Fancy Ices and Desserts - Essay Example

Case Study: Fancy Ices and Desserts This work is a case study based on the example of ices and desserts industry. The guideline of the paper is to describe current trends within the business, to work out a strategy how grow the uptake of the products by major caterers, to work out a strategic plan how to increase sales. The present case study will use the methods of description and analyze. The main purpose of the study is to find out what management features should be changed to make companys strategy more successful. We shall try to apply theoretical knowledge to the case study research. This theoretical knowledge will become the basis for fulfilling the main purpose of the present case study. Firstly it is necessary to say that towards the end of the twentieth century frozen desserts and ice creams have become the most favorite products in the United Kingdom. Ice cream is told to appear in the country in the early beginning of the century and quickly won the popularity. With the sales of more than $3 billion in the end of the 20th, ice cream was making come back as the most preferable product in UK. With other desserts such as ice milk, frozen yogurts, sherbets, and miscellaneous products the total revenue was about &9 billions per year. (Kay 1995) Description of the company: current trends within the business The company “Fancy Ices and Desserts” is nowadays a division of a huge corporate manufacture Food and Beverage. It deals with supplying the products through the corporate supply chain. The company prefers to take any new product which is offered. The company is busy with selling desserts and fancy ice creams for the Cash-&-Carry markets. The products are not recognized consumer brands yet. The division also sells bulk product dispensed like the dispensing machines. The main distribution networks are Cash&Carry, Wholesale frozen distribution, bulk direct. The company has salesmen, who are territory based, but they work directly for regional directors and their responsibility is “dotted” line. The company has nowadays to increase the capital equipment, because there is an increase in bulk products sales. The negative moment is that present equipment requires maintenance and sometime it operates not on the highest level. Concerning competitors the company has main three rivals in the market place. For example in the sector cash&carry the company’s competitor is a branded rival with a marked standard. But the rival has very few specialists who are aware of current market trends in comparison to “Fancy Ices”. But the company has less money to spend on promotions in comparison to branded competitors who increases product sales by means of using the power of their well-famous brands. The second global rival is in the sector of distribution. This competitor is without a famous brand, but has a superior bulk offer and more specific ices. What is more important is that pricing is rather keen in this sector and “Fancy Ices and Desserts” is not able to offer superior services. The third powerful competitor is Supply Company which deals with making products “Fit for the Market”. This company has simple service model and is very cutthroat concerning pricing. The current products of the company: chocolate ice, lolly with all flavors, truffle desserts, choc heaven desserts, economy desserts, bulk Italian ice cream. It is seen that the production line is constantly widening with new products. It is necessary to note that the company is the division of a giant diversified company which annual sales account billions of dollars and desserts and fancy ice is only the part of its total production line. The division “Fancy Ices and Desserts” has its strong and weak points. It needs new strategy in order to grow uptake about its product and to increase sales and profits. The opportunities of the company are significant and it needs only a push to implement new strategic plans. Although the division is rather new, it is developing and seems to be perspective in a long run. In order to have clear idea about the current trends within the business it is necessary to provide some data showing the positive and negative moments of industry. 2004-2005 trends: Choc ice –up 35% Lolly – down 50% Bulk ice cream – up 20% Choc heaven – down 50% Frozen desserts – up 2.7% from 2001 Strategic plan: how to increase sales and to grow uptake It is necessary to underline that working out a new strategy is the most important step in every business. Business plan is something like estimation of your business. The investors and lenders will at first look at your business plan and only then they will decide whether to invest or not. Good strategy is the bet for success, therefore working out takes much time. It is a matter of fact that ice ream industry is developing and new competitors are constantly appearing in the market. It is very difficult for companies to survive and to receive profits. “Fancy ices and desserts” also need significant changes in order to improve the company’s position in the market. (Kay 1995) The first step is to grow the uptake about the main company’s products: bulks, ice creams and desserts. The best ways are advertisements and promotions both on television and radio. If people are constantly listening about the product there are more chance that they will buy it. But the advertisement should not be obtrusive. It has to be accurate and exact. The possible advertising may be: “Airy ice cream is the bet for airy figure”, etc. in order to grow people’s awareness about the product it is necessary to have skilled specialists who will be able to ask all customer’s questions. It is better to spend money on specialists’ training and then to gain profits and to increase sales. The second step is working out strategy. It is a common knowledge that strategic planning of each company including “Fancy Ices and Desserts” consists of several steps: determining objectives and missions and then strategic planning which is the most important step in company’s development. The new strategy has to aim at sales increasing. But how is it possible to increase sales and to save money simultaneously? That is why strategic plan is important to analyze the development of business in the next years. It will also present the capital which is needed to lead a company to make-out. It can be stated that effective strategy of each organization must be able to achieve desirable objectives; consider external environment and resources of the company; be able to provide competitiveness; be flexible and dynamic. (Kay 1995) I’d like to offer strategic planning that uses alternative approach consisting of four steps: draw, see, think, plan. Firstly the company has to draw the ideal image and the desirable end state of the company. The next step is evaluating of the present situation. It involves the identifying of the distance from their ideal image. Their third step is taking specific actions in order to shorten the distance from the ideal image with accordance to current situation. Finally their last step is defining the resources needed to achieve their goals and objectives. But the question remains: what about sales increase? In order to increase the sales it is necessary to implement the strategy which will significantly increase the amount of money spent by customers. (Kay 1995) The possible strategies are to increase average value sale, to increase the number of transactions and to increase the number of customers (to spend money on advertising). The possible ways to increase the amount of customers are advertising, discounts and sales. It is needed to stimulate customers to buy more often from you then usual (special offers and new production lines). To my mind the best strategy is to pag attention to each customer and to try to reduce the operational costs at the same time. (Kay 1995) How to utilize the sales force Sales force depends actually on strategic alignment, effective selling behavior and strong capabilities for managing and evaluating favorable opportunities. These elements are the essential part of sales strategy. In order to utilize and improve sales the company has to deals with the mentioned issues at the root. 1. Sales behavior: involves staff trainings, appraisal system. The aim is to reinforce the behavioral changes and to create new approach to customers. It means that it is necessary to set new sales processes. 2. Capabilities: it is needed to focus on decision makers and sales tactics in order to build “sales intelligence”. 3. Alignment: it is possible to segment customers for analysis. Then to focus on the sales forces and operating resources. Meeting with “Meals for You” “Meals for You” is a strong entertaining business that would be rather useful partner for “Fancy Ices and Deserts”. Thus company is potentially advantageous partner. Their demands are 15% rebate, cost hold for a three year contract, installation of 200 ice cream machines. The first step is to ensure the required issues, because they will benefit in future. The second step is to examine thoroughly the possible annual revenue that is told to be 500,000 pounds per year. The last step is to ascertain that the overall contract will return 62% GP. And only then implement installations and maintenance of machines, staff trainings, etc. communication skills are the essential part of every negotiating process and that is why my negotiating position will be flexible, but strict and exact. (Kay 1995) Works cited Kay, John. Why Firms Succeed. New York: Oxford University Pressб 1995. Read More