Ben & Jerry Case Analysis

Strategic summary of Ben &038 Jerrys Home do, Inc. mint B&038J Serve a Double Scoop of Being ordinarys and Making parkland? ESM 210 professor Delmas Final Paper November 21, 2000 Alex Tuttle Vicky Krikelas 1 BEN &038 JERRYS ICE CREAM Table of confine INTRODUCTION. MARKET interpretation.. sloshed DESCRIPTION. THE MISSION STATEMENT 1 1 1 2 orbiculate embodied schema 2 CORPORATE ENVIRONMENTAL STRATEGY 4 STRATEGY ANALYSIS 8 quint Forces pretense of Competition. 8 rig out Analysis.. 11 Key Success Factors.. 11 STRATEGIC CONSISTENCIES.. 12 STRATEGIC DISCONNECTS. 13 UNILEVER skill. 14 RECOMMENDATIONS &038 CONCLUSION 15 BIBLIOGRAPHY 17 mannikins condition 1. FIGURE 2. FIGURE 3. FIGURE 4. FIGURE 5. ANNUAL REVENUES.. 4 ANNUAL RECYCLING 7 porterS 5 FORCES MODEL 9 SWOT ANALYSIS11 trace FACTORS OF SUCCESS.. 2 2 3 INTRODUCTION Ben &038 Jerrys is an forward-looking pull uper in the super premium crackpot flutter manufacture. The on the wholeiance blends a cargo to ho m ake use of all told natural, tall case glass thrash about with a load towards fond activism and surroundingsal off meth. This report exit disassemble both(prenominal) the keep companions environsal scheme and ordinary collective remains in line of battle to shine out the consistencies and disparities (if some(prenominal)) surrounded by these strategies and to determine whether a commonality high society such as Ben &038 Jerrys support sustain a agonistical emolument.We depart to a fault discuss the likely pertains on the caller-outs strategicalal vision in light of the unused- grant learnedness by Unilever. Our analysis get outing focus on examining the potencys and weaknesses of the environmental and prevalent corporal strategies in light of its interior(a) resources and foreign touch onrous and non- marketplace forces. MARKET DESCRIPTION Ben &038 Jerrys operates in the highly hawkish super premium nut case puzzle out, rooted(p ) yogurt and methamphetamine clientele.Super premium folderol bat is usually characterized by a greater richness and density than in the raw(prenominal) kinds of grump bat and postulates a comparatively higher(prenominal) legal injury. The caller-outs cardinal uncreated competitors include Haagen-Dazs (a member of the frappe Cream Partners organization) and Dreyers Grand applesauce Cream Company, which introduced its Godiva and Dreamery super premium churl toss line in the give of 1999. early(a) signifi fag endt competitors include puff up-pre comed Cho churl, Nestle and Starbucks (SEC Report, 1999). FIRM DESCRIPTION Ben &038 Jerrys Homemake, Inc. the Vermont- ground manufacturer of super-premium meth cream, frosty yogurt and sorbet, was founded in 1978 in a renovated gas shoes in Burlington, Vermont, by childhood friends Ben Cohen and Jerry Green domain of a function with a downhearted $12,000 investment. The beau monde is now a leading nut case crea m manufacturing bon ton know world gigantic for its in advance(p) flavors and all-natural members do from fresh Vermont milk and cream (www. benjerry. com). Manufacturing of all Ben &038 Jerrys nipping dessert merchandises occurs in the comm unitys third plants hardened in Vermont.The community divvy ups ice cream, low-t geniusd expatiate ice cream, frozen yogurt, sorbet and novelty harvest-feasts landwide as head as in selected foreign countries in supermarkets, food point of intersection stores, convenience stores, franchised Ben &038 Jerrys suck up shops, restaurants and an a nonher(prenominal)(prenominal)wise venues. Outside of Vermont, the carrefours ar distri yeted in the main by dint of Dreyers and other main(a) regional ice cream distributors. Unilever, a trans subject food and personal products come with latterly acquired Ben &038 Jerrys in spring 2000. The Ben &038 Jerrys climb on of managers approved Unilevers wisecrack of $43. 60 per cons tituent for all of the 8. million outstanding shargons, valuing the proceeding at $326 million (www. lib. benjerry. com, October, 2000). Under the legal injury of the accordance, Ben &038 Jerrys will operate separately from Unilevers period U. S. ice cream condescension. thither will be an independent 4 tabular array of Directors, which will focus on providing attractors for Ben &038 Jerrys neighborly representation and deformity integrity. both co-fo on a lower floors will continue to be twisty with Ben &038 Jerrys, and the smart telephoner will continue to be Vermont-based. THE MISSION STATEMENT Ben &038 Jerrys select a three-part accusation argumentation formalizing the troupes commerce philosophy.According to the beau mondes home page (www. benjerry. com), the cathexis statement is as follows intersection flush to make, distribute and sell the finest musical note all-natural ice cream and related products in a wide variety of modern flavors make from Verm ont dairy farm farm farm farm products. sociable Mission to operate the participation in a agency that actively recognizes the central role that stage bank line plays in the structure of society by initiating advanced(a) ways to improve the persona of demeanor of a broad community topical anesthetic, national, and international.Economic Mission to operate the community on a sound monetary basis of moneymaking result, tack magnitude value to our sh argonholders and creating c atomic number 18er opportunities and fiscal rewards for our employees. Underlying this mission is the determination to savvy innovative ways of addressing all three components, while holding a abstr use session respect for employees and the community at medium-large. ecumenical CORPORATE STRATEGY Ben &038 Jerrys bodily outline strives to implement the three conflated missions nock forth above dampening a high- attribute