Ice-Fili Case Analysis

The bargaining power of suppliers is low because of the presence of powerful buyers who are able to direct terms to the suppliers who are generally small firms. Besides these suppliers of tires, parts, electronic, mechanical equipment are small players and may have only one or two clients (ancillaries).

Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.

Production operations played a huge role on whether to allow more production in North America, or more in Europe-Africa. After many decisions, we begun to notice that North America, and Europe-Africa were our main consumers and had stronger demands for our products, we suddenly realized that we should offer the other more compensation to raise the production. We than decided to offer Asia-Pacific, and Latin America a larger discounts, and longer return dates, to increase the demands.

Here is a résumé of the Five forces model of the ice cream industry in Russia:

Introduction From 1996 to 1998 Ice-Fili suffered from huge increases in costs that gradually ate at their margin at alarming rates. Even worse, from 1999 to 2001 they had a huge decrease in sales and got into liquidity problems. The economic situation for Fili seems to be doomed even more when you add growing and strong competitors to the mix. But what caused all this? In the following problem analyisis, we will discuss basically 4 categories of issues that Ice-Fili is undergoing:

To achieve that Ice-Fili will highlight its main asset: the fact that their ice creams are made using only natural products. This corresponds perfectly to the needs of Russian consumers and this is a very differentiating element with respect to its competitors.

Nestle, an international recognized multinational corporation is the world’s leading nutrition, Health and Wellness Company. Nestlé’s mission of “Good Food, Good Life” aims at providing customers with the finest quality of nutritional choices within a wide range of food and beverage classifications (NESTLÉ - Vassos Eliades. (n.d.). Retrieved from http://www.vassoseliades.com/consumer-goods/nestle.html, para. 1). The merger in 1905 between Nestle and the Anglo-Swiss Milk Company created the Nestle we know today. Nestle is one of the world’s largest suppliers of food and nutritional products operating with 461 factories in 83 countries, with 328,000 employees worldwide (Fries, Lorin, Goldberg, Ray, 2012. Nestle: Agricultural Material

Considering the fact the Soviet Union has a command economy, no one have the incentives to produce supplementary parts because the producers earn no profit from doing it. Since the government decides how much to produce, most of the times they would underestimate how much consumers need. Mangers of tractors factories are only paid by the required amount they need to produce, such as foods stamps or coupons and nothing more. The “bizarre incentives” that Roberts and LaFollette refer to is how the people have no motivation to produce more than what they are told to do since they receive the same payment even if they make extra. This means that they have no incentives to do better or even work harder. There are no factories specifically for the

There was a dramatic drop in ice cream companies from 1991 to 1992. The output fell to levels last experienced in the early 1970s. Foreign ice cream companies, including Ben & Jerry’s, Baskin & Robbins, Nestle, and Unilever, all poured into to Russian market to capitalize on the open market opportunity. This show Ice-Fili’s technology were same as before that way new competitor enter in Russia as a result.

We at Temple Consulting have completed an analysis of Ice-Fili’s current corporate standing using data collected over the past several years. Using tools such as Porter’s Approach and SWOT we have analyzed the internal and external environments and have recommended several strategic plans of action. Current areas for improvement such as marketing initiatives and re-evaluation of distribution channels will increase sales and profitability almost instantly. Long term plans such as lobbying against luxury tax on ice cream, partnerships with franchise vendors, and bringing new products to the market, performing an IPO, and planning more global efforts will help keep Ice-Fili rooted as the

The attractiveness of the Ice Cream Industry will be evaluated with Porter’s five forces analysis (Kotabe and Helsen, 2010).

At the moment the organization contains more than 50 thousand people who are working at 150 enterprises worldwide, with 8 billion dollars of annual turnover. The fact is that, the majority who heard about the Ingersoll-Rand company considers that this company is a manufacturer of the equipment for the mining industry and construction, although this firm is also the world's largest supplier of advanced technologies with the famous trademarks which is taking the leading positions on the market of the industrial equipment.(Ingersoll Rand, 2016)

After the financial crisis in 1998 and the decrease of imported ice cream, the market offered good opportunities for new domestic entrants. They often already owned the facilities where they produced for example frozen food and so it was relatively easy to change to ice cream production. With the needed assets they already possessed they did not face economies of scale and high initial costs as barrier to entry. And the new regional producers try to compete with the product differentiation by selling cheaper “no name” brands. The threat of entry from international producers could also rise again, if the Russian economy seems to be stable again.

The paper provides analysis of Ice-Fili, and the paper reveals that Ice-Fili is one of the important ice cream producers in Russia. However, the entrant of foreign ice cream producers such as Nestle has made Ice-Fili to face stiff competitions within the industry. Porter five analysis reveals that Ice-Fili has not been able to compete effectively with foreign companies because the company still relies on imported equipment and technology and traditional method of production, which lead to high cost of production.

If suppliers are limited, they have a greater opportunity to charge higher prices for raw materials, and they may also pose a threat of forward integration to the industry.  Similarly, if an industry has few buyers, or buyers can cheaply and easily change suppliers, they can make demands for less expensive higher quality products, causing impact to profit (Porter, 2008, p. 83).