Dippin Dots

[DIPPIN’ DOTS (DD) ICE CREAM] |

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1. A SWOT analysis shows the DD has differentiated itself in the market through the use of its ‘flash freeze’ technology although it has been adjudged an invalid patent rendering a negative impact on DD. The need for improving distribution channels, franchise support and advertising will strengthen the image and branding of DD. With an increasing number of competitors like Mini Melts and Frosty Bites, in a maturing industry, DD requires consumer directed marketing, increased product differentiation/uniqueness in terms of number and types of products offered, knowledgeable and experienced staff to pursue research and development, competent after sales services for franchisers and a competitive pricing strategy.

An analysis through Porter’s Five Forces model reveals that an improvement in supplier relationships will improve image. The use of supply or demand economies of scale theory, in light of increased ingredient costs will strengthen DD’s buyer power and become a barrier to entry for competitors. The availability of substitute products and the entry of many competitors into this specialised market of cryogenically prepared ice-cream will negatively impact DD’s market share because of comparative (Nestle and Unilever) size and resources. The diversity of competition, threat of backward integration, high exit barriers and low switching costs creates intense market rivalry.

A PESTEL analysis shows that the ‘ice-cream culture’ would support the longevity of DD but the need for innovation, market segmentation and capital investments would create a sustainable enterprise and progressively increase market share.

2. DD’s strategic disposition has led to a combination of differentiated and focussed strategies allowing for faltering competitive advantage. The concentration on a niche market and the captive market of 8-18 year olds has not brought about the high levels of diversification and attention to customer...