Tuesday, December 1, 2015

Could Ben & Jerry say what their strategy was?

The article 'Can you say what your strategy is?' postulates that a firm's strategy statement, as distinct from any statements of mission or core values, needs to be a succinctly-phrased summary of how exactly the company would pursue certain measurable objectives over a given period. Whereas mission and values define the company's general direction and underlying philosophy, strategy defines the exact tangible ends that a company wishes to meet by deciding what exactly the scope of its operations would be and clearly identifying its competitive advantages. Competitive advantage in turn encapsulates the value it delivers to customers and the unique methods of value delivery that set it apart from rivals.

Ben and Jerry's began as a small business in the 1970's with ostensibly little purpose besides providing two friends something to do with life. Over time, and with the financial success that their innovative ice creams brought, they were able to imbue the firm with a distinct core value system. A deep commitment to social and environmental issues, equitable management and salary structures and a policy to buy fresh and local became the mainstays of Ben & Jerry's corporate culture and, therefore, its entire organizational outlook. Ben & Jerry's customer value proposition was also clearly defined by the creative flavors of its creamy "superpremium" ice cream that appealed to a market segment more quality- than price-conscious. In the initial years, the focus on making "mix-in" ice cream flavors also clarified the scope at least of the firm's productive activities.

In terms of defining clear objectives, Ben and Jerry's strategy faltered. Both the founders had an interest in larger social issues but were uncomfortable with the idea of being a profit-making enterprise. This was in spite of the fact that profitability basically underwrote all three elements, i.e. product, economic and social, of their mission statement and not vice versa as founder Ben Cohen seems to suggest in the case. In my opinion, this ambivalence on profit while being a profit-making enterprise inhibited meaningful goal-setting. The pursuit of profit would have enabled the founders to clearly see where they wanted their company to be in terms of market share and in comparison to major competitors over the foreseeable future. This clarity of vision would have provided the basis for setting measurable objectives that would then translate into the company being better able to meet its cultural ideals. While the founders' idiosyncratic methods of product development registered consistent market success, the company faced persistent challenges in streamlining production, marketing, sales and distribution. These problems became increasingly acute as changing market dynamics compelled the firm to reassess its scope and pursue expansion and product diversification. In the language of the article, while Ben and Jerry's definitely held a unique customer value proposition, it struggled to put in place the unique configuration of supportive activities needed to deliver said value.

In conclusion, I believe the founders were unable to articulate clear strategy for their company. Consequently, strategic weaknesses compelled them to hire a CEO from outside of their value system. Eventually, in 2000, Ben and Jerry's sold-out to a global conglomerate, Unilever, placing the entire value system in jeopardy.

Muhammed H Haider

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