Ice-Fili Case
Winter
13
Ice-‐Fili Case Study Comm 491 – Momo Deretic 9:30am Tuesday/Thursday
M a r t i n M , R y a n P , S o h y u n P , D i e g o S
Introduction From 1996 to 1998 Ice-Fili suffered from huge increases in costs that gradually ate at their margin at alarming rates. Even worse, from 1999 to 2001 they had a huge decrease in sales and got into liquidity problems. The economic situation for Fili seems to be doomed even more when you add growing and strong competitors to the mix. But what caused all this? In the following problem analyisis, we will discuss basically 4 categories of issues that Ice-Fili is undergoing: Manufacturing, Distribution, Marketing, and Price. An insight of manufacturing problems seems to date back to the soviet era, which is basically when Ice-Fili got stuck in. The fact that their manufacturing assets are now nearly obsolete is their main issue. We will then discuss distribution, and why the fact that Fili doesn’t own or control their distribution networks makes their product unavailable and unreliable to vendors. Finally we will explore Marketing and Pricing, which have a connected negative impact on Ice-Fili’s sales. Needless to say, Fili is not at the top or the bottom of the low value-premium pyramid, but rather swimming blindly in the middle. These 4 basic categories present a very difficult situation for Ice-Fili and their economic struggles. We will now discuss them in more depth. Manufacturing Ice-Fili has fallen behind. In terms of their physical manufacturing capabilities they are battling large international competitors who have vast capital to invest in ensuring their plants are cutting edge. Ice-Fili does not have the same amount of capital, and thus their manufacturing plants are visibly inferior to the extent that they are still using soviet era machinery to produce some of their varieties. The majority
13
Ice-‐Fili Case Study Comm 491 – Momo Deretic 9:30am Tuesday/Thursday
M a r t i n M , R y a n P , S o h y u n P , D i e g o S
Introduction From 1996 to 1998 Ice-Fili suffered from huge increases in costs that gradually ate at their margin at alarming rates. Even worse, from 1999 to 2001 they had a huge decrease in sales and got into liquidity problems. The economic situation for Fili seems to be doomed even more when you add growing and strong competitors to the mix. But what caused all this? In the following problem analyisis, we will discuss basically 4 categories of issues that Ice-Fili is undergoing: Manufacturing, Distribution, Marketing, and Price. An insight of manufacturing problems seems to date back to the soviet era, which is basically when Ice-Fili got stuck in. The fact that their manufacturing assets are now nearly obsolete is their main issue. We will then discuss distribution, and why the fact that Fili doesn’t own or control their distribution networks makes their product unavailable and unreliable to vendors. Finally we will explore Marketing and Pricing, which have a connected negative impact on Ice-Fili’s sales. Needless to say, Fili is not at the top or the bottom of the low value-premium pyramid, but rather swimming blindly in the middle. These 4 basic categories present a very difficult situation for Ice-Fili and their economic struggles. We will now discuss them in more depth. Manufacturing Ice-Fili has fallen behind. In terms of their physical manufacturing capabilities they are battling large international competitors who have vast capital to invest in ensuring their plants are cutting edge. Ice-Fili does not have the same amount of capital, and thus their manufacturing plants are visibly inferior to the extent that they are still using soviet era machinery to produce some of their varieties. The majority