Business strategies are important to create the paths to achieve the business objectives and the goals. According to the Peter Nieuwenhuizen and Richard Koch (2007) business strategies are exclusively prepared for the operation or business managers, for the people those who are fighting to create and deliver the products and services.
All the business organizations are forced to create strategies to be competitive in the market. Strategies are sources of success of any business in the world. Strategies must be supported by the strengths and other resource capabilities of the business and therefore, it is important for the businesses to build strengths and internal resources to achieve objectives through designing proper strategies. Further, business need to analyze the strategies prior to developing the strategies since the strategies that we choose to design and implement must be competitive and should be capable enough to outperform the competitors in the market place.
The environment can be analyzed by using strategy analysis models like PESTEL, SWOT and Porter’s five forces. PESTEL analysis will provide an overall understanding about the external environment and major changes in the business environment in which operate. According to the Eren (2002) the macro environment analysis includes political, social, economic, legal and technological environment factors. Grant (2008), Wheelen Hunger (2008), Thompson et al. (2009) and David (2009) say that the analysis of the environment is the key or important step of strategic planning process.
SWOT analysis explains the business in terms of strengths, weaknesses, threats and opportunities of the business. SWOT analysis helps the management of the particular business entity to understand the strategic organizational situations well (B.Krishna and Dugger, 1995). Further, SWOT is a logical approach to assess the internal and external environment in order for the business organizations to design and implement their strategies. Further, Porter’s five forces may provide a clear idea about the attractiveness of the industry in which the business operates. The report explains the strategic position of the Ben and Jerry using PEST, SWOT and Porter’s five forces.
The Ben and Jerry is the well-established business organization in United States of America (USA) and they mainly produce and sell high quality superior healthy ice-creams and other dairy products. Unilever is the parent entity of the Ben and Jerry. Co-founders of the Ben and Jerry are Ben Cohen and Jerry Greenfield. Ben and jerry well-known among the customers those who live within the geographical boundaries of America and the beyond the America since the Ben and Jerry focus on delivering fat less or healthy ice creams and other dairy products. The Ben and Jerry operates in a market where customers seek dairy and ice-creams products which are fat free and the market players who operate in the industry provide superior high quality ice-creams and the Ben and Jerry also produce and sell similar superior high-quality ice-creams and dairy products. Further, the Ben and Jerry three different aspects of their mission. Their mission has three components and they are as follows,
- Product Mission: To make, distribute and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the earth and the environment.
- Social Mission: To operate the company in a way that actively recognizes the central role of that the business plays in society by initiation innovative ways to improve the quality of life locally, nationally and internationally.
- Economic Mission: To operate the company on a sustainable financial basis of profitable growth, increasing value for our stakeholders and expanding opportunities for development career growth for employees.
The Ben and Jerry has managed to develop unique benchmarks or standards for their performance by dividing their mission into three different category. This has forced them to set the business strategies in order to achieve above stated missions and the Ben and Jerry need to assess its performance in product, social and economic perspectives to make sure that the business is progressing on right track.
- USA government has policies to develop its local or domestic business to next level by bringing them to international market and assisting them to capture foreign market.
- Changes in the government may have an impact on the existing foreign policies and which may have a negative impact on the Ben and Jerry since they extremely focus on ban on other few selected countries in such case they may boycott the products of US business entities.
- Appreciation USD against other countries’ currencies has made the discourage other countries people to buy US products since these products are relatively expensive in terms USD
- Increasing unemployment has resulted in low demand for the products.
- People who are concerning about the health are increasing.
- Care on animals
- Online purchases and increase in virtual businesses
- Use of electronic devices or electronic money in business transactions.
- Strong brand recognition enable them to retain the customers with them and the customers are well aware about the brand and the products of the Ben and Jerry. When they have strong brand recognition in the market it is easier for them to promote their product and enhance the sales since the customers are well aware of the products and they have trust on the products of the Ben and Jerry. Further, which will assist them to gain competitive advantage in the long run.
- Healthy products: The Ben and Jerry produce and sell healthy and superior quality products. These products are made of natural ingredients and this is the unique selling proposition of the Ben and Jerry. This has help them to meaningfully differentiate the product which they produce from the competitor’s product.
