The ice-cream giant we know today as Ben & Jerry’s started off as a $12,000 investment made by Ben Cohen and Jerry Greenfield to open their first ice-cream shop in a renovated gas station in Burlington, Vermont. After opening their first franchise in Shelburne, Vermont in 1981, their gross revenue grew from $4 million to $58 million in five short years. Cohen and Greenfield’s “commitment to social causes and their open, relaxed demeanor” played a key role in the company’s “non-traditional” personality and “unique marketing drive.” The B&J’s Foundation was established to fund community-oriented projects as a commitment to their social causes. Initially funded by the founders, they pledged 7.5% of the company’s annual pretax profits to fund the foundation. In 1984, B&J’s went public and continued to see their sales climb, reaching nearly $100 million in 1991. The focus that B&J’s put into social causes as well as the wellbeing of their employees is what attracted and retained many of the employees to the company. In April 2000, Unilever, a leading multinational company branded in businesses in the food industries and in home and personal care, made a bid for B&J’s. At the time the deal was moving forward, top executives made several pre-deal commitments: B&J’s would retain it brand name, all B&J’s employees were to remain employed for a minimum of two years following the acquisition, and lastly, Unilever made an initial $5 million contribution to the B&J’s Foundation and committed to contribute a percentage of sales with a minimum of $1.1 million for 10 years following the acquisition. The acquisition was finalized in September 2000. At the time one of B&J’s strategic priorities for the company was to build a world-class supply chain anchored at 150 key sites around the world, which would eventually lead to a reduction of 100 manufacturing plants. Financial performance was measured and tracked by region and product category. Unilever was similar to B&J’s in the fact that they took pride in their corporate citizenship, stating that there is priority in being environmentally responsible and conducting in responsible corporate behavior. The purpose of this report is to address how B&J’s organizational design contributed to their business success and what challenges they face as they work to maintain their “recipe for success”. We recommend that B&J’s combat these challenges by adhering to its three core values: Product, Economic and Social. ANALYSIS
B&J’s faced was faced with many challenges after their merger with Unilever, but the brand had experienced a great deal of success in the past. B&J’s success was attributed to many factors including brand recognition, high quality premium ice-cream, a commitment to a variety of social causes on both a local and larger scale, and a distinctive organizational culture that attracted and retained many dedicated employees. However, despite its momentum of success which was beginning to spread to parts of Europe, the company began to suffer financial setbacks. Even after naming a new CEO a year later who increased sales to over $237 million, B&J’s only reported a net income of $3.4 million. It was apparent that despite their capabilities of producing a high-quality product that remained true to its core values or making and selling the finest quality all natural ice cream, many of the inefficiencies remained unaddressed, even as the company advanced in product development, brand awareness, and social mission.
Unilever was challenged in developing the best ways to integrate B&J’s under its corporate umbrella, without disrupting B&J’s dedication to a sustainable corporate concept of link prosperity between three interrelated parts: Product, Economic, and Social. However, with the company focused on improving distribution, inefficiencies, and finding cost synergies, restructuring was necessary even if it had to undermine the deep rooted...
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