Personal Experience in Ben and Jerrys Ice Cream Company - Admission/Application Essay Example

 Module 1 SLP My choice for the organization upon which I would apply what I have learned from the module is Ben and Jerry’s Ice Cream Company. The company is actually a brand of ice cream, frozen yogurt, sorbet, and ice cream novelty products, manufactured by Ben & Jerry's Homemade Holdings, Inc. which has its headquarters in South Burlington, Vermont and owned by Unilever. Every company and corporation deserves to be the subject of economic inquiry because all of them are one way or the other, affected and operated by economic principles. I chose Ben and Jerry because I have had the opportunity to be part of their business and witness the operation of economic forces in the decision regarding the marketing and logistics of the company. For example, I learned that there were reasons why they chose to market a certain flavor, why they expanded overseas and why they are sponsoring society enhancing events. One of those reasons is that doing so would generate even more profit for the company. With regards to economic terms, the words resources, cost, profit, market and efficiency are most important to the company as they are frequently mentioned especially after the selling hours of the stores. The company has been successful in achieving its projected growth primarily because it has been very keen in assuring that costs are controlled and demand is improving. It is also by finding room where efficiencies can be improved, such as energy-efficient cold storages, that the company has been able to gather more profit. It has also been expanding its market overseas and offering a wider variety of flavors resulting to more and more people getting to know and appreciate the company and its products. These economic terms are what shape the company. The two big ideas that I see as most relevant to the company are first “choices involve tradeoffs- we always give something up to get something else” and second “How people approach the choices they make resources matters a lot to our lives- and we’d better understand what’s going on”. The first case is very much observable in the operations of the company. Customers exchange money for the right to consume the ice cream but here is what is most interesting: Customers will pay more for a certain flavor. The tradeoff there is that when the company improves its flavor offerings, people will want to buy more which means more income for the company. When it doesn’t create some form of specialty with its products, it does not gain any extra income. To gain patronage, the company would offer promo and special discounts which means extra cost to the organization. Virtually, everything that is done in the company, even that of making sure deliveries are on time and the workplace is tidy can be related to the desire of the company to achieve something and that is to ensure that stay in the business. In order to do so, they must give something back. When making choices, you have to make sure that what you choose will be beneficial to you. In the ideal case, one does not give something to receive harm in return. What would then ensure that we make the right choice? Ben and Jerry’s decision makers (those whom I had the opportunity to interact with) relates to me that the decisions they make especially that of resources such as labor, capital and raw materials, were not made spontaneously. The process is not easy and involves weighing consequences. It follows then that one must be equip with the proper set of knowledge of the industry. For example, what marketing strategy should we choose? Will it be better to adapt a child-centered scheme or adapt a wider audience to be targeted? Should we change the text of our packages to that of the native tongue of the foreign market we are supplying or should we stick to English texts? Every choice is a gamble but we don’t have to play uninformed. Like the chess master, we have to know what comes next of every move. We need to be able to predict how things will turn out to be. It’s all planning and strategizing. Module 2 SLP As we have seen from the rent control module, there can be issues that are detrimental to the organization but are in place because the members of the organization are divided on the appropriateness of the measure. Ben and Jerry suffer from the sentimentality it attaches to its products. What I mean is that it continues to market flavors which are rather unappealing. The reason behind is, so they tell me, is that they owe it to tradition that these flavors are still being marketed. They were what defined the company in the past and were actually best sellers. Due to the passing of time and the shift of preference, they became increasingly unwanted. When products don’t get sold, they get spoiled and when they do, that translates to losses for the company. Not only that, they also present unproductive investment. Instead of equipment and labor directed to other more profitable ventures, they are wasted in sentimental products. As a result, efficiency in terms of resources is lower than what it could be. For sure, they do get sold sometimes but these are occasions very close to the statistically improbable case. There were discussions regarding this issue but so far, the sentimental ones have prevailed not only because they are persuasive but also because those who want these products out of the shelf fear that the company will lose its spirit as tradition has been violated. Rather than be blamed for this and to avoid division within the company, they would choose to be silent and just comply. Division is a sign of weakness other competitors will take advantage of. Another issue opined by many to be detrimental to the company is the reluctance of the management to source all of its raw materials to other countries which are truly cheaper. The argument is that the company may lose consumer preference from the home country and thereby lose its face in its home country. Supplies from other countries, which are usually those underdeveloped, are said to be unreliable. The quality of the raw materials such as milk may not comply with standards leading to aberrances in production. Trade barriers may be employed by the government anytime. Diseases such as Mad Cow Disease may cause the mass killings of bovine thereby effectively cutting the milk supply. The company could also face boycott due to preference of other countries’ products. The list goes on and those in the upper echelons of the company would rather adhere to the already established system of sourcing its raw materials. As a result, production costs remain high. There were also cases wherein the company was willing to address the issue accordingly. To prevent the burgeoning of the production costs, they instead resorted to ‘trimming’ down the