keep its social mission, but needs to introduce a new sales & marketing specialist, to
centralize their marketing activities.

The main customers of B&J are reaching forty and are becoming more and more health
conscious. To target this group of people, the focus of the advertising strategy should be
promoting its low and non-fact products. B&J needs to redesign its advertising strategy such as
adjusting the design of its packaging to match its current consumersƍ tastes. Since the
competition in the super-premium ice-cream industry becomes more intense in terms of price.
B&J could offer coupons and discounts to attract more consumers.
B&J can expand the market through discovering and promoting new uses for the product; for
example, they could promote ice cream eating on any occasion and any season. The seasonal
demand for ice cream is caused by cultural characteristics. Through careful advertising,
consumer behaviour can be changed.
B&J should give up weaker territories, such as `Peace popsƍ, and reassigning resources to
stronger territories, `Frozen Yoghurtƍ, `Low fat/Fat freeƍ products. Through this strategy, B&J
would consolidate competitive strength in the market and concentrate mass at strategic positions.

%



B&J has a very strict selection procedure for its suppliers and because of its social mission, it
buys ingredients from small farms, which makes it cost inefficient. The company should buy
products from suppliers that offer better prices even though these suppliers may not necessarily
have the social values that B&J agrees with. Since this is against the mission B&J set, it is not a
feasible option for the company.






B&J should maintain their social mission and keep manual labour, but in the long term move
gradually towards less labour intensive production. It should keep the benefits but not increase
the wages until they reach industry average.

   &
'
 

Even though B&J has made some attempts to open up new distribution channels, those efforts
are not sufficient enough. Making the product available to the customer at new locations is
essential. Those locations could be:

y? Restaurants
y? Internet
y? Take-out/to-go ice-cream stands in street malls

The availability of the product in restaurants could be achieved by co-operation both with large
restaurant chains18 as well as licensing with smaller restaurants.
Due to the fragile nature of the product, Internet sales will never become a major part of overall
ice-cream sales. However, it supports the novelty image of the company. In addition, the
companyƍs website can become a marketing tool, offering a range of B&J related products19.
Even though, B&J is present at the market with B&J Café-like shops, this only targets mainly the
eat-in customers. The spontaneous "Scoop-on-the-go" customer is not appreciated enough. Small
franchised ice-cream stands located in busy High Street Malls could fill that niche.

(& &
&
'


Dreyerƍs Ice Cream, B&Jƍs exclusive distributor, which accounts for over 50% of the companyƍs
sales, causes the company to lose too much control over its distribution channels. We propose
restructuring the contract with Dreyerƍs to allow spreading the distribution among various
distributors. That way, the company does not depend so much on a single distributor and the
single distributor has less power, which puts B&J in a stronger position.

 
  
 

B&J target group focuses on 25-40 year old consumers in the upper-middle class sector without
children. This customer group has more spare money to spend it on luxury goods like B&J. The
single serving pint size is directed towards single households. Ben & Jerry should keep its target
market, but attract buyers who are unaware of the product or who are resisting because of certain
features. Along with this strategy, more emphasis should be put on commercial advertising. The
company will have to reshape its social activities to optimise the advertising impact.

( 
    

B&J has the financial resources to expand internationally. At the moment, international markets
in Europe and Asia are underdeveloped regarding superpremium ice cream, even though
Haagen-Dazs has already gained entry to the markets and substantial market share.

The customerƍs attitude towards the product in Europe differs from the United States. Product
and marketing strategy will have to be adapted to the specific market.

)



   & 
 

If the company should decide to follow the proposed strategic options, the following
developments are likely to occur in the future:

y? Increase in sales volume is vital to the company. It will enable it to profit from
economies of scale and higher profitability at the new production facilities, which are
currently not operating to capacity.
y? Product competitiveness: Constant product innovation will secure sales by adapting to the
changing consumer environment.
y? Product locations: By opening new channels of distribution overall consumption and
therefore sales volume will increase.
y? Cost structure: Driving down production costs will increase profitability, shareholder
value, and competitive position.
y? Employee satisfaction: The employee turnover rate will remain low due to good working
environment and other benefits enabling the company to ride down the learning curve
and profit from employee experience.



c
 
y? Prestigious, established, successful, global operation, with sales in USA, Europe and
Asia, which is synonymous with social responsibility and environmentalism. For
example, its products are packed in unbleached cardboard containers.
y? Ben & Jerry's also donates a minimum of $1.1 million of pretax profits to philanthropic
causes yearly. The company sponsors PartnerShops, which are Ben & Jerry outlets
independently owned and operated by nonprofit organizations such as Goodwill
Industries. The company is also involved in other good causes, including global warming,
gun control and saving family farms.