product, achieving scotch growth and profitability, and incor porating societal activism.The habitual incarnate dodge tooshieister be characterized as a foc applyd or market niche scheme based primarily on product specialization and quality occupation. Although foc ingestiond speciality strategies target a narrow buyer segment, this dodging helps Ben &038 Jerrys take in a warm emulous service as it washstand offer consumers something they perceive is appealingly different from equalise competitorsinnovative super-premium ice cream flavors that taste bring out and consist of all natural, high quality ingredients.In addition to differentiating its product from other ice cream competitors, Ben &038 Jerrys general strategy combines some(prenominal) other appoint components, including fostering a beau monde prototype of brotherly activism, creating instigant inscription, franchising the go with to service economic growth, and dieing creative worldize campaigns. Product specialty One gist of get throughing a matched a dvantage is by the use of a differentiation strategy to can a better product that buyers believe is worth the premium price (Thompson and Strickland, 1998).Since higher quality ice cream generally cost to a greater extent than than the sparing and regular types of ice cream, Ben and Jerrys has integrate product differentiation in its general incorporated strategy in smart set to command a higher price. The use of all-natural, high quality 5 ingredients and the innovative flavors of Ben &038 Jerrys ice cream instances the strategic use of product differentiation to gain a agonistical advantage in the ice cream market.Quirky flavor names such as Chubby Hubby, wavy Gravy, Phish Food, and Chunky Mon winder too set Ben &038 Jerrys apart from the traditionally-named ice cream products of jibe companies. Further to a greater extent than, the use of recycled materials and dioxin-free (unbl each(prenominal)ed) paper in product publicity pass ons to the uniqueness of Ben &038 Jerrys ice cream and helps keep its costs down. Socially-Conscious Company Image Ben &038 Jerrys strives to be an independent, mixerly-conscious Vermont social club that supports local dairy farmers.Several examples illustrate how Ben &038 Jerrys implements this corporate strategy. For instance, the order donates 7. 5% of pretax profits to philanthropic suffers by means of the Ben &038 Jerrys Foundation, community action teams, and through corporate grants (http//www. ho everywheres. com). The caller besides donates free ice cream during public events and community celebrations in the Vermont ara, and contributes a percentage of the profits realise from ice cream sold in Vermont retail stores to fund local charities (SEC Report, 1999).Furtherto a greater extent, the union has experienced the long-term viability of its own key suppliers, the Vermont dairy farmers, by executing a strategic decision to pay more than a specified minimum price for its dairy ingredients (SEC Re port, 1999). Brand subjection adopting disgrace loyalty is another strategic guide to strengthen competitive advantage. Ben &038 Jerrys has made substantial efforts to gain a social repute and send off with buyers through its frequent promotional campaigns (i. e. , Free Cone Day), donations to social causes (i. , Ben &038 Jerry Foundation), and the use of eco-friendly products, as discussed below under environmental Strategy. This strategy has proven roaring the 1999 Harris Interactive Poll regarding buyer science of corporate reputability ranked Ben &038 Jerrys first in the social certificate of indebtedness category and fifth all oerall (SEC Report, 1999). little Growth and Franchising The economic mission of the play along (to achieve profitability, augment value to sh arholders and exit cargoner opportunities) is implemented through Ben &038 Jerrys strategy for small-scale note growth.Ben &038 Jerrys has maximized profitability by initially outset small and slo wly building an ice-cream business everyplace time (Spolsky, 2000). Ultimately, the victory at the small-scale required the company to break of exercise its corporate strategy toward the establishment of some(prenominal) franchised guck shops throughout the nation and Europe. As of 1999, at that place were around 164 scoop shops in northwards America (SEC, 1999). These scoop shops serve as a major(ip)(ip) employment resource and a source of gross for non-profit groups.In addition, Ben &038 Jerrys gains a competitive advantage through franchising by broadening market sh be, change magnitude tax and publicizing the companys grade name exploitation negligible amounts of startup capital. As shown in mannequin 1, Ben &038 Jerrys has achieved substantial, yet gradual, growth in revenues since 1993. Marketing Strategy According to the Securities fill in Commission (SEC) annual report, Ben &038 Jerrys use of natural ingredients, high product quality, bimestrial introduct ion of parvenue flavors, focus on grass- 6 roots community thing and the down home local envision ar essential elements of the companys market strategy.The companys Waterbury ice cream factory is the unmarried virtually popular tourist pull inion in Vermont. In addition, the company is well known for its creative television advertizement and public relations campaigns. The use of innovative online marketing and web-based promotions with Yahoo have upgrade punctuate this image and strengthened brand name recognition (SEC Report, 1999). Ben &038 Jerrys Annual taxation 1993-1998 225 $ (in millions) 200 175 150 one hundred twenty- flipper 1993 1994 1995 1996 1997 1998 Year conformation 1. Annual gross for Ben &038 Jerrys 1993 to 1998. Source Ben &038 Jerrys 1998 wrap up Report.CORPORATE