labor force. They were willing to risk the political and social enmity because this was the only way where the risks are not too high – unlike that of sourcing materials from other countries. If it had not employed any measures, then it runs the risk of getting bankrupt. What is important is to choose what would cost the company less. Our discussion so far leads us back to the two big ideas – choices and tradeoffs and making the right choice. The situations which we have discussed previously involved choices that would mean tradeoffs. From here, we see that the making choices are not easy due to certain social implications. Sometimes, however, the right choice must be made even if one runs the risk of enmity. The company must be prepared for this and it must always bear in mind that choices do carry with it tradeoffs- not a new idea if you ask me. Module 3 SLP People will generally choose the basic necessities over those deemed as a luxurious especially during hard times. Ice creams can be thought of as a luxury which is dispensable. What would you choose- a decent meal or a cone of ice cream? The latter would almost as always lose to the former. This is why the ice cream business is rather risky. There is a way, however, to avoid the luxury tag on ice creams. In our discussion with the demand factors for luxury items, we note that some of them are dubbed as luxurious because they are superior as compared to the substitutes available on the market. What if superiority is not equated to higher price? What if the company offers the best there is and still charges the average price on the market? If that is the case, then we can assume that at the very best, when people decide to avail of ice cream, they will choose Ben and Jerry’s. The problem that concerns us now is how to achieve superiority and low price tag together. There are actually a variety of methods available which we have previously mentioned in the SLP of Module 2. One of these is to lower the cost of raw materials and labor by outsourcing them to countries which have low cost of labor and materials. This is actually the trend nowadays though there is news that some companies are going back due to certain political and social pressures in other countries. Another way is to use cost efficient equipment such as energy-efficient lighting and freezers. There are many of these already available on the market though the initial cost of acquiring it is significant. There also methods of improving the logistics and production system so that processing and delivery time are minimized. The overall result that we want to achieve is a lean but mean business operations. At this point, one may ask,” What is the sense of doing all of these when people are not inclined to buy ice cream in the first place?” Indeed, lowering the price is not the only answer. We must also generate the demand by convincing the consumer to buy our products and consider it as a necessity rather than as luxury items. How can we do this? The answer is quite simple. What part of the society form the greater chunk of the demand pie? They are the children and they are the ones that must be targeted. Parents would usually oblige to the requests of their children so we must persuade the children to tell their parents that they want Ben and Jerry’s ice cream. I think that this idea is not new because most ice cream companies project themselves in a manner that would attract children. Ben and Jerry’s website is very much attractive to children because of its colors and renderings. This leads me to think that they have already thought of this. With this strategy, one can generate the demand for a luxury item. We can also make use of the principle of marginal utility to generate demand and ensure that the business continue running. Eating ice cream for me is a delightful experience- one which I am looking forward in doing again. By asking and observing other people, I have come to the conclusion that the same goes true for them. That is, as people eat more ice cream, they get more satisfaction. The company highlights the satisfaction of eating ice creams through images of people happily licking the product. Last but not the least is the status symbol. Bing able to eat ice cream brings a sense of satisfaction but being able to provide one to your child or to your date is a source of pride especially in times of hardship. When people see that you can afford to buy one, they will regard you not only as a responsible and loving person but also one which has extra money to spare and therefore very successful. It can even influence others to do the same. This is the power of making use of status symbols. Module 4 SLP The corporation does not finance its operations by itself alone. Some of it is sourced from loans from banks and other creditors. The interest rates are closely monitored by the organization so as to be able to avail of the lowest interest rates. Every dollar is important because when taken aggregately, they present a considerable amount of money which can be directed to other profit generating activities. I have not been exposed to the decision making process regarding loans but I have been informed that there are people who are assigned to monitor the trends of major economic indicators such as Consumer Price Index and Producer Price Index. I have been told that the reason why the company is subscribed to 2 newspapers (one regular and the other solely for business) is because the organization is looking for opportunities for growth, development and threats to the industry. They are to stay alert and be able to recognize the consequence of each deals and outcomes. With regards to reports, my inquiry into the Finance department revealed that the company avails of published reports from the government. The data from these reports are analyzed by hired experts who use their models to come out with figures, conclusions and recommendations. These are then presented to the Board for discussion and review. The basic idea is that the future market be predicted accurately and be able to act accordingly. Large purchases made by the company involves property for its stores and buy outs of other ice cream companies especially the start ups who are gaining popularity and thus presents competition. The money used to finance this is not drawn from the company’s coffers but from creditors. What does interest rates and knowing how to predict them got to do with all of these? The company will be able to time the purchase so as not to cost too much. These transactions usually involve large amounts of money and therefore large amount of interest payments. Most of the people in the company that I have come into contact with is making mortgage payments. I think that it has become somewhat an integral part of the way we live. That being the case, it behooves us then to