Ice-Fili Case Study

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Attractiveness of the Five Forces Framework in the Russian Ice Cream Market
Although the Russian ice cream market may initially look attractive due to its consistent growth in ice cream production/demand in recent years, after evaluating the market through the five forces framework, it becomes clear that the market far from attractive.
Since the open market economy was first introduced to Russia in 1991, ice cream producer competition has more than tripled in sized to 300 firms by 2002. Significant funding would be required for ice cream manufacturing/distribution and a new entrant would also need to consider the market’s pre-existing loyalty to domestic brands. There is also a luxury tax associated with ice cream production, which
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Though there have been numerous competitors who have entered the market, since 1997 not only has production continued to rise, but ice cream consumption by volume and per capita has increased as well over this time period. This is particularly interesting when considering that the population of Russia has consistently fallen since 1990, which displays that either the market itself is expanding to new clientele and/or ice cream customers are consuming a consistently elevating amount. With the possibility of expanding competition through marketing warfare, the market of customers will continue to grow with more potential to brand as well as steal/develop more market share. As market and differentiation advantage is more readily established, there will naturally be the elimination of smaller competitors who cannot compete in marketing funds nor have established themselves in serving a customer niche. The introduction of new distribution through supermarkets will also assist in market expansion by making the ice cream more convenient for year-round availability as well as less impulsive demand buyers. The supermarket as well as brand innovations are seemingly switching customers in a direction away from just kiosk buying but that of home consumption, which will create a new level of consumer loyalty and buyer maturity as well as increased gross profits potentially.

Sources of Competitive Advantage in the Russian Ice Cream

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