Ben and Jerry's case study
...rtant process - R & D team - Naming their ice -cream • Lack of strategic direction - Bad decision made in expansion overseas - In Canada: Didn’t consider the high Canadian tariff - In Israel: Revenue not earned from sales but only from licensing fee - In Russia: Withdrew from joint venture due to long management time needed (despite of the profitable sales and equipment invested) - In United Kingdom: No idea of pricing and packaging preference, simply launched a funny ad to counteract Haagen-Dazs • Lack of strategic direction - In France: No marketing plan and nobody from Ben & Jerry’s to coordinate - In Benelux: Launching in supermarket and convenience stores with wrong positioning • High concerns of social/ corporate charity mission - 7.5% of profits was donated to social causes - Expect distributors to be in line with them - E.g. 1 of the UK distributor actually donate 1% of B&J’s turnover to charity • Despite siphoning of significant market share from Haagen-Dazs, sales & profits were declining from 1993 - Laid back attitude of founders - Lack of strategic management - Lack of a strong international presence • Expansion into Japan looked to as a possibility - Revival of sales, profits hence investor confidence - International brand building/brand awareness Problems • Stiff international competition - Haagen-Dazs had already gained first mover advantage into Japan 10 years earlier - 6 major Japanese ice-cream manufacturers had already established a foot-hold in super-premium ice-cream • Consumer Health Conscience - Super-premium may equal to high fat for some consumers - May lose popularity in Japan due to health consciousness • Japan’s economy was languish - Financial crisis in 1997 - Value of yen fall - Increase exchange rate risk (if export from US) • Rise of price in US may hurt B&J if they export from US - Increase commodity risk • Commitment of capital and managerial - Attention from the distributors • Disagreement between board of directors - On the issue on entry of Japan market • Differentiation of product - Uniqueness of product through innovative marketing efforts • Product development - Use low fat ingredient - Use ingredient like green tea that is deemed healthier • Forward exchange agreement ...