Tuesday, April 25, 2017

Statement of strategy for Ben & Jerry's ice cream

The article Can You Say What Your Strategy Is points out that for a company with good strategy statement, being aware of its own advantage is very crucial. In the case of Ben & Jerry's ice cream, this homemade ice cream brand is outstanding for its superpremium mix-in ice cream with several kinds of chunks on it. By 1995, Ben and Jerry's had taken up 43% market share of superpremium ice cream, which was a great success for a new ice cream producer founded in the late 1970s. In addition, to adapt the trend of low-fat ice cream, Ben and Jerry's produced more kinds of superpremium frozen yogurt, insisting on its way of superpremium ice cream with advantage.

Aside from the advantage Ben & Jerry's, this corporation's scope is also well defined. On the one side, the defining scope means the company knows what the boundaries for its strategy of growth or development are. In addition, anywhere without scopes also encourages the ice cream dealer to explore. For example, the Finance of the company indicates that this corporation had not paid any dividend, which could be seen as one of the scopes it defined since the retained earnings can be invested in plant and equipment, advertisement, and R&D of new flavors ice cream. From the dimension of geographic location perspective, Ben & Jerry's two operated production facilities both located in Vermont, and the third factor is also in that State. Moreover, even Haagen-Dazs had used a discount to attack Ben & Jerry's market share, we did not see the company follow the strategy because the cost of mix-in ice cream was one-third higher than the smooth ones, and the competition on superpremium ice cream was concentrated on quality instead of price.

However, we could also witness that the Ben & Jerry's went beyond its scope in the period of transition on ice cream market. When the customers concerning more and more on low-fat ice cream, the company launched superpremium yogurt in 1992, continuing to take advantage of its superpremium products. But as the company suffered a loss in profit, it started to introduce premium ice cream in 1994, fighting against Haggen-Dazs face to face. The former scope of superpremium ice cream was broken through. Moreover, the 5-to-1 salary ration was also adjusted to 7-to-1 to accommodate with the new trend.

From the perspective of defining objectives, we cannot conclude that Ben & Jerry's strategy had been succeeded. First of all, the founder of the company said that he had never expected that the homemade ice cream brand he founded would grow up to such a scale, which made him have no specific goal in the operating of the company. Secondly, the ice cream had tried to explore the market in overseas, including UK, Israel, and Russia with no significant success. From the series of strategies the company adopted, it cannot be refined to a specific, measurable, and time bound-related statement.

However, it can be assumed that the Ben & Jerry's had already realized the importance of ensuring all its staffs understand the core value of the company, as the article states, "new franchisees were required to be owner/operator and to show they had a good standing of what Ben & Jerry's was all about". Indeed, a well-understood statement of strategy allows everyone in the organization to make individual choices that reinforce one another. Therefore, we can expect that the performance of Ben & Jerry's would get better after the tough period of market transition.

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