- Financial Capabilities: The Ben and Jerry has been in the business since 1978 and they manage to dominate the market by having higher market share. Further, they the parent entity also well-established business entity in the international market. With all these resources the Ben and Jerry managed to have strong financial position to be competitive in the market.
- In efficient Strategies: The risk taking attitude is not acceptable for the organization like Ben and Jerry to have. Since they are well-established they should try to expand their market or diversify the product using the same brand. In other words they can introduce new product under the same brand name.
- Lack of support from top to operational level workers: There is no proper coordination between the top level managers and the operational level management and this will lead to communication gap and due to this the organization will not be able to progress towards their intended target.
- Number of people who are health conscious increasing day by day: This helps the Ben and Jerry to promote their products and attract this market segment better than its competitors.
- Online buying behavior of customers: This requires not to maintain physical stores or show rooms and based on the customer’s order the business can deliver the order.
- Intense competition
- New government of USA has changed its foreign policy and which may have adverse impact on the business of the Ben and Jerry.
Industry background and its attractiveness can be explained using porter’s five forces model as follows,
Figure 1 Porter’s Five Forces
Threats of New Entrants: The threats of new entrants is relative high since there are no any significant artificial barriers to enter into the market. However, since the Ben and Jerry operates in the market for a long time and they produce large quantities they have the economies of scale in their production.
Threats from substitute is relatively low since there few market players to supply superior quality healthy ice-creams in the market and therefore, customers have few options or alternatives.
Bargaining power of customer is also very low since they do not have many businesses which produce the healthy superior quality ice-creams.
Bargaining Power of Supplier is moderate.
Existing rivalry is low or moderate but, it is increasing. There are around 4 to 8 market players in this industry and among them the Ben and Jerry dominate the market with the highest market share. Following are the main competitors of the Ben and Jerry.
- Dunkin Brands Group
- Hagen Das
- Baskin Robbins
- Dreyer’s Grand Ice Cream
Above mentioned competitors also makes a lot of changes in their business strategies to be competitive and strong in the market. Due to aggressive strategies used by the competitors the Ben and Jerry have to use suitable strategies to retain its existing customer base.
Market segmentation refers to act of dividing into groups or segments that have common needs and which responds similarly to a marketing action (www.investopedia.com). In other words the market segmentation refers to the act of dividing the heterogeneous market into homogeneous or identical market based on the demographic factors, geographical factors, behavioural factors and the psychological factors. Ben and Jerry has segmented its market based on the geographical and demographical factors. They have use the countries to segment their market and the age group of the people. They have ice-creams for Europe and Asia market and they have ice-creams and yogurt for the kids and other people who belong to different age categories. Further, the use another demographic factor to segment the market which is the involvement of people in safeguarding their health by refraining from consuming fat products. Further, at times they use behavioural elements in segmenting market by segmenting market based on the special occasions like festivals and new year’s and other national and international celebrations days.
Target market of the Ben and Jerry Includes people who prefer or people who are willing to purchase high quality superior ice- creams by paying superior price for the products. This target market includes children, students and families too.
The Ben and Jerry many strategies in order to be competitive and grow in the market place. These strategies can be summarised as follow,
- Positioning Strategy
- Product Differentiation Strategy
- Segment Management
- Brand Management
- Value Creation
Above strategies are the major business strategies that the Ben and jerry uses to grow their market share and maximize the profitability in the industry.
Positioning is an act of obtaining very strong and unique place in consumers in mind. Hooley et al (1998) and Trout (2012) state that the employment of positioning strategies make difficult for the competitors to imitate and assist the business organization to gain competitive advantage and profit. Ries and Trout, 1986; Porter, 1996; Rossiter and Percy, 1997; Fill, 1999 say that how the business selects to position themselves or their offerings dictates its implementation of advertising and marketing communication practices in the short term, medium and long term and which help to have loyal customers with the particular business.
