Ben And Jerry Aeurtms Ice Cream example essay topic

Ben and Jerry^aEURTMs Introduction: Overview of the Case The corporation of Ben and Jerry^aEURTMs first began on May 5, 1978 in a small town called Burlington located in Virginia. The founders of this ice cream parlor were Ben Cohen and Jerry Greenfield with only limited funds of $8,000, they produced a famous nationwide parlor that caters to millions of people. Specialty flavors of Chocolate Chip Cookie Dough, Cherry Garcia, Rain Forest Crunch, and frozen yogurt are attractions and symbols to the corporation. Establishing themselves as a top tier competitor in the ice cream industry. The first shop was opened in an abandoned gas station, making their drive and motivation during that time inspiring. Ben and Jerry^aEURTMs sold their premium ice cream products to supermarkets, convenience stores, grocery stores, and restaurants.

They marketed themselves successfully, in which many consumers held Ben and Jerry^aEURTMs ice cream as a standard in comparison with other ice cream. From only a few thousand dollars, the business grew to a million dollar corporation. During the 1990^aEURTMs, they experienced losses like no other, by losing $1.87 million on sales of $148.8 million. The mission statement consisting of the social mission, product mission, and economic mission dictated the behavior, practices, philosophies, ideologies, and principles of the corporation. Showcasing the ice cream firm as unusual in comparison with the fundamental practices of Corporate America. Their operations consists of globally expanding, improving the quality of a broad community, making, distributing, selling the finest quality ice cream, increasing value for shareholders, and providing employees with rewards and benefits.

Ben and Jerry^aEURTMs are always looking to improve the quality of ice cream by creating, innovating, and promoting their decisions and integrating them within the mission statement to function in a consistent and repeatable manner. Problem Statement: With losses of $1.87 million on sales of a record high in net sales of $148 million, the focus is on the income statement. The income statement shown in Exhibit 1 illustrates the problem of spending too much on expenses. The budget on expenses was not clearly thought out, as in 1994 Ben and Jerry^aEURTMs lost a significant amount of money. If this type of budgeting continues, the ice cream parlor will stabilize itself, allowing new competition to enter the market.

One factor to this expense is the hiring of 537 employees to work for Ben and Jerry^aEURTMs. When the season of winter enters, these employees will not be useful because business definitely be slow. The productivity level will be low, and therefore should not be wasting money on labor when it is not needed. This leads to the other factor of not having properly trained managers, leading and directing the staff of saving and making money. Overall, the management level needs vast improvements in order to support Ben and Jerry^aEURTMs culture with financial structure and foresee money saving opportunities by cutting labor costs. Strategic Analyses: A couple of models are needed to explore the core of the business of Ben and Jerry^aEURTMs.

The first model will be the S.W.O.T. analyses, which will describe the strengths, weaknesses, opportunities, and threats of the company. Illustrating both interior and exterior positives and negatives of the firm, and helping a new perspective develop in order to make clear judgment calls for improvement. Second, Porter^aEURTMs Five Forces model will be the conclusion of the outline, and it will better explain in detail the threat of new competition and how it is volatile to the company. Strengths: Strong brand name recognition after 17 years of service. Small Vermont company became a top tier player in the ice cream market, surpassing record high sales for their firm in 1994. A nation-wide company focused on their mission statement to improve the quality of their surroundings, to promote job growth, and serve consumers with premium ice cream.

Their drive and motivation in 1978 is truly inspiring as they started their firm from an abandoned gas station will limited funds of $8,000 and turning into $148 million 17 years later. They have a wide variety of flavors that consumers can distinguish themselves with Ben and Jerry^aEURTMs and any other ice cream parlor. Donated second-quality ice cream products to the homeless, handicapped, and community groups for better enjoyment of dessert, and helping with fund-raising activities to provide quality social gatherings among any group. Established The Ben & Jerry^aEURTMs Foundation, Inc. a nonprofit organization that received 7.5 percent of the company^aEURTMs pretax profits.

Provided employee benefits such as insurance, dental and medical, sick days, vacation days, 401 K plans, and stock shares to policyholders to showcase the appreciation for the workforce as well as share the prosperity within the committed firm. Weaknesses: Lack of management skills among the firm, not taking charge to cut down costs when necessary. The expenses are too high, they need to balance themselves out by cutting costs in labor and some ice cream parlors in Vermont due to the high contribution to debt from those stores. Computer control programs and software accounted for a $6.8 million dollar write-down in the year 1994, affecting production and products tremendously in which led to the high expense cost of their income statement. Too many employees for the amount of stores needed, due to the uprising hiring of the 537 employees needed to run the stores, an evaluation needs to be made to distinguish and research slow seasons from busy seasons.

Ben Cohen was starting to misbelieve in himself that he can run the company, and that type of negativity can be disastrous to the company. Being pessimistic will only cause added worries and distress and a structure of wildness throughout the firm. They have a slow development of products making their target market limited with what they can provide and sell. Their market share was declining to shareholders, showcasing a little instability within the corporation, and vast improvements is needed to be made.

Opportunities: Were able to promote themselves within the 50 states by 1990, enabling almost the majority of supermarkets within those regions to supply their product to consumers. Affecting other supermarket stores to carry their product due to the high demand of premium ice cream. Every year Ben and Jerry^aEURTMs has been able to expand nation-wide and take it one step further by expanding towards other nations. They are reaching markets in Israel, Russia, and Canada, helping their firm to be known worldwide. Diversifying their suppliers an distributors to eliminate the bargaining power of suppliers and full take charge of their expenses on the income statement. Able to recruit powerful managers to turn the firm from making millions to a structured unified billion dollar corporation.