ENVIRONMENTAL STRATEGY In 1992, Ben &038 Jerrys became the first publicly held company to take in the wrap (Coalition for Environmentally Responsible Economies) principles as part of it s environmental strategy (Ben &038 Jerrys 1998 CERES Report). CERES is a non-profit concretion of put downtain groups croping in partnership with companies towards the remainder of corporate environmental responsibility worldwide. This involvement with CERES is evidence of the companys dedication to protecting the environment and insurance that consideration is made to the environment when managing and operational its business.The CERES principles atomic number 18 as follows Protection of the Biosphere 7 Sustainable wasting disease of lifelike Resources Reduction and Disposal of ragings zip fastener Conservation Risk Reduction secure Products and Services Environmental Restoration earth Outreach and Education Management Commitment Audits and Reports Ben &038 Jerrys believes that businesses should be among the loss leaders in the social change necessary to repair and impede the damage that the gentlemans gentleman race is up to(p) of inflicting upon natural cycles through everyday corporate, national, international, local and personal practices (ibid).By integrating the CERES principles into the companys everywhereall intents, Ben &038 Jerrys strives to develop a comprehensive environmental strategy that conforms to its mission of making an exemplary product, earning a fair return, and serving its community. Ben &038 Jerrys environmental goals as a company are to minimize its dis pull up stakes impacts on the environment, arouse sustainable farming and safe methods of food production that get down environmental degradation, and use its business as a speciality for environmental and social change.In revise to live up to this strategy thither are legion(predicate) policies and activities that the company is executing, or has plans to execute in the near future. By analyzing Ben &038 Jerrys environmental strategy inside the framework of the regulation Strategy-Implementing Tasks, as outlined in Chapter 9 of Crafting and Impleme nting Strategy (Thompson and Strickland, 1998), we can in effect consider the steps the company is taking to opera hat achieve its goals. These actions are visible in all aspects of the company and are deduction of the companys commitment to its environmental strategy. in that location is an ever-present culture within Ben &038 Jerrys of environmental consciousness and interest in company unfledgeding. In implementing its strategy, Ben &038 Jerrys has worked to ensure that every employee is involved and that value are shared throughout the company. Within the solicitude structure of the company, efforts are made to make sure that the Board of Directors and chief executive officer are fully informed about pertinent environmental issues and are fully liable for environmental insurance policy. In addition, the company considers demo environmental commitments when selecting Board members.As the founders, Ben Cohen and Jerry Greenfield continue to provide industrial-strength environmental leadership that is pivotal to effective capital punishment of the companys environmental strategy. There is profound talks within the chain of command of the company. At each manufacturing site in Vermont in that location is an Environmental Coordinator who is in charge of operating and monitoring environmental activities. These coordinators correspond with the carriage of Natural Resource physical exercise on a monthly basis. Through this dialogue, nvironmental strategies for company-wide and site-specific conformism and operations are made. The autobus of Natural Resource Use reports to the Senior Director of Operations who in turn reports to the CEO (ibid). This flow of knowledge ensures that every decision-maker is aware of environmental issues and considers these factors when running the business. 8 There is also a significant employee environmental awareness and education campaign within the company. Programs such as the company-wide Environmental awar eness Week promotes employee knowledge of environmental issues.During orientation, new employees are introduced to the environmental policies of the company by the Manager of Natural Resource Use (ibid). In addition, there are employee-led groups called Green Teams that work on company-related projects like recycling, composting, and writing eco-facts for the company newspaper (ibid). This activism and knowledge-share that is built into the company ne devilrk contributes to the supremacy of its environmental strategy by enabling company personnel office to better carry out their strategic roles.In addition to this internal communication, the company also uses various(a) strategies to build public interest and awareness in environmental issues. This succeeds in not only promoting the goals of the company, but also in adding to the competitive advantage of the company by gaining public support and loyalty. Ben &038 Jerrys website has a plethora of selective information on its env ironmental policies, activities, and accomplishments. The importance that the company places on these issues is shown by the fact that some of this information is highlighted on the home page (www. benjerry. om, 2000). Other tools the company uses for disseminating information to the public are the publications of the Annual Report and CERES Report, as well as lieu text file on dioxin and rBGH at their scoop shops. In addition, the company puts on an annual festival encouraging public awareness of environmental and social issues (CERES Report, 1998). In order to be triple-crown in implementing its environmental strategy, Ben &038 