We will perform a SWOT Analysis to determine Ben & Jerrys strengths, weaknesses, opportunities, and threats, followed by Options for Entering the Japanese Market and Recommendations.

by yon150 (student)

University Degree Business and Administrative studies

Ben & Jerry’s- Japan Case study

Ben & Jerry’s Background

Ben & Jerry’s Homemade, Inc., was founded in 1978 in Burlington, Vermont, by lifelong friends Ben Cohen and Jerry Greenfield. The two friends started the company in a renovated gas station, with a small initial investment of $12,000. Ben & Jerry’s is now one of the leading ice cream manufacturers in the United States with three production plants, and is well-known for their innovative flavors, funky, caring company image, and for using all-natural, Vermont-based, ingredients for all their products.

Cohen and Greenfield believed in being a socially responsible company, known for its caring capitalism and anti-corporate style. Ben & Jerry’s had a unique corporate culture, where stockholder meetings were outdoor festivals, and the highest paid employee would not be paid more than seven times what the lowest paid worker earned (Barney & Hesterly, 2008).

Ben & Jerry’s went public in 1984. Ten years later, sales exceeded $150 million, their net income reached a high of $7.2 million, they had six-hundred employees, and were the second largest super-premium ice cream manufacturer, with a market share of thirty-four percent (second to Haagen-Dazs, with a market share of forty-four percent). However, the company actually saw a loss in 1994, due to a slowdown in growth and decreased market share (Barney & Hesterly, 2008). In order to maintain their competitive advantage and social responsibility standards, it is critical that the company expands into international markets, but now without developing a management team first.

It is necessary to perform an analysis of the internal and external factors that shape the ice cream industry in order to further understand Ben & Jerry’s current (and prospective) corporate and environmental strategies. First, we will perform a SWOT Analysis to determine Ben & Jerry’s strengths, weaknesses, opportunities, and threats, followed by Options for Entering the Japanese Market and Recommendation.

SWOT Analysis

Strengths:

Ben and Jerry’s donates seven and a half percent of pre-tax profits to social causes, which helps send the message that they care about the community, as well as advertises their products
Ben and Jerry's Scoop Shops are franchised worldwide
Strong brand name; ice cream flavors like “Cherry Garcia” have established a brand name customers want to buy
Ben and Jerry Homemade, Inc. is a publicly traded stock, “BJICA”
This helps the corporation raise money for future projects and the development of new ice cream

Weaknesses

Lack of professionalism in management

Need to hire serious members to discuss future growth, create a strategic plan, and to separate their business from their social issues

Unclear clear mission statement

Hurts the company entering into new markets

If they do not know what direction they are headed in, they will fail at maintaining a successful business strategy in a new foreign market
They need to enter new ventures with the end in mind

Their focus on social responsibility issues could hurt the company by:

Shifting focus away from important business matters and not ...

This is a preview of the whole essay

Weaknesses

Lack of professionalism in management

Need to hire serious members to discuss future growth, create a strategic plan, and to separate their business from their social issues

Unclear clear mission statement

Hurts the company entering into new markets

If they do not know what direction they are headed in, they will fail at maintaining a successful business strategy in a new foreign market
They need to enter new ventures with the end in mind

Their focus on social responsibility issues could hurt the company by:

Shifting focus away from important business matters and not being able to capitalize on new markets if they do not fit in with their social beliefs
Adding unnecessary costs; the money spent on social issues may be better invested in a strategic management team

Opportunities

Market to health conscious consumers by introducing fat-free and healthy ice cream/frozen yogurt products
Expand existing product lines to compete with the private, in-house brands offered by supermarkets, which controls twenty-nine percent of U.S. ice cream sales
Develop a strategic management team and continue international expansion

Ben & Jerry’s may enter new markets, such as Brazil, South America, and China, and thus expand their customer base, and increase profits

Merge with a company to gain more advantage in the industry

Threats

Target market is changing because of customer preferences

Customers are wanting to prevent obesity
Customers are more apt to buy substitute products due to the current state of the economy

Contamination of the food supply

Milk
Egg (contamination, like e-coli)

Cost of supplies could potentially increase, thus causing the price of Ben and Jerry’s ice cream to increase as well

Options for Entering the Japanese Market

Ben & Jerry’s had a couple different options for entering the Japanese market. Their first option was to gain distribution through the use of Domino’s Pizza/Mr. Yamada, or partnering with 7-Eleven/Mr. Iida, or simply not entering the market at all. We have created the following list of pros and cons to determine which option best suits the needs of Ben & Jerry’s.

