5- 2 Colombo Soft-Serve Frozen Yogurt
5- 2 Colombo Soft-Serve Frozen Yogurt
1. Briefly summarize Colombo’s competitive environment and General Mills’ strategy in response to that environment.
• Competitive environment: o franchise operations such as TCBY and Freshens streamlined frozen yogurt business causing it to be:
more efficient to operate
easier marketing
cost effective o Foodservice operators (Impulse locations) began offering soft-serve yogurt o Caused independent yogurt shops (Colombo Soft-Serve primary clientele in the 80’s) to add more distinct new products
• General Mills’ strategy o Merge existing salesforce into GMI Foodservice Division o Reassign customers to employees familiar with their geographical area’s o Give merchandising to all clients for free; Shops were very interested in the kits while many Impulse locations didn’t even hang them up. o Offer price promotions to all clients
Results Review PROFIT AND LOSS BY SEGMENT – PRE-ABC PROFIT AND LOSS BY SEGMENT – Post-ABC Impulse Segment Yogurt Shops Total Impulse Segment Yogurt Shops Total
Sales in cases 1,200,000 300,000 1,500,000 Sales in cases 1,200,000 300,000 1,500,000 Sales revenue 23,880,000 5,970,000 29,850,000 Sales revenue 23,880,000 5,970,000 29,850,000
Less: Price Promotions (3,600,000) (900,000) (4,500,000) Less: Price Promotions (3,600,000) (900,000) (4,500,000)
Net Sales 20,280,000 5,070,000 25,350,000 Net Sales 20,280,000 5,070,000 25,350,000
Less: Cost of Goods Sold (13,800,000) (3,450,000) (17,250,000) Less: Cost of Goods Sold (14,025,000) (3,225,000) (17,250,000)
Gross Margin 6,480,000 1,620,000 8,100,000 Gross Margin 6,255,000 1,845,000 8,100,000
Less: Merchandising (1,380,000) (345,000) (1,725,000) Less: Merchandising (1,680,000) (45,000) (1,725,000)
Less: SG&A (948,000) (237,000) (1,185,000) Less: SG&A (3,861,000) (39,000) (3,900,000)
Net
1. Briefly summarize Colombo’s competitive environment and General Mills’ strategy in response to that environment.
• Competitive environment: o franchise operations such as TCBY and Freshens streamlined frozen yogurt business causing it to be:
more efficient to operate
easier marketing
cost effective o Foodservice operators (Impulse locations) began offering soft-serve yogurt o Caused independent yogurt shops (Colombo Soft-Serve primary clientele in the 80’s) to add more distinct new products
• General Mills’ strategy o Merge existing salesforce into GMI Foodservice Division o Reassign customers to employees familiar with their geographical area’s o Give merchandising to all clients for free; Shops were very interested in the kits while many Impulse locations didn’t even hang them up. o Offer price promotions to all clients
Results Review PROFIT AND LOSS BY SEGMENT – PRE-ABC PROFIT AND LOSS BY SEGMENT – Post-ABC Impulse Segment Yogurt Shops Total Impulse Segment Yogurt Shops Total
Sales in cases 1,200,000 300,000 1,500,000 Sales in cases 1,200,000 300,000 1,500,000 Sales revenue 23,880,000 5,970,000 29,850,000 Sales revenue 23,880,000 5,970,000 29,850,000
Less: Price Promotions (3,600,000) (900,000) (4,500,000) Less: Price Promotions (3,600,000) (900,000) (4,500,000)
Net Sales 20,280,000 5,070,000 25,350,000 Net Sales 20,280,000 5,070,000 25,350,000
Less: Cost of Goods Sold (13,800,000) (3,450,000) (17,250,000) Less: Cost of Goods Sold (14,025,000) (3,225,000) (17,250,000)
Gross Margin 6,480,000 1,620,000 8,100,000 Gross Margin 6,255,000 1,845,000 8,100,000
Less: Merchandising (1,380,000) (345,000) (1,725,000) Less: Merchandising (1,680,000) (45,000) (1,725,000)
Less: SG&A (948,000) (237,000) (1,185,000) Less: SG&A (3,861,000) (39,000) (3,900,000)
Net