1. 1.

Submitted by Mohammed Naseer khan (1226114117)

Shiva Reddy (1226114135) Amarnath Reddy (1226114141)
2. 2. 1. What are the concerns of Perry Odak, the CEO of Ben
& Jerrys at the time of the case? Perry Odak was concerned
to solve problems regarding to the growth of the products
outside US. He was concern about whether or not entering
the Japanese market through finding out the bestdiscussion
given by the economic specialists of the company in a below
options: 1. Franchising or merging with Seven-Elevens 7000
stores in order to enter the Japanese market. 2. An
agreement with Ken Yamada and dominos. 3. Distribution
through Meiji Milk, including Tokyo Disneyland 4. To Open a
scoop shopsat Tokyo Disneyland. 5. An agreement with
Dreyers (Nestle). 2. Characterize Ben& Jerrys vision, goals,
mission, and culture. How transferable are these to Japan?
Ben & Jerry's adopted a three-part mission statement
formalizing the company's business philosophy. According to
the company's home page, the mission statement is as
follows:- 1. ProductMission: to make, distribute and sell the
finest quality all natural ice- cream and related products in a
wide variety of innovative flavours made from Vermont dairy
products. 2.Social Mission: to operate the company in a way
that actively recognizes the central role that business plays
in the structure of society by initiating innovative ways to
improve the quality of life of a broad community: local,
national, and international. 3. Economic Mission: to operate
the company on a sound financial basis of profitable growth,
increasing value to our shareholders and creating career
 opportunities and financial rewards for our employees.
Underlying this mission is the determination to seek
innovative ways of addressing all three components, while
holding a deep respectfor employees and the community at
large. Its transferable which operates the three-part mission
that aims to create linked prosperity for everyone thats
connected to our business in Japan: suppliers,
3. 3. employees, farmers, franchisees, customers, and
neighbours alike. Missions how its transferable in Japan:- 1.
It deals with costsavings for the avoidance of layers between
most suppliers and retailers for expectations in falling tariffs.
2. Focus on the health conscious to societies. 3. Look on the
opportunities to expand a geographic market which favors its
resources and interests. 4. Expand productline. The mission
to make a profit producing a premium productis fine.
Improving the quality of life is sort of vague and directionless.
The result is the lack of a mission for which a clear and
definable strategy can be developed and implemented.
When this is compounded bythe requirement that it be
operated as a caring capitalistic enterprise whose social
goals were at least as important as its business goals,
perhaps more so. 3. Analyze Ben& Jerrys resources and
capabilities in Vermont. Which key resourcesand capabilities
will provide the company with a platform upon which to build
a sustainable competitive advantage in Japan? Ben and
Jerry's enjoyed a good position in the US super premium Ice
cream market. Market share was second only Haagen-Dazs
who enjoyed a 44% share the Ben and Jerry's 36 %. This
 was achieved in spite of a premium price point. The premium
price of the productwas supported by a very high quality
image, which was developed by producing a very high
quality product. The company had achieved a strong national
distribution in its original US market. Ben & Jerry's
Homemade, Inc., the Vermont-based manufacturer of super-
premium ice cream, frozen yogurt and sorbet, was founded
in 1978 in a renovated gas station in Burlington, Vermont, by
childhood friends Ben Cohen and Jerry Greenfield with a
modest $12,000 investment. The company is now a leading
ice cream manufacturing company known worldwide for its
innovative flavours and all-natural ingredients made from
fresh Vermont milk and cream. Unilever, a multinational food
and personal products companyrecently acquired Ben &
Jerrys in spring 2000. The Ben & Jerry's Board of Directors
approved Unilever's offer of $43.60 per share for all of the
8.4 million outstanding shares, valuing the transaction at
$326 million (www.lib.benjerry.com, October, 2000). Under
the terms of the agreement, Ben & Jerry's will operate
separately from Unilever's current U.S. ice cream business.
There will be an independent Board
4. 4. of Directors, which will focus on providing leadership for
Ben & Jerry's social mission and brand integrity. Both co-
founders will continue to be involved with Ben & Jerry's, and
the company will continue to be Vermont-based. One of the
most successfulenterprises in the food business in recent
years has been Ben & Jerry's Homemade, Inc., a
producerand distributor of ice cream and related products.