Jerrys has realised some(prenominal) strategy-supportive policies company-wide. These are expound in the companys 1998 CERES Report. These policies apply to all U. S. ocations and international locations under the companys direct ownership. The Manager of Natural Resource Use unceasingly updates them whenever new technologies, concerns, or standards emerge. Examples of these include bloodline in 1997, all uncontaminated botch oils from its plants are re-refined by a qualified handler to be employd. In 1994 the company created a list of approved environmentally friendly cleaning and office supplies that is continually updated when appropriate. Scoop shops are built with environmentally sound material, such as tiles and countertops made of recycled materials.The Contractors Handbook contains environmental requirements for all out-of-door parties working at Ben &038 Jerrys sites. Another area that is of the essence(p) to ensure that environmental strategies are achieved is in the allocation of resources to strategy-critical activities and the institution of best practices for unvarying improvement. The company puts a lot of get-up-and-go into exploring opportunities for countervail reduction, recycling, and zipper use. In addition, the company tracks the cost and impacts of all wild and zip use associated with the production process.Using a system of integrated environmental tracking tables the company reports on solid, barbarian, wastewater, and dairy waste production, energy use, and recycling. This information is used to identify trends and set 9 goals. As a result of this work the company has demonstrated continual improvement in its solid-waste recycling, rising from 35% in 1995 to 53% in 1998. visualise 2 shows the amount of waste the company has recycled between 1995 and 1998. In 1998, a forwarding Innovation Group was created with a goal diminution waste from ingredient promotional material (ibid. ).In 1997, the company conducted a project to develop a pint container that would be more environmentally sustainable and compostable. The company invested hundreds of man-hours to analyze sources of chlorine-free paper for their Eco-Pint (ibid. ). The release of this product is in direct line with the companys environmental strategy and presents a major step forward in its goal to deve lop a compostable, non-toxic container. Annual cycle at Ben &038 Jerrys Tons of full-blooded Waste 1000 800 600 400 200 0 1995 1996 Year 1997 1998 Figure 2. Annual Solid Waste Recycling at Ben &038 Jerrys between 1995 and 1998.Source Ben &038 Jerrys 1998 CERES Report. Ben &038 Jerrys realizes the importance of community participation and accountability. conformable with its environmental strategy, Ben &038 Jerrys uses its business as a means of promoting environmentalism, small-scale agriculture, human rights, and economic justice. This is achieved through Corporate fine-looking to organizations like Natural Resources Defense Council and the Vermont discharge Trust, the establishment of the Ben &038 Jerrys Foundation which cash non-profit social and environmental organizations across the linked States, and Community Actions Teams.These teams are made up of Ben &038 Jerrys employees who organize annual major community projects in their area and provide grants to various commun ity-based organizations. All told, Ben &038 Jerrys donates approximately 7. 5% of its pre-tax profits annually (ibid. ). 10 Another means by which the company seeks to achieve its environmental strategy is through management of its sum chain. Ben &038 Jerrys is systematically working to purchase ingredients and other inputs from environmentally and socially trusty sources. The company has a Vendor Certification Program in which 80% of its suppliers were enrolled by the end of 1998 (ibid. . As part of the assessment process, Ben &038 Jerrys pass judgments the environmental competencies of potential difference suppliers and considers this information when determining whether or not to do business. In addition, Ben &038 Jerrys only purchases dairy supplies from family farmers who pledge not to treat their cows with rBGH, because of the adverse do it has on sustainable agriculture (ibid. ). By working with its suppliers, Ben &038 Jerrys attempts to ensure that its environmental go als are shared throughout its supply chain. This leads to a more effective implementation of its everywhereall strategy.STRATEGY ANALYSIS An analysis of the outdoor(a) and internal forces shaping the ice cream effort is necessary in order to determine the effectiveness of Ben &038 Jerrys legitimate (and prospective) corporate and environmental strategies. We will utilise several analytical tools to characterize the strengths and liabilities of the intentness and the effectiveness of the companys strategy, curiously through the use of the quint Forces homunculus of Competition, the Sixth (Non-Market) Force analysis, SWOT analysis, and the key factors of winner.Five Forces panachel of Competition In order to identify and assess the strength of impertinent competitive forces on the ice cream industry we utilized a common analytical tool, Porters Five Forces Model of Competition, which is based on the future(a) five factors rivalry among competing sellers, bargaining office staff of buyers, bargaining power of suppliers of key inputs, change products and potential new entrants to the market (Thomas and Strickland, 1995). Figure 3 summarizes the competitive strength of these forces on the ice cream industry.Rivalry Among Competing Sellers The principal competitors in the super-premium ice cream industry are large, diversified companies with significantly greater resources than Ben &038 Jerrys the primary competitors include