Ben & Jerry's

Michelle Bousfield

MGT 5700-002 su11

Ben & Jerry’s

Ben & Jerry's Homemade ice cream, a United States based company popular for its super premium ice cream, must expand it is market beyond the US borders to ensure continued profitability. While the company has enjoyed enormous success in the US domestic market, the opportunistic based results in its international ventures has been less than impressive. Therefore, with a clear market strategy, the company has decided to enter the Japanese market, where total ice cream sales reached $4.5 billion in 1995 and where consumers are eager for high quality products.

The company has narrowed its strategies to two, distributing its products through Seven Eleven, or through Domino's Pizza franchises. Either way, the company is implementing a strategic alliance.

If Ben & Jerry's choose either strategy, they will improve the performance of their current operations by exploiting Japan's economy of scale. Either one will also facilitate entry into the Japanese market.

The Seven Eleven route would allow the flexibility needed for Ben & Jerry's to promote their ice cream flavors but would also create uncertainty due to the imbalance of power in Seven Eleven's favor. Seven Eleven could squeeze profits from Ben & Jerry's making the partnership quite risky.

On the other hand, the Domino's pizza distribution strategy, headed up by Ken Yamada, a person the company already trusted, would allow the company to enter the market without much research, knowing that the customers and distribution channels are already in place. However, lack of a clear strategy might permit Yamada to make decisions that are not congruent with Ben & Jerry's overall strategy.

Ultimately, an alliance with Seven Eleven would be the best plan. Ben & Jerry's could maintain control over their product at relatively low cost, barring $2 million in factory upgrades, while also ensuring distribution in over seven thousand stores.