The company has risen to number two in this business, just
behind Grand Metropolitan's Haagen-Dazs, and Ben &
Jerry's had 38.6 percent of the 1992 market for super
premium ice cream. Ben & Jerry's also have 95 franchised
and 4 company-owned ice cream shops across the country.
The number one flavour for the company is Chocolate Chip
Cookie Dough, and this productaccounted for 17 percent of
1992 sales. The company was started by Ben Cohen and
Jerry Greenfield in 1978. They started the company in a
vacant gas station with $12,000 as an initial investment.
They also had committed themselves to stay in business for
one year. The first franchise was opened in 1981, and
distribution started outside the home state of Vermont in
1983. The image that Ben & Jerry's has projected is of "two
ordinary guys" who started a company on a shoestring and
built it into a multimillion dollar. The company uses a 7-to-1
formula for salaries, setting the limits of the highest- paid
employee to 7 times that of the lowest paid full-time
employee. This reduces tensions within the company and
prevents it from becoming top-heavy in terms of salaries.
The company donates 7.5 percent of its revenues to the Ben
& Jerry's Foundation, a unit which supports various social
causes. The company pays very little for advertising and
instead has chosennontraditional means of promotion, such
as 4 large outdoorfestivals and an annual shareholder's
party in the summer. Each annual report contains a social
audit in addition to a financial report. The company's factory
in Vermont has been a leading tourist attraction for the state.
 Ben of Ben & Jerry's has stated: "Business has a
responsibility to give back to the community." That is
precisely what Ben & Jerry's continues to try to do (Hoover's
Handbook of Emerging Companies 1993-1994, 1994, 157).
5. What strategic choicesdo Ben& Jerrys have to grow in
Japan? Several factors resulted in reluctance of action by
Ben & Jerry's in entering the Japanese market. The
company was unsure on whether the company had any
business in Japan. They had trouble finding a lead option for
an entry, and Ben & Jerry's was struggling with so many
changes in the CEO office, and also having no strategic
planning. Ben & Jerry's got an offer from Ken Yamada, a
Japanese-American entrepreneur who offered to oversea
marketing and
5. 5. distribution of Ben & Jerry's products in Japan. He
proposed to take charge of all the Japanese market in
exchange for a royalty on all Ben & Jerry's products sold in
that market. In 1997 Seven-Eleven joined Yamada as a
leading contender for the interest in the Japan strategy. Perry
Odak was the new president for Ben & Jerry's and met with
Mr. Iida, the president of Seven- Eleven Japan. Seven-
Eleven Japan is the parent company of Seven-Eleven U.S.
Seven-Eleven's more than 7,000 stores represented a major
market regardless of all the possible outlets in Japan. One of
the problems is if the productwere introduced to the
Japanese market through the Seven-Eleven convenience
stores it would be just one of the many brands there. Ben &
Jerry's might not be able to build its brand equity in Japan
such as Haagen-Dazs had. Without brand equity it could be
difficult to distribute the productbeyond the Seven-Eleven
chain. Also there is always the possibility that Seven-Eleven
could cut off Ben & Jerry's at some future date if it doesn'tsell
effectively. (1) Balancing the attraction of a potentially strong
market against the mission and resources of the firm, (2)
Balancing the lack of resources (both financial and
managerial) for a company-controlled brand-building strategy
against the apparent hazards in granting brand development
rights to a licensee, (3) Making the bestof the increasing
consolidation and strength of the retailer sector, and (4)
Developing trust with a local partner. It makes sense for Ben
& Jerry's to enter the market in order to gain whatever
market share that is possible, but since barriers to entry are
so high they have to find a way to enter the market and get
recognized whether it is through Seven- Eleven or by using
Mr. Yamada. Entering is also a great idea if they proceed
with the Seven-Eleven marketing plan. This plan allows Ben
& Jerry's to enter into 7,000 Seven-Eleven stores shelve, but
still competing with other brands. Also Ben & Jerry's would
not have to promoteits super premium ice cream is since it is
already part of the ice cream market(for example Haagen-
Dazs) and Japanese people are aware of it. A plus for this is
that convenience stores appeared to account for about 40%
of super premium ice cream sales in Japan, and Seven-
Eleven was Japan's largest chain. 5. What should Perry
Odak decide? Why? Perry odak decided to choosemore
direct entry mode; opening the scoop-shop. Though FDI
 bears higher financial risks, the company can have better
control and reaction to the market. Moreover, unlike 7-
Eleven, Ben & Jerry's unique scoop-shopwould serve as
better channel for brand awareness. We also
6. 6. introduced some localization ideas. Starting from flavour
development to productpackage, pricing and promotion,
various kinds of localized strategies are suggested. Ben &
Jerry's have a strong potential in Japanese market. With
better market observations and strategies that responseto
the market, Ben & Jerry's will be able to enter and adjust to
the market more successfully. 6. What will Ben& Jerrys need
to do in Japan in order to carry out its chosenstrategyand
execute it well? Moreover the best choice for Ben & Jerrys is
to go for an agreement with Seven-Eleven for the following
reasons: Exploitation of the existing partnership in the
Japan for the distribution of Ben & Jerrys products. High
number (7000) of points of sale in particular convenience
stores which are a common way in Japan to purchase ice
cream. Increasing efficiency potential due to the logistic
organization of Seven- Eleven and its just in time practices.
