Dipping Dots Ice Cream

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DIPPIN DOTS ICE CREAM QUESTION 1 PESTEL analysis is “a framework that categorises environmental influences into six main types: political, economical, social, technological, environmental and legal.” (Johnson et al, 2010) The costs involved in manufacturing of ice cream were high, as the ingredients and equipments used were expensive. Special equipment and freezers were required at retail outlets because the ice cream had to be served at super cold temperatures. Older generations were Dippin Dots most loyal customers and they introduced it to younger generations, furthermore the ice cream did not last very long at outside temperatures and was beaten at innovation when competitors came up with the slab concept and selling of their ice creams in convenience stores. Earlier in development the flash freezing of liquid cream was patented but a patent infringement lawsuit was rejected and competitors could make products similar to those of dipping dots. Porters five force model is “a framework for industry analysis and business strategy development.” (Porter, 2008, p68-104) The loss of the patent broke the barrier of entry into the market hence there was a high threat of new entrants. Buyer power was low because of the high premium price for a cup of Dippin Dots ice cream, the most common buyers were people who grew up on it. The threat of substitutes was high as there were many alternatives customers could opt for in the frozen food section. Competition in Dippin Dots industry was stiff, there were two large companies that dominated the industry, 500 small businesses and other family owned businesses that all produced ice cream. Question 2 A value chain is “a chain of activities for a firm operating in a specific industry.” ( Porter 1996, p61-78) Dipping Dots ice cream was produced from super freezing of chemicals and liquid cream by process called flash freezing

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