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cream Inc.
- A period of transition
Key Issues
1. Over Reliance on Dreyers for manufacturing and distribution which is a potential
threat now that Nestle owns 22% of Dreyers.
2. Their operating profit has fallen from 11848k to 2789K in 1994.
3. Over-reliance on super premium category
4. Change in consumer preferences (like health and value conscious) has led to shift in
market from super premium category to premium and regular category.
5. Increased competition in super premium segment from more established players like
Haagen Dazs, Dreyers etc.
6. Difficulty in forecasting demand and maintaining production efficiency as a result
leading to shortage and overstock of some flavours.
7. Substitutes such as water-ice, sherbets and frozen yogurts taking over the marketshare.
Strategies
1. Mergers and Acquisitions: M&A activity can be done by Ben and Jerrys in US as well as
in Asia especially in China and India where there is very low Ice-cream penetration and a
huge market opportunity exists there.
2. Forward integration: Instead of relying on Dreyers and Suts (who are also its
competitors) for distribution it can directly collaborate with retail stores and wholesalers like
Walmart, Tesco which would reduce risk and costs.
3. Expansion into South East Asia- We recommend acquiring / collaborating end to end
dairy companies like China Modern Dairy Holdings Ltd , Panda dairy in China and Amul in
India which would give it a substantial footprint and also supply low cost raw products for
international production.
4. Social goals- Continue and Expand the Social Initiatives it is involved in. Also start new
social initiatives in SE Asia as it would lead to a lot of publicity and good word of mouth.
5. Collaboration with big ticket Ice-cream consuming Institutions: Indian railways
(IRCTC) and Air India are constant buyers of quality ice creams, yogurts etc. which Ben and
Jerrys can supply to gain a foothold in the country.
6. Introduction of low fat health conscious products Diversification into more milk
related products like paneer (cottage cheese), Tofu, Milk Shakes to strengthen its market
position to cater to increasingly health conscious consumers.
7. Change of structure Hire a operations guy- A COO can be introduced for overseeing
day to day operations to assist the CEO Mr Holland, so that he can concentrate on Global
Expansion.
8. National level competition for newer tastes This would help in generating a lot of
positive publicity and can generate a lot of ideas and lead to creation of new exotic flavours.
9. Mission and vision statement- Mission can be modified to suit market and consumer
needs at an international level.
10. Franchise Offering new Franchisee licenses at an affordable cost and training them to
maintain high quality and brand image.