Ice Fili Harvard Case

1299 Words Apr 17th, 2013 6 Pages
ICE-FILI CASE

1 - How attractive is the Russian ice cream industry in 2002?

The main data about the attractiveness of this market are:
- The consumption is about 6 times lower than in France, Canada, US because of a different mode of consumption. Indeed, Russians consider Ice Cream as an “on the go” snack and not as a dessert they can have at home.
- producing in Russia implies a certain adaptability of recipes since traditional Russian ice creams contain less fat and are made with natural ingredients plus one must take into account the high seasonality of consumption.
- While the demand for beer, soft drink and confectionary industries is increasing, the demand for ice cream and therefore its production keep on decreasing.

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¤ Differentiation of rival products/services : as there are no clear differentiations between the products/services offered, the competition is likely to be more intense. ¤ Brand equity : Some brands in the market have a higher perceived value than others since they produce a lot of other products ¤ Level of advertising expenditure : Brands as Ben&Jerry’s, Baskin-Robbins and Nestlé have access to greater financial resources to spend on advertising.

BARGAINING POWER OF BUYERS: ¤ Buyers’ price sensitivity: we learned that only a 50% price would make a difference in consumer’s purchasing behavior. ¤ Product differentiation : if there is a relatively small number of ice cream products comparing to foreign countries, the fact there are still about 200 varieties involves that buyers can easily purchase any product from a brand or another. ¤ Information : access to information about products and other suppliers is easy, that strengthens their power.

BARGAINING POWER OF SUPPLIERS: ¤ forward integration : strong alliances between some buyers and some suppliers do not seem to exist ¤ the concentration of suppliers : zs there are a lot of suppliers of ingredients and as equipment can be imported for many other countries, the bargaining power of suppliers is rather low

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