Ben & Jerrys Homemade Ice Cream Inc.

GROUP-2 ALKA PGP/17/066 ANSHUL YADAV PGP/17/070 NISARG PATEL PGP/17/101 ABHINAY LAKRA PGP/16-D/180 SAURABH TIWARI PGP/17/110 SHILPI KUMAR PGP/17/112

Overview
Started

in 1963 in an old gas station in Burlington, Vermont

In

1981, expanded manufacturing into a second building

an average 60% annual growth rate for the unconventional mix-in flavours distributor of superpremium ice-cream

On

Reputed Leading Focus

on product quality, flavour selection & shelf space in most supermarket chains

Present In

1994 company announced its first quarterly loss

Timeline
1963: Ben Cohen & Jerry Greenfield met at Long Island
1977: Incorporation of the company at Burlington, Vermont 1980: Started packaging of ice cream pint containers

1984: Company went public with issue of 73,500 shares

1990: Expansion to major markets in US 1994 : FDA introduced new food labelling standard 1994: Launched its first advertising campaign June, 1994: Ben Cohen resigned as CEO Dec, 1994: Announced its first quarterly loss Feb, 1995: Holland assumed the position of CEO

Mission Statement
Ben

& Jerrys gave equal importance to the three elements- product, economic and social

Analysis

Product: Flavor differentiation was essential factor in product development Different product segments- super-premium ice-creams, smooth segment, lower fat content segment, super-premium frozen yogurt segment

Economic: Initial public shareholders- Vermont residents B & J controlled over 40% of the shareholders voting rights Never issued dividends

Mission Statement (Contd..)

Social: B & Js Foundation established to fund community projects Ingredient sourcing pursued with a social purpose

Thus, it can be said that B&J succeeded in meeting its social and product mission statement but compromised on its economic front.

Core Values
To To

engage employees in philanthropy and social change work create equal opportunity for everyone negative impact on the environment

Minimize

SWOT Analysis

Competitors
Haagen-Dazs
Oldest and largest brand (market share just below 50%) Market leader of smooth ice-creams Formidable presence in overseas markets

Dreyers Grand
Success in premium segment - extensive distribution network Manufactures other firms products Launched 5 yr strategic and marketing plan

Breyers
Presence in Premium segment Major competitor of Nestle in global ice-cream market Direct threat to superpremium segment

Financial Position

Gross Margin: Financial health of the company and its ability to pay operating and other expenses.
1992 Gross Margin= Gross Profit/Net Sales 0.284 1993 0.286 1994 0.262

Net Income Margin: Shows cost control of a firm and its ability to convert sales into profit
1992 Net Income Margin= Net Income/Net Sales 0.051 1993 0.051 1994 -0.013

Return on Equity: Earning of firm on its owners investment 1992 ROE= Net Income/ Shareholders equity 0.099 1993 0.969 1994 -0.026

Debt to Equity Ratio: Proportion of equity and debt used by firm to finance its investment

1992 Debt/Equity 0.039

1993 0.242

1994 0.447

Looking Ahead
Shift from super premium to less expensive premium segment
Stiff competition from Haagen-Dazs in smooth sub-segment Less investment in marketing and promotion Loss associated with opening of third plant because of automated handling processes Companys social initiatives under scrutiny Competitive difficulties owing to changing market dynamics lack of any organisational chart

Salary structure and ratio

Uneven demand forecasting

Recommendations

Bob Holland should focus on premium market segment as this segment had 42% market share while superpremium had only 14% in 1994, Market was saturated in superpremium Bob should think about market expansion in other countries like New Zealand & Australia where per capita production was at 38 and 33 US pints after US They need to work on SCM because of their inefficiency in production planning, purchasing, inventory management and forecasting demand

Customers are more brand and flavour loyal. So moving from mix-in to smooth icecream in super premium market segment may cause a problem for Ben & Jerry in capturing market share
Bob Holland should also take into account investment made for the new plant in loss analysis. It had a major contribution for loss in 1994 Selling price of mix-in & smooth icecream was same even though cost of production for mix-in was 1.33 times of smooth so Bob Holland should think to increase the price of mix-in icecream Introduction of products with new ingredients may cannibalize the market share of pre-existing mix-ins Organization should follow proper structure because there was ineffective HR policy in salary payments

Thank You