Wednesday, April 26, 2017

Ben and Jerry’s Charitable Strategy Today

Ben and Jerry’s is a unique brand that incorporates ice cream sales and philanthropic causes. Since its inception, the company has become a very active part of the charitable community and has set itself apart from its competitors in this area.  From my perspective, the reason that the company was able to maintain such a high level of charitable giving was that it was not a part of a larger corporation, who could decide where funds were given.  

The case study ends in 1994, and does not speak to what happened to the company in last quarter century.  Ben and Jerry’s was sold to Unilever, the Dutch- British consumer company, in 2000. The question became can Ben and Jerry’s retain the strategy that had made the company such a success in the 1980’s and majority of 1990’s, or would the new parent company change the direction of the company. More specifically, would Unilever decide to end or reduce the social mission that was such a large part of Ben and Jerry’s identity.

In Collis and Rukstad’s article “Can you say what your strategy is?”, they describe the main components of strategy: objective, scope, and advantage.  They also include the concept of the strategic sweet spot. The strategic sweet spot is where customer’s needs meet the company’s capabilities, and these capabilities are not offered by the company’s competitors.  Ben and Jerry’s core competencies included the use of only Vermont ingredients, super-premium ice cream, original mixed-in flavors with unique names, and its focus on social causes.  These competencies meshed with the customers’ needs, who were willing to pay more for mixed-in flavors, appreciated the strict ingredient requirements, and liked their social mission.   

With Unilever taking over, could Ben and Jerry’s continue its charitable mission, and continue to maintain the companies sweet spot, under the power of a new corporation. And the answer was yes, with the use of a unique strategy.  A compromise was written into the acquisition contract, which established an external board that would only deal with charitable donations. The board would be completely autonomous, could sue Unilever if they felt their charitable objectives were not being implemented, and had the ability to nominate its own members.  Both Ben Cohen and Jerry Greenfield headed the board, and had the authority to aggressively pursue new social programs and targets.  The board still exists in the present year, and has taken up such causes as marriage equality, climate change, and campaign finance reform.

Charitable giving is a major part of Ben and Jerry’s strategy that sets it apart from its competitors, or as defined in Collis and Rukstad’s article, charity is its advantage. Unilever saw that the company’s strategy was successful, and gave Ben and Jerry’s the power to make some its own decisions in certain areas. Retaining, and even expanding its charitable giving, Ben and Jerry’s maintained its sweet spot and continues to do good work in the community. 

Article used:
David Gelles, “How Ben and Jerry’s Social Mission Survived being Gobbled up”

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