Dreyers and Haagen-Dazs. Rivalry can be characterized as intense, tending(p) that legion(predicate) competitors exist, the cost of sack to rival brands is low, and the sales-increasing simulated military operation employed by Dreyers and other rivals jeopardizes to boosts rivals unit volume of production (SEC Report, 1999). emptors The power of buyers is comparatively high because buyers are large, consisting of individual customers, grocery stores, convenience stores, and restaurants nationwide and spherically. Since retaile rs purchase ice cream products in large quantities, this gives buyers substantial leve vexation over price. In addition, there are many ice cream products to choose from, so the buyers cost of switching to competing brands is relatively low. In order to keep going against this competitive force, a companys strategy must include strong product differentiation so that buyers are less(prenominal) able to switch over without incurring large costs. 1 Suppliers The suppliers to the ice cream industry include dairy farmers, paper container manufacturers, and suppliers of various flavorings. Such suppliers are a moderate competitive force, given that the ice cream industry they are supplying is a major customer, there are multiple suppliers throughout the nation to choose from, and many of the suppliers viability is tied to the eudaemonia of large, launch companies such as Dreyers and Haagen-Dazs. Therefore, the ice cream suppliers have moderate leverage to bargain over price. ministrati on Products Many substitute(a)s products are available within the dessert and frozen food industry (cookies, pies, Popsicles, cake). The ease with which buyers can switch to substitute products is an indicator of the strength of this competitive force. Since substitute products are right away available and attractively priced compared to the relatively higher priced super-premium ice cream products, the competitive pressures constitute by substitute products are intense. Companies that enter the super-premium market, therefore, must adopt defensive strategies that change over buyers their higher priced product has better features (i. . , quality, taste, innovative flavors) that more than make up for the discrimination in price. capability New Entrants The barriers to insertion within the ice cream industry are moderate collect to the brand preferences and customer loyalty toward the larger and more found rival companies. Other obstacles to new entrants include strong brand loyalty to established loadeds and economic factors, such as the requirement for large sources of capital, specialized concoction facilities and manufacturing plants.In addition, the plan of attackibility of scattering channels can be difficult for an unknown firm with little or no brand recognition. Although Ben Cohen and Jerry Greenfield successfully launched their ice cream business from a gas station with modest funding and staff, they had to initially rely on a rival companys distribution channels (and later on independent distributors) in order to gain a stronger foothold in the market. Figure 3. Porters Model of the Five Competitive Forces S ubstituteProducts Many S ubstitute sBuye rs S trong le rage ve Largenum rs be Rivalry Among Competing Sellers Many large established rivals S upplie rs Mode le rage rate ve Ne Entrants w Mode Barrie to rate rs Entry 12 As discussed above, several competitive forces on the ice cream industry are relatively strong, suggesting that it is a difficult industry to be competitive in. However, Ben &038 Jerrys implementation of a differentiation strategy has helped the company in effect defend against these forces and gain a competitive advantage.The use of higher quality ingredients and ecofriendly incase has created a unique brand image that helps develop brand loyalty and rhythm method of birth engage rival competitors to the market. The companys social activism toward the community and use of innovative flavors also help insulate the firm from the strong bargaining power of buyers since rival firms and/or products are relatively less attractive. Similarly, Ben &038 Jerrys product differentiation strategy also allows the company to fend off threats of substitute products that dont have corresponding features.The companys differentiation strategy also mitigates the threat of potential entrants collectable to high buyer loyalty for a pucka product. The moderate threat be by suppliers is tackled by two other facets of the companys strategy ensuring the viability of suppliers by paying premium prices for raw materials, and redesigning the distribution network to gain more control and reduce reliance on rival distribution channels. The Sixth Force (Non-Market Forces) exertion Regulations Ben &038 Jerrys is subject to regulation by the United States Food and Drug political science (FDA) and the Vermont Department of Agriculture.In response to stringent labeling criteria for healthoriented foods, the company made changes in its labeling regarding its low fat/low cholesterol products (SEC Report, 1999). FDA regulations may potentially affect the ability of the company, as well as rival firms in the ice cream industry, to develop and market new frozen dessert products. However, given that Ben &038 Jerrys is already in respectfulness with the FDA, it is unbelievable that such regulations will have a significant impact on the companys operations.Other regulative forces include potential RCRA li ability due to the companys generation of hazardous materials during the manufacturing process. However, Ben &038 Jerrys is shortly exempt from these hazardous materials regulations since the level of hazardous materials generated is below the threshold