Poisoning is important for the any businesses since which create the first impression in customer’s mind and first impression that created by the communication mix must be best impression since customers normally establish their perceptions based on the experience they have in particular product or brand. Ben and Jerry significantly relay on their positioning strategy and they have positioned themselves as a superior high quality ice-cream provider in the market place. Product positioning can be done through using competitive positioning, reducing competition positioning strategies, product benefits positioning strategies and product attribute positioning strategies.
Competitive Product positioning strategy refers to that particular organization positioning the particular product directly against the competitors by calming the superiority of the product over its competitors. For this kind of product positioning strategy the product need to have unique or differentiated product attribute in their product. Reducing competition positioning strategies refers to that an entity differentiate its product and through that they position the product and this most suitable for the well-established brands or products. Product benefit positioning strategies refers to that an entity position its products or brand by emphasizing the benefit of the product. Main objectives of the product positioning are to differentiating the product of an entity from the competitors and to identify the customer buying preferences (http://www.businessstudynotes.com). Further, the positioning is important since it helps to understand the customer preferences, make the business market oriented, help to adopt with market changes and enhance the good will of the brand and the customer loyalty (http://www.yourarticlelibrary.com). Ben and jerry claim superiority over the competitors by emphasizing that they produce and sell high quality and superior healthy ice-creams. This indicates that they follow the competitive product positioning strategies or Product attribute positioning strategies.
Product differentiation strategy is one of the key business strategies of Ben and Jerry. Ben and Jerry use this strategy to differentiate their products from competitors and to claim superiority over the competitors. The businesses which follow either differentiation strategy or cost leadership strategy is in a better position to attain superior performance in the business (Porter, M. 1980 and Hambrick, D.C. 1983). Porter (1980) says that a business can gain competitive advantage by having and implementing two generic strategies which are product differentiation and the cost leadership.
Further, following differentiation strategy provides many benefits to the Ben and Jerry since the customers prefer differentiated products of Ben and Jerry. Differentiation strategy helps the Ben and Jerry to create value for the organization, compete with the competitors without using the price. Product differentiation strategy helps them to create loyal customers and which will maximize their profit in long run. The business can differentiate the products based the design, quality, characteristics and other packaging and promotional tools. The Ben and Jerry differentiate the products from its competitors based on product quality or the characteristic of the product. They sell the differentiated Ice-creams and yogurt by emphasizing that they sell high quality superior healthy ice creams. It important to highlight that the Ben and Jerry has gain competitive advantage by using product differentiation strategies efficiently and successfully.
Ben and jerry should improve its product differentiation strategy by adding new unique features to the product since the competitors also started to copy the unique features of the Ben and Jerry. Ben and Jerry should get legal protection like paten right or something like that to avoid that the competitors imitate the differentiated features of the products of Ben and Jerry. Further, the product differentiation strategy is closely connected to the positioning strategy. Therefore, it is important for the Ben and Jerry to carefully design the differentiation strategy since it has impact on the positioning strategy. Further, they need communicate whatever the differentiated features that they have in the product. This will help the target customers of the Ben and Jerry to create the perceptions related to the brand strongly and meaningfully. Ben and Jerry should add value for the customers through their differentiated product features and the differentiation must be meaningful for the customers.
Segment management is one of emerging business strategies in the business world. Segment management derived from the market segmentation concept. Segment management refers to that particular business closely monitoring changes in the segments and find possible opportunities and threats that can be exist in the market due these mentioned changes and then the management designing appropriate and suitable business strategies to address deal with this particular opportunities and threats in the particular market segment. Further, the segment management include the planning and implementation of strategies for a particular segment to design appropriate marketing and promotion strategies. Ben and Jerry has better segment management practices. They separate individuals in order to manage the market segment and to study and understand about the particular market segment. They get proper understanding and insights about customer purchases preference and buying behaviour by analysing the market segment separately. This will help them to design proper marketing strategies which fairly and sufficiently cover the requirements of all the customers in the particular market. Further, Ben and Jerry uses whatever the insights they get from the segment management practices in their strategy creation process.