think critically on when we should avail of mortgages so much so for an organization as big as Ben and Jerry’s. Remember also that Ben and Jerry is just a brand name owned by Unilever. Considering the size of the corporation, it becomes necessary to control costs and to manage resources effectively. You don’t just go on buying something because you think it s worth buying. Every purchase should have been though of and studied whether feasible or not. Now, feasibility studies are not overnight works of art; they require time and expertise. It requires preliminary data. This is what the Federal Reserve and government reports come in. It would be prudent to consider the data presented on the report because these have been carefully analyzed before being put into publication less they want to earn the ire of businessmen. We then reflect the wisdom in the two big ideas of economics we have chosen previously. If we are to choose, we must choose wisely and to achieve such, we must have the right set of knowledge. We borrow because we want to protect and continue our investment but the tradeoff is that we must also pay for the cost of protecting and ensuring that the business runs smoothly or that it continues to grow. Perhaps the most important message that could be learned is that we need to invest more thoughtfully if we want to profit or for it to cost us less. Module 5 SLP Economic recession is bad news for just about every business firm because it carries with it the threat of lower consumer spending and confidence. When economic activity starts to slow down, the exchange of goods and services will also go down. That means less opportunity to generate sales. Although we have mentioned that the housing sector is the one that is seriously hit, it pulls along with it other sectors. AS house prices go down, people will not earn as much as they used to in selling houses. That would imply less money to spend on other goods. We can therefore expect a lower propensity for people to buy ice creams. The big ideas that we have chosen applies more than ever. Regarding choices and tradeoffs, we might be forced to make choices that involve greater tradeoffs because we have limited options. Thus we need to make sure that our decisions are appropriate and thoroughly considered though this should have been the case from the very start. Sometimes, decisions must be made which can register losses for the company but is less than what could have happened when other decisions were chosen. Ben and Jerry’s Ice Cream was forced to trim its labor force because not doing so would be unsustainable and could cause the downfall of the venture. There is one thing that must be recognized with the knowledge that recession is already on the horizon and that is to prepare. Measures must be taken to cushion the effect of a sluggish economy. Asked if the company is already adapting one, I was informed that talks are already underway regarding contingency measures if ever recession becomes real. Foreign markets are being tapped and strengthened so that it could counteract the weakness at home. The idea is that sales abroad could replace the lost sales at home. This is not a sure fire way to ensure that the company will survive the recession because most countries are tied to the U.S. economy. That is, recession in the U.S. could mean recession to other countries as well. Furthermore, intellectual property rights are very low in some underdeveloped countries which imply that flavors can be easily copied. With materials being less costly in foreign countries, it should be expected that less costly substitutes will also be proliferating. These and the fact that most of the competitors at home will also be targeting the foreign market makes the weapon against recession rather ineffective. Most of the people in Ben and Jerry’s are quite optimistic that the recession will not be occurring soon because they believe in the efficiency of the Federal Reserve. It is believed that it will find a way out of the mess as it usually does. Time will tell whether they have a change of heart. Nonetheless, being prepared is being caught flat footed. This is why each individual is also doing their best to adapt and apply austerity measures such as turning the lights or the radio off in the office whenever it is unnecessary. Every cent save now becomes important as the looming recession becomes more real. In the end, it will not only be a matter of managing resources so that costs are down, profits are high and efficiency at its maximum. It will also be about the external environment. Events in other industries could also have tremendous effect on other business sectors. Every company must be informed and they can do so by being updated regularly. It does not stop there. Actions must be taken to ensure that the firm can withstand the decline in economic activity. Choices must be made on how to act and those choices must be the right one less we want to have our names included in the casualty list (the unemployed or the bankrupt). Module 6 For me, taking the course has been a very informative and exciting journey to the ideas of organizational behavior and teamwork. It was informative in the sense that I have realized the importance of economic concepts as it applies to the organization. There were so many ideas that I have come to know. For example, I know now the reason why the company to which I have been part of is aggressively entering foreign markets or why they are employing promotions. The flurry of ideas and realizations that came with it made the journey very exciting. I commonly hear myself utter the words, “So that’s the reason why!”. Being able to apply the concepts to the firm made me appreciate it even more. I know that I have just begun to come to know of these ideas and that my analysis and establishment of connection between the ideas and the firm is not that professional. I am already thinking of ways to improve myself in this field of knowledge and I think I can do so by reading other related articles and applying the concepts. I would not confine the application of ideas to Ben and Jerry’s alone. Instead, I would be trying to apply it even to myself and to my family. The thought of doing this alone makes me excited. The truth of the matter is that I sometimes got frustrated in this course especially when it came to relating the module regarding mortgages and interest rates to Ben and Jerry’s. It was also hard for me to connect the implications that the Federal Reserve may have on the firm. Nonetheless, it is precisely this challenges that I have come to appreciate the course. Perhaps the most important thing is that I have learned is how to think critically and how to relate my ideas in an organized manner. I know that I still have much learn but I feel that I am somehow more prepared than before. Read More