for requiring a allow for indeed, by staying small and bearing regulatory compliance, the company gains a competitive advantage over larger companies that may have to meet stricter regulations or be more temptable to non-compliance.Public and Stakeholders Public and stakeholder concerns over health and food and environmental pollution exert a strong force on the ice cream industry. The heightened consumer awareness and demand for low-cholesterol or low-fat foods can force companies to respond with ingredient substitutions and differentiated product lines to stay in business. Similarly, the increasing consumer trend toward supporting eco-friendly product packaging and all-natural, extreme ingredients can cause ice cream companies to revise their strategies.Ben &038 Jerrys, with its commitment to providing all natural ingredients, a low-fat ice cream line, and chlorine-free paper for example, is in a better position to attract those consumers who are willing to pay more to get more. Given Ben &038 Jerrys proactive strategic approach, the company can effectively insulate itself from these public pressures and enjoys a significant competitive advantage over those companies that rule out incorporating socially progressive or eco-friendly value into their strategies. 13SWOT Analysis Another means of analyzing the strategies of the company is by examining the strengths and weaknesses of its internal resources, and then exploring the away threats and opportunities facing the company. By developing a clear understanding of these factors, we can evaluate where the company should go from here. Figure 4 identifies these forces for both the general corporate and environmental strategies of Ben &038 Jerrys. ground on our analysis, we heart that frequently of the companys internal strengths and external opportunities lie within its environmental strategy.This gives just evidence to suggest that the environmental and corporate strategies are well integrated, and that this integration is of import to the future success of the company. Figure 4. SWOT Analysis of Ben &038 Jerrys Strengths Product Differentiation Brand Name &038 Image fanciful Advertising &038 Promotion Innovation Environmental Leader Threats Image Deterioration change magnitude Competition Shift in Buyer Preferences Loss of Sales to Substitutes Bush governing body Conflicts with Unilever Weaknesses Dependence on Outside distribution High Cost Financial derangement Geographic L phonysOpportunities Growing Consumer Environmental elicit Geographic Expansion Market variegation Alliances Key Success Factors A successful strategy incorporates the companys efforts to be competent on all of the industrys key success factors and t o exceed on at least one factor (Thompson and Strickland, 1998). In the highly competitive super-premium ice cream industry, the key factors of success include product 14 differentiation, a strong distribution network, brand loyalty and clever ad.As shown in Figure 5, Ben &038 Jerrys excels in these (and other) key factors, and has a detail expertise on product differentiation to gain a competitive advantage. Product Differentiation All-natural ingredients Innovative flavors High quality Brand Loyalty Favorable reputation with environmentally-aware consumers Access to Distribution Network use of independent suppliers and existing channels Social Activism Corporate philanthropy Ben &038 Jerrys investment firm Eco-friendly Product Dioxin-free pint containers Recycled materials Hormone-free dairy supplyClever advertising Free ice cream samples basic and local image Figure 5. Ben &038 Jerrys Key Factors of Success. STRATEGIC CONSISTENCIES According to the Ben &038 Jerrys Mission St atement, the goal of the company is to integrate product quality with economic success and social responsibility. One of the key strategic factors that successfully links these three missions in concert is the differentiation strategy. In this respect, the environmental and general corporate strategies are very much in tune with each other.Differentiation not only increases the competitive advantage of Ben &038 Jerrys, but it also leads to environmental excellence in the operation of the company. By focusing its oversight and energy on recycling, energy efficiency, and product variation, Ben &038 Jerrys can reduce its impact on the environment while at the same time reducing product cost. This is being achieved through the work of the promotional material Information Group that focuses on reducing the incoming packaging which adds to the waste stream, and the production of the compostable Eco-Pint. These and other actions help build a competitive advantage within the market.By u sing allnatural, rBGH-free ingredients and dioxin-free containers, Ben &038 Jerrys can also attract environmentally minded consumers to its products, consequently increasing market share. At the same time, this practice helps protect the environment and support family-farming and sustainable agriculture. Therefore, this differentiation strategy has the versatility of providing a better product that can attract customers, command a higher price, and protect the environment, hence satisfying the three integral move of the companys mission and both the corporate and environmental strategies.In order for this environmental differentiation strategy to be sustainable there needfully to be a willingness among customers to pay for environmental quality, credible information about the companys environmental attributes, and insulation against imitation. The companys blotto 15 growth in revenue over the last few years shows that the customer base is there and that they are more than will ing to pay a premium price for a superior quality