Ben and Jerry Case Study

Ben and Jerry’s

Introduction: Overview of the Case

The corporation of Ben and Jerry’s first began on May 5, 1978 in a small town called Burlington located in Virginia. The founders of this ice cream parlor were Ben Cohen and Jerry Greenfield with only limited funds of $8,000, they produced a famous nationwide parlor that caters to millions of people. Specialty flavors of Chocolate Chip Cookie Dough, Cherry Garcia, Rain Forest Crunch, and frozen yogurt are attractions and symbols to the corporation. Establishing themselves as a top tier competitor in the ice cream industry. The first shop was opened in an abandoned gas station, making their drive and motivation during that time inspiring.

Ben and Jerry’s sold their premium ice cream products to supermarkets, convenience stores, grocery stores, and restaurants. They marketed themselves successfully, in which many consumers held Ben and Jerry’s ice cream as a standard in comparison with other ice cream. From only a few thousand dollars, the business grew to a million dollar corporation. During the 1990’s, they experienced losses like no other, by losing $1.87 million on sales of $148.8 million.

The mission statement consisting of the social mission, product mission, and economic mission dictated the behavior, practices, philosophies, ideologies, and principles of the corporation. Showcasing the ice cream firm as unusual in comparison with the fundamental practices of Corporate America. Their operations consists of globally expanding, improving the quality of a broad community, making, distributing, selling the finest quality ice cream, increasing value for shareholders, and providing employees with rewards and benefits.

Ben and Jerry’s are always looking to improve the quality of ice cream by creating, innovating, and promoting their decisions and integrating them within the mission statement to function in a consistent and repeatable manner.

Problem Statement:

With losses of $1.87 million on sales of a record high in net sales of $148 million, the focus is on the income statement. The income statement shown in Exhibit 1 illustrates the problem of spending too much on expenses. The budget on expenses was not clearly thought out, as in 1994 Ben and Jerry’s lost a significant amount of money. If this type of budgeting continues, the ice cream parlor will stabilize itself, allowing new competition to enter the market. One factor to this expense is the hiring of 537 employees to work for Ben and Jerry’s. When the season of winter enters, these employees will not be useful because business definitely be slow.

The productivity level will be low, and therefore should not be wasting money on labor when it is not needed. This leads to the other factor of not having properly trained managers, leading and directing the staff of saving and making money. Overall, the management level needs vast improvements in order to support Ben and Jerry’s culture with financial structure and foresee money saving opportunities by cutting labor costs.

Strategic Analyses:

A couple of models are needed to explore the core of the business of Ben and Jerry’s. The first model will be the S.W.O.T. analyses, which will describe the strengths, weaknesses, opportunities, and threats of the company. Illustrating both interior and exterior positives and negatives of the firm, and helping a new perspective develop in order to make clear judgment calls for improvement. Second, Porter’s Five Forces model will be the conclusion of the outline, and it will better explain in detail the threat of new competition and how it is volatile to the company.

Strengths:

Strong brand name recognition after 17 years of service. Small Vermont company became a top tier player in the ice cream market, surpassing record high sales for their firm in 1994.

A nation-wide company focused on their mission statement to improve the quality of their surroundings, to promote job growth, and serve consumers with premium ice cream.

Their drive and motivation in 1978 is truly inspiring as they started their firm from an abandoned gas station will limited funds of $8,000 and turning into $148 million 17 years later.

They have a wide variety of flavors that consumers can distinguish themselves with Ben and Jerry’s and any other ice cream parlor.

Donated second-quality ice cream products to the homeless, handicapped, and community groups for better enjoyment of dessert, and helping with fund-raising activities to provide quality social gatherings among any group.

Established The Ben & Jerry’s Foundation, Inc. a nonprofit organization that received 7.5 percent of the company’s pretax profits.

Provided employee benefits such as insurance, dental and medical, sick days, vacation days, 401K plans, and stock shares to policyholders to showcase the appreciation for the workforce as well as share the prosperity within the committed firm.

Weaknesses:

Lack of management skills among the firm, not taking charge to cut down costs when necessary.

The expenses are too high, they need to balance themselves out by cutting costs in labor and some ice cream parlors in Vermont due to the high contribution to debt from those stores.

Computer control programs and software accounted for a $6.8 million dollar write-down in the year 1994, affecting production and products tremendously in which led to the high expense cost of their income statement.

Too many employees for the amount of stores needed, due to the uprising hiring of the 537 employees needed to run the stores, an evaluation needs to be made to distinguish and research slow seasons from busy seasons.

Ben Cohen was starting to misbelieve in himself that he can run the company, and that type of negativity can be disastrous to the company. Being pessimistic will only cause added worries and distress and a structure of wildness throughout the firm.

They have a slow development of products making their target market limited with what they can provide and sell.

Their market share was declining to shareholders, showcasing a little instability within the corporation, and vast improvements is needed to be made.

Opportunities:

Were able to promote themselves within the 50