Ice Film
Ice-Fili Analysis
Table of Contents
I- Introduction 2
II- Analysis 3
1- External Analysis 3
i) Porter’s 5 Force 3 ii) Key Success Factors 4
2- Internal Analysis 5
i) Value Chain Analysis 5 ii) Financial Analysis 6
III- Decision Opinions with Evaluation 6
IV- Recommendation and Implementation 8
1- Short Term Activities 8
2- Long Term Activities 9
V- Exhibits 10
i) Exhibit A: Financial Ratio Analysis and Calculations 10 ii) Exhibit B: Decision Matrix 11
Introduction
First time winner of the “Product of the Year” category, Ice-Fili, is the top ice cream producer in Russia. Recently, the company is experiencing tough competition by Nestlé and regional ice cream producers. Ice-Fili’s current problem is its loss in market share due to their poor quality decision-making after Russia became an open-market in 1992. Nestlé took advantage of Ice-Fili’s low reaction adjustment and is taking over their market. What should be Ice-Fili’s next move? To offer proper advice, an external and internal analysis should be conducted to analyze their environment.
Analysis
EXTERNAL ANALYSIS
An external analysis allows us to understand the ice cream industry. It includes analyzing Porter’s 5 forces and Ice-Fili’s key success factors in comparison to its competitors.
Porter’s 5 Forces
1- Threat of New Entrants High
The ice cream market is attractive due to its 15% to 20% profit margin and low initial capital investment. Ingredients are acquired at low cost because of their commodity nature. Also, the final product and production process are similar among producers. Products may be easily copied making differentiation difficult to obtain. It is easy to get through customers and retailers as numerous distribution channels available.
2- Bargaining Power of Suppliers Ingredients: Low & Equipment: High
Identical ingredients may be purchased from numerous suppliers. Changing supplier may be done easily with a low switching cost. However, only 10 companies
Table of Contents
I- Introduction 2
II- Analysis 3
1- External Analysis 3
i) Porter’s 5 Force 3 ii) Key Success Factors 4
2- Internal Analysis 5
i) Value Chain Analysis 5 ii) Financial Analysis 6
III- Decision Opinions with Evaluation 6
IV- Recommendation and Implementation 8
1- Short Term Activities 8
2- Long Term Activities 9
V- Exhibits 10
i) Exhibit A: Financial Ratio Analysis and Calculations 10 ii) Exhibit B: Decision Matrix 11
Introduction
First time winner of the “Product of the Year” category, Ice-Fili, is the top ice cream producer in Russia. Recently, the company is experiencing tough competition by Nestlé and regional ice cream producers. Ice-Fili’s current problem is its loss in market share due to their poor quality decision-making after Russia became an open-market in 1992. Nestlé took advantage of Ice-Fili’s low reaction adjustment and is taking over their market. What should be Ice-Fili’s next move? To offer proper advice, an external and internal analysis should be conducted to analyze their environment.
Analysis
EXTERNAL ANALYSIS
An external analysis allows us to understand the ice cream industry. It includes analyzing Porter’s 5 forces and Ice-Fili’s key success factors in comparison to its competitors.
Porter’s 5 Forces
1- Threat of New Entrants High
The ice cream market is attractive due to its 15% to 20% profit margin and low initial capital investment. Ingredients are acquired at low cost because of their commodity nature. Also, the final product and production process are similar among producers. Products may be easily copied making differentiation difficult to obtain. It is easy to get through customers and retailers as numerous distribution channels available.
2- Bargaining Power of Suppliers Ingredients: Low & Equipment: High
Identical ingredients may be purchased from numerous suppliers. Changing supplier may be done easily with a low switching cost. However, only 10 companies