Ben & Jerry’s Strategy Plan

Vic BurrackAPU

BUSN620

Ben and Jerry’s Strategy Plan Overview • Ben and Jerry’s Strategy Plan Overview

• Ben and Jerry’s Details

• Ben and Jerry’s Perspective of Business

• The Vision and the Mission

• Ben and Jerry’s SWOT

• Ben and Jerry’s Old Strategies

• Ben and Jerry’s New Strategies

• Unilever Facts

• Unilever Growth Matrix

• Unilever SWOT

• Unilever Numbers

• Unilever Forecast

• Unilever Forecast (continued)

• Conclusions

• References

Ben and Jerry’s Details• Produces: premium ice cream, ice cream novelties, low fat ice cream, low fat yogurt and sorbet [1]

• Only ingredients of high quality• Use of milk and cream with no synthetic hormones– rBGH [3]

• Ben & Jerry’s contributes set minimums for corporate philanthropy [1]

• Using the Ben & Jerry’s Foundation• Donations to community groups and nonprofits • Vermont and across USA

• The purpose of this philanthropy • Support the founding values of the company

• Economic and social justice• Environmental restoration and peace through understanding• Support the community

• Ben and Jerry's bought by Unilever in 2000 [5]

• Ben & Jerry’s operates as autonomous member of the Unilever conglomerate• No public financial numbers available anymore

• Continues to operate business as a three-part mission • Emphasizing product quality, economic reward and a commitment to the community[2]

Ben and Jerry’s Perspective of Business

*This is the graphic from the Ben and Jerry’s website [1, 4]

The Vision and the Mission

Vision• Socially responsible company• Supports separate charity work and the vendor communities [3]

Mission • Utilizing the Ben and Jerry’s Mission Plan [1]

• Three interrelated parts• Product Mission

• Economic Mission

• Social Mission

• Belief that all three parts must thrive equally [2,3]

Ben and Jerry’s SWOTStrengthsEstablished, prestigious, successful global ice cream manufacturerEstablished sales in USA, Europe and AsiaBrand name synonymous with social responsibility and environmentalismEach year donates large amounts of money to philanthropic causesThis brand complements Unilever's range of ice cream brands

Weaknesses Company seen as having a social agenda not mainstream belief structureThe agenda of social responsibility could add unnecessary costsManagement reported as not effective in a number of respected journals Reinvestment structure from back in 1994 still locking them into long-term debts Automation costs from improvements cutting into profitsCFO convicted of embezzling over $300,000 during tenure (2006)Humane Society complaints about suppler inhumane treatment of farm animals

OpportunitiesHealth conscious consumers want the fat-free and alternative ice cream and frozen yogurt productsProducts are allergen free, gluten free and peanut freePrototype HFC-free freezers in 2009 in USA - no venting of harmful chemicalsTie in local and global social agenda with new product lines worldwideEmerging markets around the globe want premium ice cream with brand recognition

ThreatsGlobal economic downturn creates less disposable income spending per potential customer everywhereRaw Material prices continue to rise (milk products, sugar, chocolate, nuts, etc.)Consumer product choices for actions towards healthy living (dieting, high blood pressure control, diabetes, etc.)

[1,2,3,4,6,7]

Ben and Jerry’s Strategies (old)

• Applying old Strategies [1,4,6,7]

• Continued Mission• Joint economic success and environmental responsibility

• Markets and Directions [1] [4]

• Brand Loyalty

• Viral video promotions of contents (YouTube contests)

• Differentiation • All-natural, high quality ingredients

• Unusual flavors and interesting names for product types

• Green Mission• Use of recycled materials and dioxin-free (unbleached) paper in product packaging [3]

• Support for existing vendor sales

• Support of franchise shops (120 + in the USA)

Ben and Jerry’s Strategies (new)

Unilever Facts

• Unilever is a global conglomerate and supplier of fast-moving consumer products [8, 9, 10, 11]

• More than half of yearly sales in developing/emerging markets• Asia, Africa, Central & Eastern Europe and Latin America

• Primarily food and household products industry supplier• Nutrition, hygiene and personal care sales - 57% of revenue

• Existing portfolio includes 400 well-known brands [9]

• Ben and Jerry’s, Lipton, Slim Fast, Hellmann’s, Dove and Axe/Lynx

• Ice cream and beverages segment now includes• Ben & Jerry’s, Breyers, Klondike and Popsicle

• Unilever’s support structure increased sales of Ben & Jerry’s [1, 4]

• 70 % sales increase within the first year following acquisition

Unilever Growth Matrix

[9]

Unilever SWOTStrengths Operating worldwide (conglomerate)

Seen as having a big - diverse – strong - publicly known Brand portfolio of products

Preexisting relationship with various levels of distributors and retailers

Has scale economics for distribution

Identified problems with slowdown of growth and sales globallyImplemented “Path to Growth “strategy to counter problems - trimmed unsuccessful brands in 2000

WeaknessesMisidentification of customer needs sometimes

Reported management inefficiency

General trend of continued decrease in revenues

Multi year reduction for spending on R & D

Reported incapacity to take advantage of acquisitions for maximum growth potential

“Path to Growth” strategy showing slow results

Streamlining still needed

OpportunitiesPotential for rapid development and global marketing to match consumer trends

Match consumer needs for healthy products (dieting, high blood pressure control, diabetes, etc.)

