Ben and Jerry ice-cream company - Case Study Example

Case Analysis Based on the case, Ben and Jerry (B&J) ice cream company is widely known for its ability to manufacture one of the finest superpremiumice creams in its industry aside from its major competitors such as Haagan-Daz, Dreyer’s Grand, and Breyer’s. In 1990s, the competition in ice cream industry particularly in the superpremium segment was highly intense. Prior to this, based on the case, ice cream was already considered affordable luxury good in 1980s. As a result, product quality, flavor differentiation and marketing in superpremium segment for ice cream had become important factors to gain competitive advantage (Collis 3).

According to Porter, there are two important things that a company needs to implement in order to successfully outperform rivals. One would be to deliver greater value to customers, and the other is to create comparable value and possibly at a lower cost (Porter 62). Porter tried to illustrate that these two can actually be integrated within operational effectiveness and strategic positioning. These two activities are not quite the same although their point is to actually outperform rivals.

Operational effectiveness is about trying to perform the same activities with competitors but in a better way, while strategic positioning is about performing different activities or the same activities but only just in different ways (Porter 62). At some point, operational effectiveness and strategic positioning had contributed to the level of success of B&J which have become tantamount to its highly differentiated ice cream flavors. It was an advantage on its part due to the fact that it was one of the key players in its industry.

It has already positioned itself in the market. However, due to intense competition, its rivals were also trying to formulate better moves which based on Porter’s idea of strategy may actually fall either on operational effectiveness or strategic positioning or both. For instance, the use of advertisements and discounts on the part of Haagan-Daz in 1992 contributed to its competitive edge over B&J (Collis 4). Haagan-Daz had direct distribution compared to B&J which only relied on traditional retailing strategy.

At this point, Porter’s idea about operational effectiveness has become so positive on the part of Haagan-Daz. B&J and Haagan-Daz were actually trying to initiate distribution of their product offerings but it was the latter which got the competitive edge. The ability of Haagan-Daz to initiate direct distribution was able to substantially reduce its product cost, enabling it to benefit from its value chain. As a result, it was able to give discounts for the final price of its product offerings.

Therefore, Haagan-Daz compared to B&J was able to provide comparable value at a lower cost. In addition, B&J was trying to innovate on its product offerings, but there was no substantial market research under its product development leading to difficulty in forecasting its prevailing market demand and production output (Collis 5). Thus, B&J eventually experienced either shortages of some flavors and overstock. Regarding this information and based on Porter’s idea of what a strategy is, it is clear that B&J substantially lacked the ability to deliver high value to customers.

These are just some of the highlights showing the level of B&J’s organizational, operational and management expertise in its industry. All of these could eventually reflect on the kind of future challenges that Holland would face. In order to face various challenges on the part of Holland, he needs to ensure his effort should be in line with the implementation of both operational effectiveness and strategic positioning. B&J might have significantly started something regarding these moves in order to outperform their competitors, but it is necessary to combine them together on the part of B&J and this is how Holland should proceed.

After all, Porter argued that it is not just enough to implement operational effectiveness alone just like in the case of most Japanese companies (Porter 63). In addition, Porter substantially discussed that operational effectiveness is a strategy. For many years, B&J focused mostly on operational effectiveness that it might have considered a strategy on its part. In fact, the real proof to this is its ability to create product innovation, but the problem with it is the lack of research-driven product development.

However, Holland should try to emphasize this, and along the way should introduce relevant strategies that according to Porter should outperform existing competitors. In particular, Holland should focus more on research-driven product development. After all, as clearly stated in the case, the existing trend within B&J’s industry highlighted product innovation aside from the existing need for unique product management and distribution. References Collis, David J. Ben & Jerry’s Homemade Ice Cream Inc.

: A period of transition. Boston: Harvard Business School Publishing, 2005. Print. Porter, Michael E. What is Strategy? Boston: Harvard Business School Publishing, 1996. Print.