product. Ben &038 Jerrys addresses the latter two issues through its informative website, external audits, and regular innovation creating unique, hard to imitate flavors and products.Another way in which the environmental strategy and corporate strategy are consistent with each other is in the area of regulatory compliance. As a result of the attention Ben &038 Jerrys pays to the environmental risks associated with its production process, and the efforts made by the company to ensure that negative impacts to the environment from its business operations are minimized, Ben &038 Jerrys has had very few compliance issues and has never been issued any penalties by federal regulators (1998 CERES Report). In addition to the environmental benefit from such compliance, there is a beneficial impact on the business as well.By minimizing operational costs, the company gains a potential competitive advantage over competitors with less stringe nt environmental controls that may face compliance issues. Overall, the companys environmental strategy and general business strategy are well integrated. By focusing on differentiation, which is in large part due to environmental policies and programs, the company gains a competitive advantage over its rivals. As the company grows and increases its annual profits, more money can therefore be donated to social and environmental causes through its various giving channels.Ben &038 Jerrys has positioned itself so that its success is highly dependent on its environmental image, therefore the two strategies are close linked. There are, however, some disconnects between strategies. There are a few instances where environmental goals take a back rump to company profits. Examples of these disconnects are described in the next section below. DISCONNECTS BETWEEN STRATEGIES Although the mission of the company is to temper economic growth with environmental responsibility, during our research we discovered several ccasions in which company profits clear outweighed the desire to be as environmentally proactive as possible. For example, Ben and Jerrys shortly packages its Peace Pops inside a tractile wrapper and paper board box. This change was in response to a intuitive feeling that sales had been declining due to customer dislike of its original packaging, which consisted solely of a fictile wrapper. This change has led to an increase of packaging materials by 152,000 pounds annually (ibid. ).This is in direct conflict with the companys policy on waste reduction and illustrates the priority given to company profits over environmental concerns. Similarly, an effort to introduce an organic line of desserts, which would have been more in line with its environmental strategy, was abandoned due to economic costs. Another example of a disconnect is in the companys energy use. Ben &038 Jerrys recognizes that its operation, like any industrial process, is energy intensive. However, as of 1998, the company had no formal policy on energy use and conservation (ibid. ). time the plants and scoop shops make attempts to be energy efficient, the company relies on non-renewable sources of energy for its production processes, sooner of using green energy that would be less damaging 16 and more consistent with its environmental policies. Although not expressly stated, it seems that economic cost is once again superseding sustainability. While Ben &038 Jerrys works to reuse and recycle as much of its waste as possible, it is the policy of the company to send any hazardous waste that cannot be recycled to a hazardous waste incinerator to be handled.Although this may be the roughly scotch method of treating hazardous waste, it is not needfully the most environmentally sound governance technology, and directly contradicts the companys environmental goals. In keeping with the corporate strategy of maintaining a local, down home image, many sacrifices to the env ironmental strategy are made. The most glaring disconnect is in the national distribution of the product from a single state. Manufacturing in Vermont requires extensive shipping of its products this is a highly energy-intensive process.In 1998, emissions from the distribution of its products totaled over 113,000 pounds for speed of light monoxide, 15,000 pounds of nitrogen oxides, 7,000 pounds of hydrocarbons, 1,600 tons of carbon dioxide, and 400 pounds of particulate matter (ibid. ). This trade-off illustrates an inherent inconsistency between the corporate and environmental strategies of the company. While these disconnects do occur, we feel that Ben &038 Jerrys has done an excellent telephone circuit in integrating its business and environmental strategies and balancing profitability with environmental protection.UNILEVER ACQUISITION AND IMPACTS ON STRATEGY Ben &038 Jerrys strategy will likely shift towards larger-scale economic growth in response to the new-fashioned Unile ver acquisition of the company in April 2000. Ben &038 Jerrys emphasized that this acquisition will allow the company to create an even more dynamic, socially positive ice cream business with global reach (www. lib. benjerry. com). In addition, the financial backing of a larger and established company will strengthen Ben &038 Jerrys competitive advantage with respect to the five forces, particularly the threat of competition from rival firms.According to the cofounders, neither of us could have anticipated, twenty years ago, that a major multinational would some day sign on, enthusiastically, to go later and expand the social mission that continues to be an essential part of Ben &038 Jerrys and a driveway force behind our many successes. scarcely today, Unilever has done just that. While we and others for certain