y? The company sells its colorfully named ice cream, ice-cream novelties, and frozen yogurt
under brand names such as Chunky Monkey, Phish Food, and Cherry Garcia. It also
franchises some 750 Ben & Jerry's Scoop Shops worldwide.
y? Ben and Jerry's were bought by consumer products manufacturer Unilever in 2000, but
were still able to retain their social responsibility platform and kept both co-founders
closely involved with product development. Their brands complement Unilever's existing
ice cream brands.
y? In 2009 Ben and Jerry's Chunky Monkey ice cream flavor was named in a top ten list of
the best ice cream in London.
y? In 2007 Ben and Jerry's co-founders, Ben Cohen and Jerry Greenfield were asked to join
Lance Armstrong in speaking about clean technology and alternative energy at the Ernst
and Young national entrepreneur of the year awards.
y? In 2008, their market share was second only Haagen-Dazs who had a 44% market share
while Ben and Jerry's had 36%. This was achieved in spite of a premium price point. The
premium price of the product was supported by a high quality image, and high quality
products.


y? In 2006, former CFO Stuart Wiles was convicted of embezzling some $300,000 from the
company during his tenure at Ben & Jerry's, which ran from 2000 to 2004.
y? In 2006 they had to stop using Michael Foods as their egg supplier, due to bad PR from
the Humane Society, which alleged that Michel Foods treated chickens inhumanely.
y? They achieved success despite several corporate weaknesses. The most obvious was a
lack of professionalism in its management, and no clear mission statement (which they
have amended). They reinvested huge amounts of property and equipment in 1994
increasing their long-term debts by almost 45% in 1993. They increased marketing and
selling expenses and administrative infrastructure, which increased 28% to $36.3 million
in 1994 from $28.3 million in 1993 and increased as a percentage of net sales to 24.4% in
1994 from 20.2% in 1993. They took out a vast amount of capital lease in their aim to
automate their production to keep up with the intense competition.
y? Their clear focus on multiple social responsibility issues could hurt the company by
shifting the focus away from important business matters, and also add unnecessary costs.
 y? They need more experienced management to fuel aggressive growth in a downturned
economy and change flat sales in their premium product lines.



 
y? In today's health conscious societies the introduction of more fat-free and healthy
alternative ice cream and frozen yogurt products.
y? Provide allergen free food items, such as gluten free and peanut free.
y? In 2009 Ben & Jerry's announced plans to roll out the country's first HFC-free freezers;
freezers that would be sold to grocery stores and would not emit harmful chemicals into
the atmosphere.
y? In 2008 they acquired Best foods and Slim-fast which will allow them to enter a new
industry of weight loss products. In turn they can now expand into new geographic
markets-more countries, like Europe, where the weight loss/management trend is taking
hold.
y? They could expand their existing product lines to compete with the 'private-in house
brands' offered by supermarkets, and in developing countries.
y? Selling Ben and Jerry's premium ice cream in South America (which is an emerging
market that has yet to be capitalized upon). There is a growing demand for premium ice
cream in new markets like Asia.


 
y? Much of their target market is constantly changing its product preferences (desiring to
prevent diabetes, obesity etc.). That, coupled with a decrease in household sizes and
discretionary income, has left sales flat in recent years.
y? Consumers are concerned about fattening dessert products. Especially Ben and Jerry's
target market, which are accustomed to reading nutrition labels.
y? Any contamination of the food supply, especially e-coli.
y? Major competitors, like Nestle (Pillsbury), Kraft Foods, Dunkin Donuts, and Dean Foods.
They also have competition from global food companies with similar products and any
grocery store label products. Much of their competition seems to be merging together, in
order to remain marketable in this tough economy.
y? Experts say that animal feed prices are rising, partly because biofuel crops are replacing
cow fodder. In turn, the high priced animal feed pushes up the cost of milk. Prices of all
milk products are rising worldwide, due to what some call a "perfect storm" of low
supply and high demand. There is a distinct possibility that their may not be enough milk
to meet demand, and that there could be a global milk shortage.
y? Agricultural economists say today's milk shortage is basically a case of low supply and
high demand worldwide. Supply is down for many reasons. A bad drought in Australia
dried up the grass that the country's cows eat. New export taxes were added on
Argentina's milk in an attempt to keep the country's food prices under control. Also,
European farmers can't significantly increase production until a quota system is phased
out eight years from now. The U.S. and Europe always used to have spare dairy products
 to sell cheaply around the globe, but that's no longer the case, says market expert Erhard
Richarts.
y? Skim Milk powder (which is easier to transport than fresh milk) is used in a wide range
of foodstuffs, and in 2007 its price shot up to record levels worldwide - almost twice as
high as the year before. Then retail prices went up, a butter shortage, cheese prices went
up, and then wholesale prices went up, and there doesn't seem to be an end to it.

Back in '66, in a school gym class, Ben Cohen and Jerry Greenfield found they hated running but
loved food. Years later in '78, Ben had been fired from a series of jobs while Jerry had failed for
the second time to get into medical school. Read more...

c"& 

  
&*

y? Amazon SWOT
y? Starbucks SWOT
y? Apple SWOT
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y? Bharti Airtel SWOT
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y? Toyota SWOT
y? Ben & Jerry's SWOT
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y? Smith and Wesson SWOT

  & 
  
&*

y? SWOT Analysis
y? eMarketing/Internet Marketing
y? Consumer Behaviour
y? Marketing Envoronment
y? Marketing & Finance
y? Marketing Planning
y? Marketing Strategy
y? Customer Relationshop Management (CRM)
y? Marketing Tactics
y? Marketing Communications
y? Case Studies
y? International Marketing
y? Services Marketing
y? Creative Marketing