Ice-Fili Done - MGT 5794 Strategic Management Spring 2006...

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MGT 5794 Strategic Management Spring 2006 Ice-Fili: Winning Strategem in a Contemporary Venue -Team 5- 900-22-7377 904-46-8228 904-47-4673 904-50-0701 904-50-7922 904-52-3718 February 13, 2006
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Executive Summary Ice-Fili had been successful in the past, surviving various tumultuous times including the transformation of the Russian closed economy into an open economy and the financial crisis in 1998. As Russia’s largest domestic ice cream producer, they had held onto their market leadership for many years. However, increasing competition from foreign companies, along with the emergence of regional producers of ice cream led to Ice-Fili’s market share erosion in the recent years. Porter’s five forces model was the primary method to analyze Ice-Fili’s industry and its competitiveness in the industry. Segmentation analysis was used for further study of the ice cream industry in Russia. The analysis was carried on key variables like distribution channel, buying behavior, geographic locations, and product characteristics. Based on this model, various alternatives were considered. From these alternatives, it was possible to form a recommendation: Ice-Fili will need to focus on the strengthening of its distribution channel through various efforts including marketing and raising of capital while focusing on its long history and brand recognition. Above all, availability of its product to the consumers is the key to Ice-Fili’s success. 2
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Porters Five Forces In order to analyze the industry and environment of Ice Fili, Porter’s five forces model will be used to assess its competitiveness in the market. An illustration of the model specific to Ice Fili is displayed in Exhibit 1 . The analysis will lead to the identification of various opportunities for Ice Fili, along with determination of the most appropriate strategy and associated milestone for the strategy. Buyers are people or organizations who create demand in an industry. If buyers have significant bargaining power, industry returns can transfer to buyers in the form of lower prices. Buyer power is determined by various factors such as switching costs, the relative volume of purchases, the standardization of the product, elasticity of demand, brand identity, and quality of the products. Buyers are presented with many choices when selecting a product in the ice cream industry while distributors have the power to decide which products will be available to customers. Absence of preservatives and a high proportion of milk fat differentiate the domestic Russian ice cream from the foreign producers’. However, due to a vast number of similar products and the lack of protection for innovation leads to indifference between various domestic products. Customers are able to substitute one brand of ice cream to another or from ice cream to other foods altogether at any point in time. Pricing information is also readily available to customers and only large differences in price will affect the customers’ buying behavior. It
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This note was uploaded on 05/23/2010 for the course MGT 5794 taught by Professor Deneffe during the Fall '10 term at Hult International Business School.

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Ice-Fili Done - MGT 5794 Strategic Management Spring 2006...

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