• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

For this PEST analysis I will be analyzing the ice cream and frozen dessert manufacturing industry (NAICS Code #311520) within the United States. POLITICAL

Extracts from this document...


PEST ANALYSIS For this PEST analysis I will be analyzing the ice cream and frozen dessert manufacturing industry (NAICS Code #311520) within the United States. POLITICAL Political factors can have a direct impact on the way business operates. Decisions made by the government affect our every day lives and can come in the form of policy or legislation. For the United States of America our government and nation is ran under a democracy. In this capitalistic, free market-oriented economy, corporations and other private firms make the vast majority of microeconomic decisions, and governments prefer to take a minimal role in the domestic economy. As a result, the U.S. has a small social safety net, and business firms in the U.S. face considerably less regulation than firms in many other nations (Wikipedia). Employee rights in the United States have a substantial effect on business. Although manufacturing ice cream and frozen desserts has changed over the years with new technology in automatic machinery, the industry is still labor intensive. Employee laws to consider are minimum wage, over time, benefits and health and safety regulations. "With the exception of Arizona, Louisiana, Mississippi, Alabama, Tennessee, and South Carolina all states have a minimum wage requirements. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments (DOL). Covered nonexempt workers are entitled to a minimum wage of not less than $5.15 an hour. Overtime pay at a rate of not less than one and one-half times their regular rates of pay is required after 40 hours of work in a workweek" (DOL). As well as minimum wage and over-time pay, employees are given the right to benefit plans. The ERISA, which is the Employee Retirement Income Security Act, sets uniform minimum standards to ensure that employee benefit plans are established and maintained in a fair and financially sound manner. ...read more.


Managerial know how also might be a barrier to entry. Such know-how as distribution tactics, marketing tactics, and production tactics are all skills that could potentially give huge cost advantages to the more experienced company. There is a considerable amount of knowledge needed to understanding the day to day basis of interactions with suppliers and customers, being innovative and creative, and how to manufacture high quality ice cream at a low price. THREAT OF RIVALY "Four major manufacturers hold 40% of the market: Unilever, Ice Cream Partners USA, Dreyers Ice Cream and Blue Bell Creameries. Market leader Unilever has some of the top brands in this market, including Good Humor-Breyers and Ben & Jerry's, but faces strong competition from second-ranked Dreyers, which acquired the Nestle USA line of ice cream products in June 2003 (Findarticles). Private label accounted for nearly 18% of sales, as supermarkets and mass merchandisers caught on to the value of ice cream sales. The remaining 40% of sales are from regional and local companies (Findarticles). Medium rivalry is strong due to a number of factors. Ben & Jerry's and Haagen-Dazs dominate the global super-premium ice cream market. Each of these competitors has approximately 42% of the market, with the remaining 15% being divided up between a number of smaller firms that compete on either a local or national basis (Findarticles). Overall, the threat of rivalry exists. On the national stage, it is lower because it is dominated by just four companies, but on the regional stage it is much higher. Supermarkets, mass merchandisers, local and regional companies account for 58 percent of sales in the ice cream industry. This leaves a huge opportunity for companies to develop their own brand of ice cream and put it on the shelf. Industry growth boomed between 1998 and 2003, growing nearly 25 percent. However, this growth rate is expected to slow down and grow almost 7 percent through 2008 (Findarticles). ...read more.


Ben and Jerry's network is mixed with a variety of buyers from nation wide retailers to local grocery stores. The diversification of sellers allows them to exploit their product across the country, and even the world which enables the final consumer easy access to their product. Easy access to their product is what helps them sell ice cream, and is what helps Ben and Jerry's be one of the best selling super premium ice creams in the market. This resource is of important value, it is rare, and it is costly to imitate and therefore is a sustainable competitive advantage. Another important resource is their Ben and Jerry's Scoop Shops. This is of great value to the firm and it provides sufficient distribution, visibility and availability to the end consumer. There are not too many grocery stores or supermarkets that sell only one brand of ice cream and only a number of top competitors own or franchise scoop shop stores of their own product. A huge part of the buying demographic, ages 18-24, would prefer to buy ice cream at scoop shops, which contributes to huge percentage of sales for the entire ice cream industry. Their franchised scoop shops are very important to the firm, they are rare, and they are costly to imitate. Therefore the Ben and Jerry's Scoop Shops are a sustained competitive advantage to the firm. Although the ice cream and frozen dessert industry has become very competitive with regional store brands, local brands, and the big nation wide brands, I still believe that Ben and Jerry's has a temporary competitive advantage. The company does a wonderful job in exploiting their resources and using their strengths to compete in this industry. They have done a great job in developing brand awareness and use their manufacturing as a resource to produce some of the best quality ice cream in the United States. Their franchised scoop shops combined with their diversified number of buyers has allowed them to reach every corner of the market and provide ample opportunity for the end consumer to purchase their ice cream. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Marketing section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Marketing essays

  1. This report is about a product (Carrot-Lite ice cream) that is to be introduced ...

    Around 4,000 dairy farmers located in Banduragoda, Hanguranketha and the coconut triangle directly supply fresh milk to Cargills Magic. At the Cargills Magic factory, the entire production process is automated with the high tech plant able to churn out as much as 3,200 litres of ice cream per hour.

  2. strategic analysis of walmart

    There is a wafer-thin profit margin which comes from bulk buying. Due to stagnation in US market, it is now a necessity for Wal-Mart to expand its business horizons. Growth Strategy In addition to its overall business strategy, Wal-Mart's growth strategy is strikingly different from most other big box retailers.

  1. KFC andthe Global Fast Food Industry (703).

    KFC's located in question mark category may be the stars that lost their market share position to competition or cash cows whose position was eroded by superior competitive products KFC's located in cash cow category moves out of the growth stage of the product life cycle, it no longer needs

  2. Marketing Analysis for Adrenaline Air Sports. The purpose of this report is to ...

    However, because there are very few competitors in the industry, the likelihood of new entrants is high because they are able to capitalize on a growing industry. Sunk Costs Sunk costs are costs that cannot be recovered once they have been incurred.

  1. Why do governments intervene in agricultural markets? Outline and compare the effects of price ...

    A subsidy is generally a monetary grant given to producers, and is used in markets where the market price is considered too low for farmers by the government.

  2. Dairy Industry

    Income: Rs. 25000/- and above Religion: every religion Geographic Segmentation: Consumption of garlic butter will be related with the geographic as well as economic conditions of a place. It will be demanded in every big city like Lahore, Karachi, Islamabad etc because the life of these cities is very fast

  1. Five forces analysis applied to the online auction industry.

    The increase in trust is extremely important for acquiring new customers, who until now were reluctant to join eBay because of their concerns about security issues in e-business in general. In this task eBay again could capitalize on its alliances with the leading companies in the various services.

  2. Fair Trade

    The products should achieve high profits if they haven't achieved their position through heavy discounting. Cash Cows These products have a high market share but in a mature market meaning slow growth. These products finance the company in many ways like the expenditure of the marketing and also cash for

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work