Costs savings in terms. Higher margins to hedge in case
of Yen fluctuations against USD. STRATEGYANALYSIS: An
analysis of the external and internal forces shaping the ice
cream industry is necessary in order to determine the
effectiveness of Ben & Jerrys current (and prospective)
corporateand environmental strategies. We will utilize several
analytical tools to characterize the strengths and liabilities of
the industry and the effectiveness of the companys strategy,
 particularly through the use of the Five Forces Model of
Competition, the Sixth (Non-Market) Forceanalysis, SWOT
analysis, and the key factors of success. Five Forces
ModelofCompetition:- In order to identify and assess the
strength of external competitive forces on the ice cream
industry we utilized a common analytical tool, Porters Five
Forces Model of Competition, which is based on the
following five factors:rivalry among competing sellers,
bargaining power of buyers, bargaining power of suppliers of
key inputs, substitute products and potential new entrants to
the
7. 7. 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 & Jerrys; the primary
competitors include Dreyers and Haagen-Dazs. Rivalry can
be characterized as intense, given that numerous
competitors exist, the costof switching to rival brands is low,
and the sales-increasing tactics employed by Dreyers and
other rivals threatens to boosts rivals unit volume of
production (SEC Report, 1999). Buyers: - The power of
buyers is relatively high because buyers are large, consisting
of individual customers, grocery stores, convenience stores,
and restaurants nationwide and globally. Since retailers
purchase ice cream products in large quantities, this gives
buyers substantial leverage over price. In addition, there are
 many ice cream products to choosefrom, so the buyers
costof switching to competing brands is relatively low. In
order to defend against this competitive force, a companys
strategy must include strong productdifferentiation so that
buyers are less able to switch over without incurring large
costs. Suppliers:- The suppliers to the ice cream industry
include dairy farmers, paper container manufacturers, and
suppliers of various flavourings. 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 well-being of large,
established companies such as Dreyers and Haagen-Dazs.
Therefore, the ice cream suppliers have moderate leverage
to bargain over price. Substitute Products:- Many substitutes
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 readily available and attractively priced
compared to the relatively higher priced super-premium ice
cream products, the competitive pressures posed by
substitute products are intense. Companies that
8. 8. enter the super-premium market, therefore, must
adoptdefensive strategies that convince buyers their higher
priced producthas better features (i.e., quality, taste,
innovative flavours) that more than make up for the
difference in price. PotentialNew Entrants:- The barriers to
entry within the ice cream industry are moderate due to the
brand preferences and customer loyalty toward the larger
and more established rival companies. Other obstacles to
new entrants include strong brand loyalty to established firms
and economic factors, such as the requirement for large
sources of capital, specialized mixing facilities and
manufacturing plants. In addition, the accessibility of
distribution 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. An objective of Ben & Jerry's was to
use the excess manufacturing capacity it had in the U.S.,
and it found that exporting ice cream from Vermont to Japan
was feasible from a logistics and costperspective. The
company identified two leading partnering options. One was
to give Japanese convenience store chain exclusive rights to
the productfor a limited time. The other was to give long-
term rights for all sales of the productin Japan to a
Japanese-American who would build the brand. Forthe
company to enter Japan in time for the upcoming summer
season, it would have to be through one of these two
partnering arrangements.