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Ice Fili case from HBR - Essay Example

The competition is largely due to a saturated ice cream market, shrinking sales revenue, increase in the number of competitors and threat of substitutes. Of all competitors, Nestle is perceived to be the fiercest. This apart, the small regional ice cream producers and other Moscow based producers pose a tough challenge in the metropolitan markets. In the finest ice cream producer category, there is Baskin & Robbins and Haagen Dazs. The substitute products include beer, soda, yogurts, chocolate and other confectionary candies. As opposed to the falling tendency found in the Russian ice cream industry, the beer, soft drink and confectionary industries enjoy increasing market demand. This indicates a preference shift of the market from ice cream to these substitute products. Given such a competitive ice cream market scenario in Russia, the case of Ice Fili assumes further significance.  (Rukstad, Wells & Yin, January 22, 2007, p. 1)       The short term and long term corporate goals of Ice Fili are almost similar as both deal with competitors. The short term goals are to stay viable in the Russian ice cream market and to sustain the place of market leader. The long term goals include acquiring market share surpassing the competitors and to distinguish its products. With these corporate goals and the concerns of the company in mind, the case is being analyzed with a view of recommending solutions that will help Ice Fili overcome its concerns and achieve its goals.   External Analysis: External analysis involves the analysis of external environment of the company. It consists of economy and industry analysis. Economy:       The analysis of the Russian economy involves three phases. These are discussed below: i. The first phase was prior to the dissolution of the Soviet Union- that is before year 1991. During this time, the state controlled planning, production and distribution of food products. Under this state run system, companies like Ice Fili were responsible only for production and storage of ice cream. The other activities in the value chain were taken care of by the state. Ice cream production capacity increased substantially during this time as the alcohol factories were reassigned to the production of ice cream as a part of the then Soviet Union President Michail Gorbachev’s anti alcohol campaign. ii. The second phase was post year 1991 and before year 1998. During this time the political and economic situation was extremely unstable and the Soviet Union was dissolved. There was a marked shift from state run economy to open market economy that was characterized by competition through privatization and price liberalization. As a result foreign ice cream companies like Ben & Jerry’s, Baskin Robbins, Nestle and Unilever entered the Russian ice cream market. These economic changes paralyzed the domestic producers like Ice Fili. Since these domestic companies were responsible for only manufacturing and storage of ice cream thus far, the rest being taken care of by the state, they found it extremely hard to update production technology, modernize infrastructure, develop better marketing and packaging solutions, develop dealer and distributor networks and create new distribution channels so as to compete with their foreign counterparts. iii. The third phase consisted of the financial crisis of 1998 ...Show more
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Summary

  Table of Contents    Introduction: 3 External Analysis: 5 Internal Analysis: 18 Issues and Problems: 25 Alternatives (Possible Solutions): 28 Criteria Selection and Recommendation: 33 Implementation Plan of Action: 36 Conclusion: 39    Introduction:       Ice Fili is a midsized company of Russia and one of Russia’s top ice cream producers serving the medium level category of the market…
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