Ice Fili Case Analysis

Côme Billerey

23/09/2015

Harvard Business Case Analysis : Ice-Fili (АЙС-ФИЛИ) - 2005

Questions

2. “What are the potential sources of competitive advantage in the Russian ice cream

market?”

2.1 « What are customers ready to pay for? » : factors determining willingness-to-pay

• Brand image of companies creates unique impression on consumers. For example, Baskin-Robbin’s selling

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point is high-price and high-quality products (« Baskin & Robbins and Haagen-Dazs1 had positioned

themselves as premium ice cream producers, distributing through franchised restaurant and café

networks »), whereas region producers sells traditional flavor ice-cream.

« In 2002, domestically produced Russian ice cream was among the cheapest in the world to buy. Ice

cream prices ranged from 2.5 rubles (8.5 cents) to 15 rubles (about 50 cents) per portion. Ice-Fili priced its

ice cream products at approximately 6 rubles, placing it in the medium-level category; Nestlé positioned

some of its brands in the premium ice cream category at 10 rubles (or more) per product, while the regional

producers filled the low-price category at 3 to 4 rubles. »

The flavor of products also determines willingness-to-pay. Baskin-Robbin introduces their most classical

yet not-too-expensive products to Russia markets, influencing the appetite of Russian consumers.

Russian prefer their traditional ice-cream with natural ingredients, which is the advantage of Ice-Fili.

Russians do not care about the brand that much.

People buy ice-cream on impulse and the willingness to pay largely depends on the availability of the

product, that is the convenience of the selling location.

2.2 « What are the costs components? »

• Lower rents and labor costs can create a cost advantage for producers as regional business.

• As business expands, the cost to find appropriate human resources increases and adaptive strategies to new

markets also need more capital resources : « The company...