1.0 Introduction Ben & Jerry’s Ice Cream, founded in 1978 by two upstarts; Ben Cohen and Jerry Greenfield, is now one of the best homemade well known as a premium ice cream brands. It was firstly started in Burlington, Vermont which has a longer winter season as compared to summer season. It seemed as the worst idea ever to start an ice cream business in such a cold place. However, Ben and Jerry have their belief; Good Vibes, Good Business. There were definitely tough times during the first few years because they could not make any profit as they were inexperience owners with improper plan.
As years passed, they finally had realized that goals should be set based on “Values-led business” and their business could become bigger in society.(Ben&Jerry, our story, Para 1) They also have to understand that in order to manage the business well, they must need to understand relevant factors; external and internal environment. This report is to analyze the main relevant factors by tackling and eliminating its flaws that the business may encounter.
2.0 SWOT Analyze
2.1 Strengths Firstly, taste of the ice cream is their unique selling point as they have distinctive taste as they specially created recipes and creative funny name of each flavor which they made their ice cream have some story behind each flavor for example; in 2012 Ben & Jerry’s created a Schweddy Balls ice cream flavor for Alec Baldwin’s Saturday Night Live skit the ice cream is made of vanilla flavor mix together with fudge and rum malt balls.
Secondly, they do carefully select the raw materials with high standard to ensure the quality of the products. Lastly, the brand name and brand image which has been well known in the market for years, as well as “free cone day” promotion which apply all over the world in Ben & Jerry’s ice cream store. These are the strengths of Ben & Jerry’s made them distinctive and stands out from their competitors for instance,
2.2 Weaknesses The weaknesses of Ben & Jerry’s are the improper management team in building up the growth of the company and pricing strategy. Improper management team could lead to inefficient and resulting in ineffective results. Ben & Jerry’s prices the products at higher level as compared to other common ice cream at local stores. According to Paula Caligiuri “With an image honed by the founders Ben Cohen and Jerry Greenfield over almost twenty years, Ben & Jerry’s worked with sustainable, Fair Trade certified and organic suppliers; used environmentally friendly packaging; paid premium prices to dairy farmers from Vermont who did not give their cows growth hormones; and created business opportunities for depressed areas and disadvantaged people. Giving 7.5 percent of their pretax revenues to charity, publicly traded Ben & Jerry’s could not be accused of corporate greed. At the time of the acquisition, however, the Ben & Jerry’s alternative management style lacked the fiscal and managerial discipline market analysts and investors demanded. The company’s stock had fallen from almost $34 in 1993 to $17 in 1999.” (2012, para 1) These weaknesses may negatively affect the company in several ways. 2.3 Opportunities
Ben & Jerry’s does understood their consumer behavior that they do concern about healthy and life style. This results Ben & Jerry’s has produced Fat-Free, allergen free and healthy alternative ice cream products which they had come up with the new favor called Unveils Liz Lemon Greek Yogurt Flavor low fat and made by yogurt.. They do also consider of environment by practicing environmental friendly campaign not to use harmful chemical that may cause pollutions.
2.4 Threats Nowadays, there are many similar products which being produced in other reputable brands. This is one of direct competition that Ben & Jerry’s should take in consideration. People do not need to consume ice cream daily they have more choices on choosing to eat other kind of deserts. In additional there is also a difficulty in relied on one supplier as some of the product consists of seasoning raw materials which can cause shortage at times. For example; natural disaster could affect the shortage on production on raw material or the different climate from different part of the world.
3.0 External Environment
3.1 Demographic Trends As we know that Ice cream is all time favorite to all range of ages in every part of the world. However, in the business, there are definitely external factors that could affect the business. Firstly, Demographic Trends defines as factor that involves population, life style and income. There are many different groups of people and they do have different concern about life style and different level of income. For example; kids love to eat ice cream but they might not have enough to buy an expensive ice cream to eat, this could be effected the premium ice cream brands like Ben & Jerry’s.
3.2 Economic conditions Economy factor is also an important factor that the business could consider because it plays a big part as well. This factor involves inflation rate and unemployment rate in the country as it could affect buying power. If there is a crisis, the company must be prepared to deal with the problems as revenue may decrease and there are many other problems occur. Most of people would not purchase a pint of ice cream that cost almost twenty Singapore dollars. As ice cream is consider as unessential consuming product human do not need to consume day-to-day.
3.3 Political/ Legal Forces Ben & Jerry’s is not only operating domestically, it does expand branches internationally. Thus, political/ legal forces factor plays an important part to the organization when they deal internationally. Taxation takes place as it is a requirement from government. Labeling is also under political/ legal forces that require different languages on labeling in different countries. For example, in Singapore, the organization does pay CPF to all their employees. Doubt the government has required to pay tax too high this will totally affect Ben & Jerry’s.
3.4 Socio-cultural conditions Singapore is a racial harmony country where cultural conditions are very important for the organization to consider and operate well because there are many different groups of people. In order to manage the business well in Singapore, there must be basic understanding about the culture for example uncertainty Ben & Jerry’s has come out with any product that contain of pig oil certain religious such as Muslim will not buy their product.