Domino’s Pizza/Mr. Yamada

Pros:

Instant expertise in an unfamiliar market
Positioning of the brand and arranging the first launch
Taking care of marketing distribution into the future
Providing assistance from addressing many issues involved in putting together:

An entry strategy in Japanese market
Maintaining an ongoing market management

Yamada knew frozen foods
Entrepreneurial spirit and marketing sense shown by his success with Dominos Pizza

Cons:

Proposal was to have full control of marketing and sales for Ben & Jerry’s in Japan
Yamada would invest his time in creating and carrying out a marketing plan only after reaching an agreement with Ben & Jerry’s
There was no specific plan available for consideration in the future
Yamada would retain the rights to change the flavors he offered based on Japanese market trends. To do so, he would collect market data and customer responses to determine which flavors his customers wanted

7-Eleven Mr. Iida

Pros:

Seven-Eleven would allow Ben & Jerry’s to control their market development, and to pursue other distribution channels in Japan
Seven-Eleven provides an instant entry to the market
Seven-Eleven thought it could sell at least six cups per day at each store, which would be the minimum to justify continuing to stock Ben & Jerry’s

Cons:

7-Eleven would not be in the position to help Ben & Jerry’s develop other distribution channels in Japan
7-Eleven’s ice cream freezer cases suggested that this would require approximately ten percent of its cup ice cream sales to be Ben & Jerry’s
Ben & Jerry’s was still unknown in Japan and it did not have the budget for a marketing campaign
Sales would rely on promotional efforts by 7-Eleven, but the company was making no specific commitments for such efforts
Packaged only in personal cups (120 mL) and not the 473 mL (one pint) size that Ben & Jerry’s currently packed
7-Eleven wanted to provide its own package design for the ice cream

Not Entering the Market

Japan’s economy is continuing to struggle, and there are rumors that it may take years to recover. If Japan was hit with a major finical crisis, this could be extremely costly for Ben & Jerry’s, and threaten their continued success in the market. Furthermore, exporting ice cream from Vermont to Japan may become unrealistic, due to the exchange rate shifts between the two countries. Finally, as previously mentioned, Ben and Jerry’s do not have a clear mission statement, which may make it difficult to enter any new market whatsoever.

Recommendations

When taking the analyses into consideration, we conclude that Ben & Jerry’s should not enter the Japanese ice cream market. The results make it clear that Ben & Jerry’s is struggling internally; they may be spreading themselves too thin by trying to keep up with their original social mission, as well as their business mission. As it is now, their missions are conflicting, and they should focus on one or the other; if they plan to remain in the ice cream industry, they should focus more on their business mission and continued expansion into new markets.

External analysis indicates that Ben & Jerry’s customers play an important role in their success. By operating all of their production plants at one hundred percent efficiency, Ben & Jerry’s may find that they could afford to reduce their prices and thus cater to yet another customer segment, and in turn, further increase profits and market share.

Ben & Jerry’s main threats are the threat of substitutes and suppliers. Ben & Jerry’s compete in two ice cream markets; the super-premium ice cream market and the regular ice cream market. Due to the fact that there are so many options available to customers, they have created a unique product with eye-catching packaging and chunky ingredients. The threat of suppliers is moderate to high due to the fact that they may increase prices, and if their prices go up, so do Ben & Jerry’s.

Furthermore, market penetration in Japan would require extensive marketing and a skilled management team. However, Ben & Jerry’s do not have the necessary amount of money required to advertise their ice cream in a new market (they mostly depend on word of mouth advertising in the U.S.) and are also lacking the man power to maintain the marketing and management aspect of their ice cream.

Ben & Jerry’s main rival in Japan is Haagen-Dazs, whose Japan sales amounted to $300 million, providing the highest margins of any of its markets. Ben & Jerry’s, on the other hand, were only seeing foreign sales of $6 million; therefore, it is clear that Haagen-Dazs is leading the market in super-premium ice cream in foreign markets. Ben & Jerry’s may be able to capitalize on Haagen-Dazs’ hard work of already having taught the local market about super-premium ice cream, and spend their time and money that they otherwise would have invested in this area, in marketing/advertising the product.

Much like when Ben & Jerry’s entered the France market, they have no marketing plan, no promotional support for advertising, and no social mission work in mind; if they should decide to enter the Japanese market, they are running the risk of losing control of their product. If Ben & Jerry’s chose the 7-Eleven option, they would be required to change the container size to fit the cultural needs in Japan, as well as change the design of their packaging, because Mr. Iida did not think the current packaging would be attractive to potential customers. If Ben & Jerry’s chose the Domino’s Pizza option, they would lose total control of their product; Mr. Yamada would also be selling the ice cream and receiving royalties from sales.

If Ben & Jerry’s want to be successful in entering the Japanese market, they need to wait until they have developed a stronger management team, as well as a strategic plan for being successful in the new market, and raise enough capital for intense advertisement in Japan.