Have the ability to compete globally and become the top tier player in the ice cream industry, forcing other competitors to change or merge. Threats: Haagen-Daz is a huge competitor in the ice cream industry with Ben and Jerry^aEURTMs. They equally shared 84% of the super-premium segments in 1994. Enabling profit share to be distributed among the two firms.

Increase competition can cause severe problems with alternative, fat free, or any enticing products can shift the price of Ben and Jerry^aEURTMs causing budget cuts within their income statement. The frozen industry became prominent in the United Stated allowing a 3.3% increase growth in 1994, affecting new competition to enter the market and provide consumers with new variety. Substitutes can cause problems throughout the nation because more people will want similar at low prices, and with the economy not improving consumers are looking to spend less to satisfy their needs and wants. Ice cream is not a need, and consumers can look for alternatives and it will devastate Ben and Jerry^aEURTMs ice cream shop dramatically.

Overall, the S.W.O.T. analyses have provided a in-depth look in how they stand in the ice cream industry. They have a lot of strengths in comparison with their weaknesses, and in order for Ben and Jerry^aEURTMs to maintain their competitive edge, Porter^aEURTMs Five Forces model will describe the five key attributes that the firm needs to understand. The threat of new entrants, the bargaining power of both buyers and suppliers, the threat of substitutes, and the intensity of rivalry will clearly illustrate what Ben and Jerry^aEURTMs is dealing with. The threat of new entrants: The market was divided into four subcategories in which new competition can focus on each individual segment. With that in mind, Ben and Jerry^aEURTMs will have an enormous problem competing because already they are struggling with their management level.

The four levels are economy, regular, premium, and super-premium. With creativity a small company can easily access itself through economy and market later on as a super-premium ice cream. In which, Ben and Jerry^aEURTMs will have more trouble competing because of their lack of management skills. As the company gets larger it is harder for the owners to control.

The bargaining power of buyers and suppliers: There is limited amount of power because Ben and Jerry^aEURTMs corporation is diversified in which they can get lower prices from elsewhere and do not depend on one source. When consumers pay for Ben and Jerry^aEURTMs ice cream, they are expected to pay for quality ice cream and therefore the price is high and consumers are willing to pay for it. The threat of substitutes: Custard is a substitute in which is premium ice cream that is smooth and Culver^aEURTMs has established themselves as a restaurant that serves them. Other desserts such as cakes, yogurts, and pies serve as alternative products during cold season in which ice cream can not really be eaten. In the summertime, cheap generic brands can compete wit price against Ben and Jerry^aEURTMs if they are not trying to spend a lot for a cold treat. The intensity of rivalry: In the super premium market, Haagen-Daz looks to be a competitive threat as they are both top tiers in the ice cream industry.

Other companies such as TC BY and Dairy Queen do not look to be premium qualities in the ice cream market, and have really no competitive edge on Ben and Jerry^aEURTMs, because they prefer the quality for the same price. Otherwise, if Ben and Jerry^aEURTMs management style keeps progressing and doesn^aeurtms change the market will have new top tiers with Ben and Jerry^aEURTMs going bankrupt. Market Analysis: Consumers consume more ice cream than any other nation in the world, spending around $10.5 billion on retail on ice cream and related products. The industry grew 3.3% in 1994 with low fat products and frozen desserts, while ice cream itself grew 1.2% the previous year.

The industry is categorized with four subtopics of economy, regular, premium, and super-premium. Super-premium totaled 13% in ice cream sales, while the premium led all categories with 42%. It has steadily increased 5% a year and has stabilized itself in 1994. The reason for the growth is primarily due in supermarket sales, in which consumers rather have a carton of the ice cream and eat it at home. There is a market specifically for the adults in which is categorized as well in four groups premium, gourmet, low-categories, and confectionery. They promote ice cream bars, sundaes, low fat products, and sundaes to cater the health conscious.

Frozen yogurt was a success after franchising contributed to the huge percentage increase in the 1990's, establishing a revenue of $50 million. Distribution is a key point to the success of most ice cream stores, without the proper tools in distributing the ingredients and products, consumers can not attain the products in supermarket stores in which most sales accrue. Options: Hire a new management staff with tremendous experience that knows how to motivate people and employees. Start dreaming some new goals. Spend more money on marketing, research, and development. Attract people by advertising on the internet.

Watch their budget, and cut down on expenses such as the staff, and other labor costs. Recommendations: The option I would choose to help Ben and Jerry^aEURTMs with the business is option #5 in the meantime. Getting rid of all unnecessary labor costs that affect the expense worksheet on the income statement, because in 1994 there was tremendous amount of expenses wasted that could have been budgeted better. Using option #1 would be a great way to recruit management in order to advance Ben and Jerry^a EUR~s as a top tier player in the industry and will make them a global giant within no more than decade.

I would then use option #4, a cheap effective way to create a new opportunity for more consumers and a quick efficient way to boost up profits. The internet is a great way to attract many consumers you could not attract locally. Selling frozen inventory through a website will create more profits to the corporation. With more money on hand, option #3 would be best to incorporate niches in the market to help expand ideas within the firm of creating a new frozen treats for different categories of the ice cream industry. Finally, option #2 should be used, because with a new product, it would be best to challenge competitors with a few of them experiencing heavy losses as it is.

As well as having the same mentality as Ben Cohen And Jerry Greenfield had when their drive and motivation enabled them to become nationwide ice cream giants in the market. Having the same desire will help create a passion that will progress the parlor forward. The options described are steps that can be used to develop Ben and Jerry^aEURTMs from a two-men leading to a teamwork environment. My personal opinion in this matter is to reduce costs and introduce a new line of product to help both employees and customers.