Ice-Fili Case Analysis

1224 WordsJan 5, 20155 Pages
Ice-Fili case analysis 1. Please provide an in-depth five forces analysis to illustrate the competitive environment for Russia’s ice cream industry. How is it likely to evolve? Five forces analysis: 1) The bargaining power of suppliers * As some producers such as Ice-Fili wanted to keep their product’s quality level, they imported specific raw materials, but they didn’t have a problem in finding new suppliers. * As the technology of Russia was lagged behind Western’s, Ice cream producers needed to import most of their ice cream machines. The bargaining power of suppliers for raw materials is low, while for facilities is high. 2) The bargaining power of customers * There are various ice creams in Russia, so…show more content…
* The Russian economy is discouraging foreign investments, but the producers needed that money to update technology, modernize infrastructure, develop marketing and packaging solutions, develop dealer and distributor networks and so on. * The Russian financial crisis of 1998 resulted in a financial collapse and devaluation of the ruble by 2/3. The domestic producers had to reduce their reliance on imported materials and some foreign competitors exited the Russia market. 2) The fierce competition in Russia * Regional producers, who has a significant cost advantage and are more flexible To meet the market demand in regional areas, become more competitive. they accounted for about 30% of domestic market, a few regional even exhibited aggressive growth in Moscow and other metropolitan markets. * Foreign companies, such as Nestle, have a strong competitive advantage. Nestle has a long-term investment strategy, use local production and supplier to reduce cost, train and develop local staff who has a better understanding of the local market , and develop its own storage facilities, distribution and marketing network.. In addition, Nestle develop product that fit Russian taste and traditions. 3) The weakness of Ice-Fili * Cost disadvantage. High-price raw material, as well as the ice cream equipment, which has to import from other countries; high fixed

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