1. How structurally attractive was the Russian ice cream market? Discuss how its industry structure can be made more attractive. The Russian ice cream market was not structurally attractive in 2002. The two major shocks to the Russian economy in 1991 (fall of the Soviet Union) and 1998 (financial crisis) had major impacts on the ice cream industry as well (Appendix A and B).
Supply-side economics of sale are high because companies must enter the market on a large scale in order to compete in price and distribution levels. Also, in order to produce and store ice cream companies are presented with high fixed costs. These costs include factories to produce and make ice cream, large warehouses to store and refrigerate the ice cream in order to keep the product from melting and going bad, and methods of transporting their products to various distribution areas such as Kiosks, gastronomes, and minimarts. In order for a new ice cream company to come in and compete on a large scale they would be presented with large upfront investments which may prevent them in entering the market. Demand-side benefits of scale are low based on the fact that consumers don’t rely on ice cream and do not need to consume it every day.
Toshio Takayama, director of the office of the president, described P&G’s marketing approach as “confident and aggressive.” He went on to say the company uses “its financial and marketing muscle, positioning its new product introductions to capture market share from competitors in a single rush.” Improved Pampers - Product Development P&G introduced the original Pampers in 1977. The product was well known, but it did not have a good reputation. Due dents in the cardboard box incurred during shipping, mothers assumed the diapers were of poor quality. In addition, American infants are generally larger than Japanese infants, so Pampers did not fit accurately. This caused leaks.
Cons: Retails could by less baking soda and could probably decide to sell baking soda at a higher price, which could deter some existing costumers from buying again. Option 2: Since a 40% of consumers use coupons when purchasing baking soda the brand director could attempt to increase consumer promotions. Pros: There has been some success in the past to this method and there is also an emerging trend of coupon clippers as mentioned in the case. Cons: This would lower the amount of revenue per unit sold and although consumer like to use coupons when purchasing baking soda, a heavy user of the product only purchases 5 times a year. Option 3: Increase the turnover rate of baking soda by introducing freshness indicator in the small 8oz packages of baking soda.
We need to make these sugary drinks not so easy to buy. Everyday the soda companies come out with some new drink to suck us in to buying them and getting us hooked. Pepsi and coke are famous for this, but we still feel the need to try the drinks that come out. Even though most of us know that these drinks we consume are bad for us. In conclusion I believe having a tax that increases the prices on sugary drinks is a good place to start for the obesity epidemic.
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.
s During the reign of Michail Grobachev in Russia’s political system, the state controlled all the distribution, planning, and production of food products. Following the disintegration of the Soviet Union in 1991, Russia turned to an open market rather than the constraining state-run economy. Ice cream producer: Ice-Fili, Russia’s largest domestic ice cream manufacturer, faced new competitors pouring into the Russian market to capitalize on this newly freed economy. An emerging competitor, Nestlé, a Swiss food and nutrition company, became a threat to Russian domestic ice cream producers as it quickly gained a substantial market share. In retaliation, Ice-Fili had to change the way its value chain, which was previously controlled by the state, functioned in order to stay competitive and maintain leadership in an ever competitive market.
The resources that matters the most are the ones that are hard to imitate which are the recipe for the ice cream and its unique variety of chunks, the logo as a quality symbol, its socially responsible image and its brand name in general. The problem is that these are valuable resources in United States, not necessarily in the Japan. The only resource that could be a source of competitive advantage (in Japan) through product differentiation are Ben & Jerry’s unique chunks which are unfortunately not enough to guarantee a success in a foreign market. The competitive landscape in the Japanese ice cream market creates a sufficient barrier to entry for most of the companies. There are six major Japanese ice cream manufacturers that sell premium Ice cream and on top of that there is another American premium ice cream manufacturer- Haagen-Dazs that already keeps a large share of the market.
the Korean currency) to make Korean exports more expensive and American imports less. Due to this, it cost the ice cream franchisee 16% more dollars to start operating. 3. Due to exchange rate jiggling, there was inflation in Korea. This was a by-product of won strengthening against the dollar.
Indeed there was a “fit” between the McAulsan breweries and the external environment. At the time there were very little local microbreweries offering a distinctive taste from the big breweries. If the customer wanted to taste something he would have to purchase imported beer at a premium. McAuslan fit nicely in this niche brewing distinctive beer locally at a cheaper price than imports. McAlsan beer also had the added value of being brewed without any additives or preservatives.