Dippin' Dots Case Analysis
CASE ANALYSIS – Dippin’ Dots Ice Cream
I. Key issues and problems
• Soaring operating costs and plummeting sales
• Competition from copycat products (loss of patent)
• International shipping storage problems
• Retail storage problems – convenience factor
• Lack of new growth opportunities in product lines
II. Analysis of external environment
General environment
• Technological – better storage system at retail locations,
• Economic – operating costs rising
• Sociocultural – innovations such as slab concept, independent scoop shop, etc surpassed Dippin’ Dots ice cream of the future innovation
• Legal – patent infringement lawsuit was dismissed, allowing competition to sell similar products
• Demographic – older generation still likes Dippin’ Dots, as well as introducing newer generations to the product
Industry environment
• Potential entrants – high threat due to loss of patent; product can be copied by competition and former employees
• Suppliers – high input costs to flash freeze ice cream gives suppliers medium power because of unique freezing process
• Buyers – low buyer power because they pay a high premium for the product and are more dedicated fans
• Substitutes – high power of substitutes because there are many substitutes – large variety of frozen desserts such as other ice cream brands, frozen custard, sherbets, gelato, etc.
• Industry competitors/rivalry – high rivalry from family owned businesses, full line dairies, and large international companies
Competitor environment
• There are two giants dominating U.S. ice-cream industry: Nestle and Unilever PLC of London and Rotterdam, along with about 500 small businesses
• Challenge for producers is to woo customers away from competitors and sustain a loyal fan base by continuing to innovate
III. Analysis of internal environment
I. Key issues and problems
• Soaring operating costs and plummeting sales
• Competition from copycat products (loss of patent)
• International shipping storage problems
• Retail storage problems – convenience factor
• Lack of new growth opportunities in product lines
II. Analysis of external environment
General environment
• Technological – better storage system at retail locations,
• Economic – operating costs rising
• Sociocultural – innovations such as slab concept, independent scoop shop, etc surpassed Dippin’ Dots ice cream of the future innovation
• Legal – patent infringement lawsuit was dismissed, allowing competition to sell similar products
• Demographic – older generation still likes Dippin’ Dots, as well as introducing newer generations to the product
Industry environment
• Potential entrants – high threat due to loss of patent; product can be copied by competition and former employees
• Suppliers – high input costs to flash freeze ice cream gives suppliers medium power because of unique freezing process
• Buyers – low buyer power because they pay a high premium for the product and are more dedicated fans
• Substitutes – high power of substitutes because there are many substitutes – large variety of frozen desserts such as other ice cream brands, frozen custard, sherbets, gelato, etc.
• Industry competitors/rivalry – high rivalry from family owned businesses, full line dairies, and large international companies
Competitor environment
• There are two giants dominating U.S. ice-cream industry: Nestle and Unilever PLC of London and Rotterdam, along with about 500 small businesses
• Challenge for producers is to woo customers away from competitors and sustain a loyal fan base by continuing to innovate
III. Analysis of internal environment