In 1978, with a $5 ice cream making correspondence course from Penn State University and $12,000, childhood schoolmates Ben Cohen and Jerry Greenfield started an ice cream business in a renovated gas station in Burlington, Vermont. Ben and Jerry’s quickly grew into a leading worldwide ice cream manufacturer, known for its innovative flavors and all-natural ingredients made from fresh Vermont milk and cream. Early flavors included Rainforest Crunch, Peace Pops, and Chocolate Cookie Dough. Ben & Jerry's also established a reputation of an anti-corporate style and charitable contributions of 7.5 percent of pretax profits.
Fast forward 20 years, to the Fall of 1997, the basis for this strategic analysis, and Ben and Jerry’s is losing market share of super premium (high-fat-content) ice cream to Häagan-Dazs and is seeking international growth opportunities in Japan to boost flagging sales. Firms must continuously revisit both corporate and marketing strategies to maintain their competitive edge. In this paper, we will take an inside look at Ben and Jerry’s situation, conducting environmental scanning of the current (1997) situation, crafting and implementing our own marketing strategies, and evaluating these marketing strategies.
As of 1997, Ben and Jerry’s international sales totaled only 3% of total sales ($6 million) while it’s main competitor, Häagan-Dazs, a first mover in the U.S. and overseas, had 64% of total sales ($700 million) across 28 other countries. Prior to 1997, Ben & Jerry’s had attempted to move into foreign markets in Canada, Israel, Russia, United Kingdom, France and Benelux. None of these ventures were well thought out with comprehensive planning causing some ventures to become utter failures while others provided negligible profits or were so cost prohibitive that they were abandoned completely.
With market share and profits declining, corporate leadership was looking seriously at international market opportunities and the large Japanese market, arguably the second largest ice cream market in the world, was their strongest opportunity. There were two possible strategic alliances in the Japanese market through Seven-Eleven or Ken Yamada, a Japanese franchisee of Domino’s Pizza for Japan. An analysis of the external and internal forces shaping the ice cream industry is necessary in order to determine the effectiveness of Ben & Jerry’s current (and prospective) corporate and environmental strategies. To accomplish this, we will utilize several analytical tools to characterize the strengths and weaknesses of the industry and the effectiveness of the company’s strategy, particularly through the use of SWOT Analysis, the Five C Analysis, the Sixth (Non-Market) Force analysis, and key factors of success. We will craft our own strategy based on marketing, layout the proposed implementation of those strategies, and discuss ways to evaluate our strategies.
Following is a complete analysis of Ben and Jerry’s situation, assessing internal (controllable) strengths and weaknesses and external (uncontrollable) threats and opportunities to their continued success:
|Factor |SWOT Analysis - Factors | |Location | | | |Favorable |Unfavorable | | |Strengths |Weaknesses | |Internal |Prestigious, well-known brand name among U.S. customers |Excess factory capacity nearing 50%...