Japan’s economy is continuing to struggle, and there are rumors that it may take years to recover. If Japan was hit with a major finical crisis, this could be extremely costly for Ben & Jerry’s, and threaten their continued success in the market. Furthermore, exporting ice cream from Vermont to Japan may become unrealistic, due to the exchange rate shifts between the two countries. Finally, as previously mentioned, Ben and Jerry’s do not have a clear mission statement, which may make it difficult to enter any new market whatsoever.
Recommendations When taking the analyses into consideration, we conclude that Ben & Jerry’s should not enter the Japanese ice cream market. The results make it clear that Ben & Jerry’s is struggling internally; they may be spreading themselves too thin by trying to keep up with their original social mission, as well as their business mission. As it is now, their missions are conflicting, and they should focus on one or the other; if they plan to remain in the ice cream industry, they should focus more on their business mission and continued expansion into new markets.
External analysis indicates that Ben & Jerry’s customers play an important role in their success. By operating all of their production plants at one hundred percent efficiency, Ben & Jerry’s may find that they could afford to reduce their prices and thus cater to yet another customer segment, and in turn, further increase profits and market share. Ben & Jerry’s main threats are the threat of substitutes and suppliers. Ben & Jerry’s compete in two ice cream markets; the super-premium ice cream market and the regular ice cream market. Due to the fact that there are so many options available to customers, they have created a unique product with eye-catching packaging and chunky ingredients. The threat of suppliers is moderate to high due to the fact that they may increase prices, and if their prices go up, so do Ben & Jerry’s.
Furthermore, market penetration in Japan would require extensive marketing and a skilled management team. However, Ben & Jerry’s do not have the necessary amount of money required to advertise their ice cream in a new market (they mostly depend on word of mouth advertising in the U.S.) and are also lacking the man power to maintain the marketing and management aspect of their ice cream.
Ben & Jerry’s main rival in Japan is Haagen-Dazs, whose Japan sales amounted to $300 million, providing the highest margins of any of its markets. Ben & Jerry’s, on the other hand, were only seeing foreign sales of $6 million; therefore, it is clear that Haagen-Dazs is leading the market in super-premium ice cream in foreign markets. Ben & Jerry’s may be able to capitalize on Haagen-Dazs’ hard work of already having taught the local market about super-premium ice cream, and spend their time and money that they otherwise would have invested in this area, in marketing/advertising the product.
Much like when Ben & Jerry’s entered the France market, they have no marketing plan, no promotional support for advertising, and no social mission work in mind; if they should decide to enter the Japanese market, they are running the risk of losing control of their product. If Ben & Jerry’s chose the 7-Eleven option, they would be required to change the container size to fit the cultural needs in Japan, as well as change the design of their packaging, because Mr. Iida did not think the current packaging would be attractive to potential customers.
If Ben & Jerry’s chose the Domino’s Pizza option, they would lose total control of their product; Mr. Yamada would also be selling the ice cream and receiving royalties from sales. If Ben & Jerry’s want to be successful in entering the Japanese market, they need to wait until they have developed a stronger management team, as well as a strategic plan for being successful in the new market, and raise enough capital for intense advertisement in Japan.
Barney, J. & Hesterly, W. (2008). Strategic Management and Competitive Advantage (3nd ed). Upper Saddle River, New Jersey: Pearson Prentice Hall.