Ice-Fili “A storied market leader facing competitive pressures” To: Senior Management, Ice-Fili February 12, 2012 Current Situation Ice-Fili was able to maintain its leading position in the Russian ice cream industry during volatile times. However, it now faces even tougher challenges that threaten its future prospects: reduction in ice-cream consumption, emergence of cost-efficient regional players, and the lack of a quality distribution system. After analyzing the situation, we recommend a strategy that aims to grow sales through the earning of market share, and improving the distribution network. Porter’s Five Forces’ Model Industry Rivalry Industry rivalry is high. The ice-cream industry is fragmented; 300 producers …show more content…
To succeed in this strategy, Ice-Fili needs to do two things. First, it needs to broadcast its commitment to follow the legacy of the traditional Russian ice cream makers and inspire consumers to cherish and value traditional Russian ice cream making method, thus creating stronger brand equity. Second, Ice-Fili needs to restructure its current distribution system. Nestle already has its products twice as available as Ice-Fili. Summation of Key Problems 1) Competition: Baskin & Robbins and Haagen-Dazs have already become incumbents in the premium ice cream space. Regional players have a big cost advantage so a price war or a move into a low cost strategy would be difficult. 2) Distribution: Ice-Fili’s products have fairly limited availability. Distribution was also highlighted as a factor for the failure of other players in the Russian ice-cream market Reccomendation Possible Strategies The main goal of our recommendation is to stop the decline of Ice-Fili’s return on equity which has fallen from 27.3% in 1996 to 14.4% in 2001 (Figure 1, Appendix). We will look to do this through a combination of sales growth and margin expansion. We outline several possible options, and choose one which looks to be the most optimal: 1) Focus on a low cost approach to grow sales 2) Focus on restaurants and café’s to improve
Consequently, this company can expand the fruit nectar production line to attract new consumers. The down-side to utilizing this structure is that the price at retail will be significantly higher than the other modes of distribution. However, since the target consumer is not sensitive to price and have high disposable incomes, this should not pose a systemic problem for this firm.
Braum’s Incorporation is a vertically integrated company (owns multiple segments of industry and merges them together) which allows them to produce their products to the quality and standards they want. The corporation produces meat, dairy products, fruits, and vegetables. They have 280 stores located throughout Kansas, Texas, Missouri, Arkansas, and the majority located in Oklahoma, where their headquarters are (About Us 2016). The chains of stores located in these areas provide hamburgers, ice cream, and a small grocery store for their customers. Although Braum’s provides all of these commodities they’re mainly known for their ice cream.
Introduction From 1996 to 1998 Ice-Fili suffered from huge increases in costs that gradually ate at their margin at alarming rates. Even worse, from 1999 to 2001 they had a huge decrease in sales and got into liquidity problems. The economic situation for Fili seems to be doomed even more when you add growing and strong competitors to the mix. But what caused all this? In the following problem analyisis, we will discuss basically 4 categories of issues that Ice-Fili is undergoing:
We believe that Ice-Fili, to stop the decline in its market share, should focus on the market opportunities in the Russian ice cream market. The main opportunity seems to lie in consumers’ behavior. They only consider ice cream as an "on the go" snack. Ice-Fili should use all possible means to create a change in their way of consumption. It would be doubly useful as it would both increase ice cream sales in restaurants but also in supermarkets so that families eat them at home.
We at Temple Consulting have completed an analysis of Ice-Fili’s current corporate standing using data collected over the past several years. Using tools such as Porter’s Approach and SWOT we have analyzed the internal and external environments and have recommended several strategic plans of action. Current areas for improvement such as marketing initiatives and re-evaluation of distribution channels will increase sales and profitability almost instantly. Long term plans such as lobbying against luxury tax on ice cream, partnerships with franchise vendors, and bringing new products to the market, performing an IPO, and planning more global efforts will help keep Ice-Fili rooted as the
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (Eds.). (2011). Essentials of corporate finance (7th ed., Rev.). New York, NY: McGraw-Hill Irwin.