ThreatsGlobal economic downturn reduces consumer spending

Existing and continued strong competition (generic store brands, competitors)

Increasing product cots in multiple areas (raw material cost, manufacturing, shipping and exchange rates etc.)

[7,8,9,10,11]

Unilever Numbers

Net profits

2009 2008 2007

3,659 5,285 4,136Total assets less current liabilities

2009 2008 2007

25,417 22,342 23,743

Relevant Points [1, 4, 8, 9, 10, 11]

• Policy of mergers and acquisitions• Continued company restructuring through “Path to Growth” strategy

Started years ago • Business disposals, remove impairments and other means • 2008 numbers show irregularity - part of actions from major restructuring strategy

• Total current liabilities have been reduced• Prediction of continued steady future sales• Pension costs and similar obligations stable not increasing

* All number in Euros

Operating profit

2009 2008 2007

5,020 7,167 5,245

Total Assets

2009 2008 2007

37,016 36,142 37,302

Cash and cash equivalents at the end of the year

2009 2008 2007

2,397 2,360 901

Sales

2009 2008 2007

39,823 B 57,117 B 40,187 B

Unilever Forecast (3-5year)

Unilever Forecast (3-5year) continued

Unilever:• Sluggish global economy will continue to affect sales• Continue to consolidate to remove problem areas (“Path to Growth”) • Continue to develop adjusted strategies to improve growth numbers• Improvement in next few years should be steady• Expanding focus on “doing the right thing” (corporate, social / environmental )• Will continue to support high profile brand name Ben and Jerry’s

Ben and Jerry’s:• Continue to be independent subsidiary of Unilever• Continue to be unique and proactive with their strategies• Continue competitiveness without sacrificing belief structure• Continue with the basic vision and mission - corporate, social and environmental• Will maintain their respected position as a ice cream maker – market leader • Promote franchising of scoop shops to expand market reach in US and internationally• Create new venues for marketing /sales to boost sales• Continue to protect itself from total integration by Unilever• Have some discontinuity in perception of mission and goals between themselves and Unilever• Expand Ben and Jerry’s brand globally by leveraging Unilever’s resources

Conclusions

References[1] Ben and Jerry’s Homemade. (2010). Business Evaluation. Retrieved from http://www.referenceforbusiness.com/businesses/A-F/Ben-Jerry-s-Homemade-Inc.html#ixzz0tal5qNau

[2] Dairy Reporter. (2002). Unilever launches ice cream chain in Spain. Retrieved from http://www.dairyreporter.com/Products/Unilever-launches-ice-cream-chain-in-Spain

[3] Environmental leader. (2010). Green Product Strategies. Retrieved from http://www.environmentalleader.com/2010/06/21/sustainable-product-strategies-for-going-green/

[4] Hoovers. (2010). Ben and Jerry’s Factsheet. Retrieved from http://www.hoovers.com/ben-&-jerry's/--ID__12763--/freeuk-co-factsheet.xhtml

[5] Rubin, C. (2010) . Ben & Jerry's Fair Trade Fanfare Belies Struggle With Corporate Parent. Retrieved from http://www.inc.com/news/articles/2010/02/ben-and-jerrys-goes-fully-fairtrade.html

[6] Kapoor, D. (2010). Ben and Jerry's fair-trade viral video campaign. Retrieved from http://insidepublicrelations.blogspot.com/2010/03/ben-and-jerrys-fairtrade-viral-video.html

[7] Unruh, G. (2010). Sustainable Product Strategies for Going Green. Retrieved from

[8] Unilever Annual Report. (2010). Full Annual Report. Retrieved from http://annualreport09.unilever.com

[9] Unilever Research. (2010). Discounted Cash Flow Analysis. Retrieved from http://www.wikiwealth.com/research:UL /

[10] Kao, A. & Haffenden, S. (2009). Unilever. Retrieved from http: //www.slideshare.net/KaoHaffenden/Unilever

[11] Unilever Annual Reports. (2010). Ten year Charts. Retrieved from http://www.unilever.com/investorrelations/annual_reports/charts_ten-year2/index.aspx

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