3.5 Technological changes. As innovation is being created daily, technology has developed. This plays a big part in improvement of the company. The company must always be updated with new technology in order to improve in production. It helps the business to be more efficient and effective as it could save time, labor cost and manpower. As well as if the machine to make ice cream has come up with latest technology to be easier to use at home people will buy the ice maker and make their own homemade ice cream rather to spend more money to buy from Ben & Jerry’s.
4.0 External Analysis (Competitive Environment)
4.1 Intensity of rivalry among competitors Intensity of rivalry among competitors of Ben & Jerry’s are high due to the direct competitors which are already existed in the ice cream market both local brand and internationally brand for example in Singapore Udder’s ice cream which has grown rapidly fast and high demand from local customer in Singapore, Udder’s ice cream has some flavor that could win local people’s heart which Ben & Jerry has overlooked such as “D24 Durian – fresh succulent D24 the Classic Range Fresh D24 durian flesh, mushy blobs of it, churned into ice cream” or “opi-C EcstasyTM made which made of milky local coffee Classic Range Another u.d.d.e.r.s original! Kopi-C – a local milky coffee drink – just got a new life as our revitalizing, aromatic strong coffee flavour. A local favourite”.( udder icecream 2013, para 1 to 2). To this factor Ben & Jerry might have lost local customers who love the taste. For Internationally brand like Cold Stone also come up with very creative idea of presenting their product (ice-cream) by letting the customer customize their own flavors by showing it in front of the customer pretended like they are cooking a dish behind the transparent wall. These direct competitors are totally affected to Ben & Jerry’s a lot of consumer who might be attracted by new idea for presenting to sell the ice cream.
4.2 The threat of new entrants The threats of new entrants are high. Nowadays, there are many new business investors coming into the business line as Ben & Jerry’s. They are new direct competitors in the future that Ben & Jerry’s should really be aware. Ice cream is becoming very common to find on the street around the world especially in Asian country. However to start the selling ice cream is not difficult but to build the brand reputation and well known on high premium standard is not so easy as well.
4.3 Threads of substitutes These days there are many substitutes product for ice cream such as frozen yogurt, bubble milk tea, Taiwan desert, cake etc. people’s taste has changed they would not every day craving for ice cream. In Singapore most population rate are Chinese, Chinese people would prefer to consume other kind of desert instead of ice cream for example “The Black Ball Signature grass jelly desert which topped with fresh sweet potato, yam balls, red bean and pearls which customer can choose to go hot warm or cold” (The Straits Time, Taste, page 18, March 3, 2013). The new treads of substitutes like glass jelly will be much affected the business of ice cream like Ben & Jerry’s in many factors such as price, health concern or choices to customize. Therefore threads of substitutes for Ben & Jerry’s are high.
4.4 Supplier Supplier to Ben & Jerry’s is low as to make ice cream there are in need of many kind of raw food materials which are available in different kind of form. The main materials are milk, eggs, sugars and salt these are easy to find supplier to buy all these ingredients.
4.5 Customers Ben & Jerry’s has always come out with the exclusive flavor of different kind of ice cream which other ice cream brands are not capable to made the equivalent sense of taste as Ben & Jerry’s. For example Money Chanky people who love banana will be addicted to this ice cream flavor as it makes the taste rich of banana this kind of sensitivity would be able to make the customer be loyalty to Ben & Jerry’s. Demanding for their best top ten ice cream flavors are still high and customers will always desired to consume their products.
5.0 Internal Environment analysis 5.1. Resource types There are two type of resources, first one is Tangible resource is the resource that have the physical form such as human, land, machinery ect. The other resource is Intangible resource is nonphysical which is not form a physical form, such as patents, trademarks, copyrights, goodwill and brand recognition etc. According to Ben & Jerry’s they believed that a company could have the best welfare for the employee however that does not satisfy the employee if they cannot manage well it will not helping them work to their potential (Ben & Jerry’s Double-Dip, 1997, page 172) This show that Ben & Jerry’s do have a very strong human and management resources within the firm. For the intangible resources such as the trademarks it is very recognize “Cow Print” most of people will think of Ben & Jerry’s ice cream.
5.2 Firm Capabilities “Capability defines as skill and ability in doing work activities needed in business. To analysis the capabilities there are two ways which are functional analysis and value chine analysis.” (ITM study guide, 2013, page 77) “Free cone day” is always the signature promotion for Ben & Jerry’s ice cream since everyone love to eat good desert with the cheaper price. The underlying mission of Ben & Jerry’s is to search for original and innovative ways all three parts are social, product and economic.
6.0 Conclusion Ben & Jerry’s since they start up their ice cream business since 1978 till today are internationally well known all around the world, it has maintained its own identity. Their special creation distinguishes gives them a competitive advantage over their competitors. What they need now is to expand globally to compete effectively and efficiency with other brands. The innovation factor in their ice creams differentiates them from the predictable flavors of other brands with the name and taste which could not find in other brands Their hard work in becoming green e.g. by planning to launch environment friendly freezers which would reduce greenhouse gases emission sets them apart from other companies. They have to remain focused on their objective and mission with equivalent emphasis on keeping in mind what is the consumer’s demands.
7.0 Recommendations In my opinion Ben & Jerry’s should have come up with local signature flavor in different country to target more on local customer. Since it is now owned by Unilever, they have the financial funding required for them to expand their manufacture worldwide. As well as, they should change the consumer perception of having the ice cream only in summers or spring time to anytime dessert i.e. they should work towards deseasonalising their sales.