Brand management is a dependent variable in marketing since it depends on many other variables like brand awareness, brand image, brand visibility etc… . Brand management refers to that the entity manages its brand reputation by association positives things to the particular brand by efficiently using marketing mix elements. Brand can be managed through proper brand awareness program. Brand awareness activities assists the business to promote the brand and share the brand with other people and when the brand is doing well in the market it will enhance the value and image of the brand and this will help to manage the brand strongly. Therefore, author says brand management is an important business and marketing concept that all the business organization should give priority build strong brand management practices in their organizations.
The Ben and Jerry uses its marketing mix elements in a good way to create brand awareness among their target customers and in the industry. Further, promotion mix or the communication mix the main marketing mix through which the Ben and Jerry promote its products and the brand in the market segment. They believe that the success of brand management and the organization depends on the extent to which the customers are aware of the brands and products of the Ben and Jerry. Therefore, they significantly rely on the promotion mix since it creates awareness among the customers. If they managed to create strong brand awareness then customers will be able to recall and recognize the brand quickly and further, they will associate positive feelings, symbols with the brand of Ben and Jerry and this will lead to create good or healthy perception regarding the brand and the products sell by the Ben and Jerry. If the customers have positive perceptions regarding particular brand which indicates that the brand image of the Ben and Jerry has developed significantly. In nutshell, the Ben and Jerry provide significant emphasis on the brand image on the Brand management and segment management for following reasons,
- To understand the profile of the customer base and purchasing behavior of the customers.
- To obtain strong customer insights and accordingly design the marketing strategies
- To design proper marketing mix strategies in order maximize customer satisfaction by meeting their needs better than competitors. For this Ben and Jerry need to have proper understanding about customer needs and wants and the competitors and this can only be achieved through strong segment management practices.
- By understanding the segment through segment management the Ben and Jerry will be able to types and the quantity of resources required to operate in the particular market segment in advance and accordingly they will be able to prepare themselves to operate well in the market.
- Brand management is all about building brand and enhancing the brand image. For this Ben and Jerry use Promotional mix in order to create brand awareness since brand awareness can lead to build strong brand image and this will turn maximize the profitability of Ben and Jerry by increasing the sales and the number of loyal customer base.
As we all know, a product has its own life cycle and it normally passes all the stages in the product life cycle. Development, introduction, growth, maturity and decline are the major stages in the product life cycle and during the development and introduction stages sellers do not normally experience profits instead they incur losses while promoting and creating awareness for the product in the market. When the product in the growth phase they experience significant profit and the product continues to grow in the market. However, once it reach its maturity level growing phase is stopped and the customers starts to switch the brand and demand for product decreases and this will in turn lead to decline stage. During the maturity and the decline stage the management search alternative strategies to survive in the market. Among those alternative strategies “Product Diversification Strategy” is the important strategy.
Product diversification strategy is that the business organization change or modify or alter the existing product significantly or develop and introduce completely a different product in an existing market. Product diversification strategy must be supported by the strong research and development facilities along with good understanding of the customer need and wants thorough a market research. Product diversification strategy is suitable for the business who are struggling to sell their own product in the market and the business which observe continuous drop in the demand for goods and services. Such business find to change their existing product or they should try introduce a completely new product in the market.
It is important to mention that, it is expensive strategy to implement and consume considerable amount of time to implement. Further, the Ben and Jerry is the entity with a long history and well- reputed past track records. Further, demands for their product is growing and they are performing well in the market and this statement is supported by the current market position of the Ben and Jerry.
Further, the Ben and Jerry produce ice-creams, yogurt and other dairy products and the resource they have is sufficient produce these kind of products. They already have sufficient dairy products in their well-balanced and diversified product portfolio and it is meaningless to add another similar kind of product to the portfolio since that will not add any significant value. Further, trying to add a completely different product will not work out since the brand is well positioned for the diary product and even if they developed and introduce completely a different product the Ben and Jerry will not be able to get the synergy affects or economies of scale in their production. Further, if they introduce completely a new product that may create cultural problem with in the Ben and Jerry and may force them to reposition themselves in the market. Above mentioned concerns are the major reason why the Ben and Jerry did not go for the product diversification. Ben and Jerry must remain in their present strategically important position and should not try any new strategies till the market environment or situation demand new strategies since they seems good in terms of their existing strategies.
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