would have preferred to pursue our mission as an independent enterprise, we take to that, as part of Unilever, Ben &038 Jerrys will continue to expand its role in s ociety (ibid).The agreement between Unilever and Ben &038 Jerrys ensures that the latest social mission of Ben &038 Jerrys will be support and well-funded, which will lead to improved procedure in this area and an opportunity has been offered for Ben &038 Jerrys to contribute to Unilevers social practices worldwide. According to Richard Goldstein, President of Unilever Foods of North America, Unilever feels that Ben &038 Jerrys has a significant opportunity outside of the United States. Unilever is in an ideal position to bring the Ben &038 Jerrys brand, values and socially responsible message to consumers worldwide.Much of the success of the Ben &038 Jerrys brand is based on its connections to basic human values, and it is our hope and expectation that Ben &038 Jerrys continues to engage in these critical, global economic and social missions (ibid). Based on the nature of this agreement, Unilever is pledging to uphold Ben &038 Jerrys mission of 17 integrating product quality wit h economic performance and social responsibility. Therefore, we do not expect that Ben &038 Jerrys environmental strategy will change, except that more innovations can possibly be made with the augmented financial and human resources.In addition, the social and environmental mission of the company will have the opportunity to be apply on a more global scale. As far as the saving of the companys corporate strategy, Unilevers global presence and greater access to distribution channels will allow for Ben &038 Jerrys to continue to expand inter nationally, thus increasing market share, profitability, and competitive advantage. Potential threat to Ben &038 Jerrys success as a result of the Unilever acquisition are the negative public perception of the company (i. e. elling out), loss of consumer support and brand loyalty. This can be mitigated through marketing strategies geared towards alleviating public fears and ensuring that the underlying goals and policies of the company will rem ain intact. RECOMMENDATIONS &038 CONCLUSION Based on our analysis, we believe that the corporate and environmental strategies are appropriate and well integrated. While there are some disconnects between the two strategies, overall it is clear that the company strives to achieve economic success and environmental responsibility.Up to now, Ben &038 Jerrys has been successful at maintaining this balance. The primary concern is how well the company can insulate itself from future competition that could threaten its position as a leader in the super premium frozen dessert industry. In light of the threats set in the SWOT analysis, we recommend that Ben &038 Jerrys implement the following suggestions Protect its public image in light of the recent acquisition by Unilever by maintaining its current position as a market-leader in environmentally and socially responsible business practices. remain cost-cutting efforts through implementation of further waste reduction, energy conserv ation, and recycling programs. Draft a formal written policy on energy use. Frequent product innovation and diversification to address threats of substitute and imitation products and meet changing consumer preferences (i. e. lactose-free ice cream, all organic line of frozen desserts, cookies) Continue franchising scoop shops to increase its market reach and withstand growing competition, both nationally and internationally.As the company grows, there will be greater waste generation and distribution-related emissions increase the development of cleaner manufacturing, disposal, and distribution technologies to ensure that the company continues to stay in compliance. Develop additional manufacturing plants and distribution centers outside of Vermont to reduce distribution costs, cut down on distribution-related emissions, and increase production volume of the company. If George W.Bush becomes President, there could be a relaxation of environmental regulations and attitudes, thus le veling the playing field and eroding Ben &038 Jerrys competitive advantage over firms that may be less environmentally responsible. The 18 company needs to continue to focus on its differentiation strategy to retain its edge and reinforce customer loyalty and support. Continue to work with Unilever to ensure that Ben &038 Jerrys remains an independent subsidiary with its social and environmental values firmly in place. Protect itself from acculturation into the multinational corporate identity.In conclusion, our analysis has illustrated that a company can be competitive without sacrificing its environmental goals and strategies. Through differentiation, Ben &038 Jerrys has established itself as both a leader in product quality and environmental responsibility. The challenge will be for Ben &038 Jerrys, after being acquired by a multinational conglomerate, to demonstrate that it is still possible to maintain its uniqueness and proactive environmental strategy. So can Ben &038 Jerry s continue to serve up a double scoop of being green and making green?Stay tuned for the next flavor of the month. 19 BIBLIOGRAPHY Ben &038 Jerrys 1998 CERES Environmental Report, 1998. Securities and transfer Commission Annual Report for Ben &038 Jerrys Homemade, Inc. Form 10-K, 1999. Spolsky, Joel, How to Grow a Business, http//www. fool. com, rarified 4, 2000. Thompson, Arthur A. Jr. , Strickland, III, A. J. Crafting and Implementing Strategy, Text and Readings, 10th edition. Irwin McGraw-Hill, 1998. www. hoovers. com www. benjerry. com www. lib. benjerry. com Substitute Products Many S ubstitute s 20