Beijing Carvel Case Study

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Carvel Beijing

Question 1:

Strengths| Weaknesses|
* quality/taste of product * experienced American manager, combined with Chinese manager who understood the market * unique offerings of ice cream cakes in different shapes/designs| * disconnected management, and problems with the joint venture with New Continent * lack of brand awareness in Beijing * very high operating expenses * perception of Carvel as a purely “American” brand| Opportunities| Threats|

* market the product as a premium brand to differentiate and enter an untapped market in Beijing * New offers to imports vending carts and freezers much cheaper could help get around the imports taxes| * competition from other established Ice Cream companies, both local and American, that are cheaper * other typical Chinese treats sold cheaply on the street * other American companies in the market (McDonalds, etc) * lack of acceptance due to different cultural norms * Expensive tariffs on foreign imports made it very difficult to operate in China|

Question 2:
Business Challenges

The challenge facing Carvel Beijing in terms of the price of the products was whether they should price, and therefore position, their ice cream and cakes at a high, premium price, to demonstrate to their customers the value and quality of the product. Or, if they should price their product to compete with other ice cream companies already in Beijing who sell their product at a lower price, and therefore potentially attract more customers who may not be able to afford a premium-priced product.

There were two main challenges concerning the product itself. First, Carvel Beijing had to decide whether they would use their traditional American mix for the ice cream, or if they should use a less sweet mixture, which is more in keeping with Chinese tastes. Second, Carvel Beijing had to decide if they should use the same American designs, shapes and flavours,...
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