Ice-Fili is the top ice cream producer in Russia. Currently, the company is experiencing tough competition with Nestle, Baskin-Robbins and regional ice cream producers. Its loss in market share due to their poor quality decisions-making after Russia became an open marketing in 1992. Nestle took great advantage of Ice-Fili’s low reaction adjustment and is taking over their market.
Chobani is a greatly successful company based in New York, where their Founder Hamdi Ulukaya moved to when he came to the states from Turkey (Chobani History 2016). Chobani is a company known for having the best Greek yogurt in the United States. Chobani prides themselves on having a high quality yogurt that is incomparable with any other brand of yogurt out on the market. This dedication the quality is what sets Chobani above everybody else is directly causing their positive business growth. By the end of 2015 Chobani’s revenue was at “$1.5 billion where their competitors were at $250 million” (Giammona 2015). What differentiates Chobani between its competitors is its dedication to the quality and the fact that the Chobani Greek yogurt is healthier than that of Dannon and in any other competitors brings as they use all natural ingredients on where others may have antibiotics and other unhealthy byproducts in their yogurt which can be poorer for health of the consumer. With Chobani’s small staff of 2000 employees and their solo headquarters and different type of product manufacturing, Chobani makes a huge difference in less mechanical and robotic form of creating the yogurt that those of the competitor’s process to creating quality within the product. Companies such as Coca-Cola or Pepsi Co would want to buy a Chobani there has been no offers them product differentiation such as the purchases the Coca-Cola has made with Vitaminwater (Martin, Sorkin
Goals- Dippin’ Dots want to be able to expand where they can sell their product. Since retail locations can only offer the product at 10 to 20° below zero, special storage and serving freezers are required, as well as specially designed cryogenic transport containers in order to move the product. This as well as other factors have limited the distribution of Dippin’ Dots to only serve the away from home segment of the ice cream market, which accounts for $13.9 billion. If they can expand where they sell their product, they can increase sales and gain a large portion of the market.
The biggest leading market for Frozen Yogurt globally are US and Europe, with the US producing more than 50% of the sales in 2015. The marketing for this product in the US is so efficient and has recorded a big evolution over 25% between 2009 & 2014, “says Technavio. “this big increase might be advantaged to the rising number of the Frozen Yogurt franchises across the country and increasing demand from customers for a healthier alternative to ice cream. The storyline will stay the same the forecast period. However, the evolution rate will slow down as a result of the mature nature of the market. rising private equity investments will develop as a driving force for the growth of the market,” according to the study.
At the beginning, this market segment represents about 30% of the total potential sales. In the current years, there are few ice-cream produces on the markets that are designed for this segment, because of there are increasing group of consumer in this segment are more concerned and aware of the implications of diet on their health. Most of there consumers do not buy ice=cream as a consequence, such as they thought ice-cream have high calories and not good for
Contrary to Nestlé, Ice-Fili runs its business since ages. Therefore, the company is well-known by the Russian customers.
- Intense competition from various companies such as Lindt, Joseph Schmidt, Neuhaus, Godiva and other numerous but smaller European and domestic specialty companies
Ice-cream industry has started and sustained in Malaysia market for a long period of time. In recent years, several reports reveal that sales of ice-cream industry in Malaysia has increased and grown to be a major player in food and beverage industry. While there are many reasons behind this, the increment of citizens’ disposable income is considered as a principal cause. (Euromonitor International, 2016)
A few weeks ago I wanted ice cream but I didn't want to go to the store and buy an entire tub of ice cream I just wanted something like a banana split. The only problem is that belvidere has no ice cream places except Dairy Ripple and they close in the winter,so a thought occurred to me Belvidere needs a Dairy Queen. See Dairy Queen is something that lots of people like so this would make many people happy,and let’s be honest we all have one point in the winter when we want ice cream. Dairy queen has lots of food options,they are very popular and very clean, and they have good prices.