Ben & Jerry's Case Solution
Introduction:
Ben & Jerry was started by two schoolmates, Ben Cohen and Jerry Greenfield, in 1978 both were in their mid-20s, by keeping high quality and few team members.The founders took the company public to Vermont stockholder in 1984. Later on, when it was registered with Securities and Exchange Commission (SEC) for the nationwide sale of stock, the company’s name became Ben & Jerry Homemade, Inc.
Haagen-Dazs was the primary competitor in the super premium market, while it promoted a sophisticated image as well as it promoted a funky, caring image. Moreover, it was slow in covering the foreign markets. Cohen was against the company’s growth, so the organization's few experiences of operating abroad were restricted to itsplans that tagged along, however Haagen-Dazs did not face any issue. By 1997, it was in 28 nations with 850 plunging looks far and wide. Its non-U.S. deals were about $700 million, as compared with about $400 million of local sales. Ben and Jerry's, then again, had remote offers of just $6 million, with aggregate offers of $174 million. As far as non-U.S. super premium frozen yogurt deals are concerned, Haagen-Dazs and Ben and Jerry's were still the main brands, however, Haagen-Dazs was trouncing Ben and Jerry's. Later on, the company tried to enter the market of Japan to increase its sales.
Problem statement:
The problem was to allocate the market for Ben & Jerry’s whether to come through Seven Eleven Stores or Ken Yamada. Perry Odak was anxious to resolve the challenge of entering the vast market of Japan to generate more profits.
What criteria should be used to Perry Odak and his team in decidingwhether or not to enterthe Japanese Market?
Perry Odak with his team can use these criteria to take decision whether or not to enter the Japanese market.
Profitability of the company:
There is a significant potential in the Japanese market as the Ice-cream industry in Japan is expanding continuously which shows that it could help the company to increase its market share along with increasing the profit margin, therefore the management should focus on the profitability ratios while entering Japan. This is the criteria that can help the company to evaluate the chances of success in Japanese Ice-cream industry.
Porter five forces
Bargaining Power of Suppliers: Low
§ Few companies do not dominate supply industry § Brands can increase bargaining power § Substitute are readily available |
Bargaining Power of Buyer: High
§ Consumers are price sensitive § Various distribution channels §
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Degree of Rivalry: High
§ Growth rate is high § Diversity of rivals are high § Investment cost is high
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Threat of Substitutes: High
§ Other kind of Ice cream § Haagen-Dazs is having good market
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Threat of New Entrants: Medium
§ Difficult to gain Market shares § Brand enjoy relationships with retailers § Economies of scale |
Porter’s five forces could help the management to analyze the market conditions and the industry dynamics of the Ice-cream industry of Japan. As many players are operating in the market however, along with this factor, it is also clear that there is a significant potential in the market and the bargaining power of suppliers is low. Although the bargaining power of buyers is high however, the number of customers in the market is also high. Therefore, analyzing all these factors in detail could help the management to evaluate the Japanese market, either it is a good option for growth or not........................
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