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Wednesday, January 11, 2012

Essay on Project Management for Ben & Jerry

 Essay on Project Management for Ben & Jerry

  There are companies which are known for their aggressive business strategies and anti-union and anti-employee policies.  At the forefront of these companies are companies like Wal-Mart.  There are also companies which strive to give back something to its employees, the community and to the environment as well.  At the forefront of these companies are companies like Ben & Jerry Homemade Inc (Ben & Jerry).  Ben & Jerry is known not only for its super premium ice cream and yogurt.  It is also known for its unselfish devotion to its employees, to its community and to its environment.  This essay seeks to analyze and examine Ben & Jerry, its history, its mission statement, its corporate strategies, its strengths and weaknesses, and the strategies to sustain its industry leadership. 

Company History of Ben & Jerry’s Homemade Inc.     
            Ben & Jerry’s Homemade Inc. is one of the world’s leaders in super premium ice cream, frozen yogurt and ice cream novelties that come in rich and original flavor (“Ben & Jerry’s Homemade Inc.: Company History”, p.1).  It was founded in May 1978 when Ben Cohen and Jerry Greenfield started an ice cream shop in Burlington, Vermont.  At the time, they had no plans of hitting it big as businessmen.  The two friends decided that they wanted to do something new and fun.  They chose to start an ice cream shop and completed a $5 correspondence course in ice cream making (“Ben & Jerry’s History”, 2000, p.1).  With only $12,000 as capital they went on their way and started the Ben & Jerry’s Homemade Inc.  There were not aware that they will become an important part of America’s history for their business acumen and philanthropic activities.   
            The first Ben & Jerry’s store was located in an old gas station which they subsequently rented and renovated.  Initially, they offered 12 flavors which were made using an old fashioned ice cream maker and locally produced milk.  The owners’ idea was merely to do something new and exciting.  They merely wanted to have fun selling ice cream which is evident in the names of their products such as “Half Baked”, “Cherry Garcia” and Phish Food.” Their creativity and unique presentation soon attracted the attention of customers and immediately gained loyal following.  By 1978, they started launching their marketing gimmicks to make their products more famous such as holding free summer movie festival and constructing one of the world’s largest ice creams in Vermont (“Ben & Jerry’s History”, 2000, p.3). In 1980, the partners started selling their ice cream to different restaurants in the Burlington area.  In 1982, Ben & Jerry’s first gained recognition when Time magazine hailed their ice cream as ‘the best ice cream in the world.’  (“Ben & Jerry’s History”, 2000, p.3).  Soon, they started to expand their operations beyond the state of Vermont.   
            As Ben & Jerry’s continued to grow, they realized that their small business has become successful.  At first, they became apprehensive however about their company’s success.  They thought that they were no longer ice cream men who wanted to share their ice cream to the community but they had become businessmen.  They feared that they might become similar to owners of big businesses which think only of maximizing their profits.  They eventually committed themselves never to use their new-found success to exploit their workers and the community.  They wanted to become a force for positive change in the community (“Ben & Jerry’s 1995 Annual Report” p.2).  The partners soon agreed that they will commit themselves to giving something back to their community.  They also devised means by which they could help improve the welfare of their employees. 
            As demand increased, the partners raised their capital by selling stock to the public.  They however limited their stock offering to residents of Vermont.  They used the proceeds of the sale to construct new plant and corporate headquarters at Waterbury, Vermont.   In 1984, Ben & Jerry’s rapid growth attracted the attention of its prime competitor, H&aumlèn-Dazs.  As a result, Pillsbury, the corporate parent of H&aumlèn-Dazs, started protecting its own market share by threatening to withhold its products from distributors who sold Ben & Jerry’s ice cream.  Ben & Jerry’s responded by means of publicity campaign and by filing a suit in court.  They won the suit and Pillsbury was stopped from threatening its distributors.  By the end of the year, Ben & Jerry’s sales reached $4 Million which is twice its previous year’s earnings.  The earning was further increased in 1985 to $9 Million. 
            In 1986, Ben & Jerry’s contacted Dreyer’s Ice Cream to manufacture Ben & Jerry’s ice cream in its plants and distribute its products to those in other states.  Ben & Jerry’s unprecedented growth continued posting $20 Million in sales in 1986. 
            Despite its success, Ben & Jerry’s did not forget its social responsibility. In its manufacturing plant, Ben & jerry’s began using its ice cream waste to feed pigs being raised on a farm.  It also introduced a variety of programs in its plants to keep the employees well motivated by allocating time for celebrations and gatherings like Elvis day and Halloween costumes. 
            Ben & Jerry’s also expanded its product line to meet the ever increasing demand from its customers.  It was able to release different ice cream novelties majority of which were accepted by its customers.   In 2002, it sales exceeded $260 million.  By this time it was supplying super premium ice cream in selected foreign countries, supermarkets, grocery stores, convenience stores, Ben & Jerry’s franchised scoop shops, and restaurants (Pamela Accetta Smith, 2003, p.1). 
            In April 2000, Unilever acquired rights to Ben & Jerry’s in exchange for $326 Million.  According to Ben Cohen and Jerry Greenfield, Unilever which shares similar philosophy with Ben & Jerry’s is committed to continue its corporate philosophy as it attempts to expand the brand’s operations internationally (Constance L. Hays, 2000, p.1).  Under an independent Board of Directors, the challenge for Unilever is to grow Ben & Jerry’s internationally in direct competition with other brands.  Unilever believes that Ben & Jerry’s will play an important role in the premium ice cream industry.  As of now the global ice cream market is worth an estimated $54.7 Billion while Ben & Jerry’s only comprise 0.8% (“M&A Case Study – Ben & Jerry’s: A Big Dollop of Investment”, 2005, p.2).

Ben & Jerry’s Mission Statement
            Ben & Jerry’s Mission Statement is the sum total of its unique corporate philosophy.  It is the company’s way of showing to its customers that they are not only selling ice cream to earn profit.  Rather, they seek to help enhance the lives of individuals and communities through their company.  
            Its Mission Statement consists of three (3) interrelated parts: Product Mission, Economic Mission and Social Mission.  Its product mission is to make, distribute & sell the finest quality all natural ice cream & euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the Earth and the Environment (“Our Mission Statement: Ben & Jerry’s”  p.1).  Its economic mission is to operate the Company on a sustainable financial basis of profitable growth, increasing value for our stakeholders & expanding opportunities for development and career growth for its employees “Our Mission Statement: Ben & Jerry’s”  p.1).  Its social mission is to operate the company in a way that actively recognizes the central role that business plays in society by initiating innovative ways to improve the quality of life locally, nationally & internationally “Our Mission Statement: Ben & Jerry’s”  p.1).

Company Strengths
            Ben & Jerry’s is known for its product innovation and brand differentiation (Pamela Accetta Smith, 2003, p.1).  Ben & Jerry is currently the world leader in super premium ice cream industry.  It also has a variety of products depending on the person’s mood (Stephanie Thompson, 2005, p.1).  While it is true that producing super premium ice cream is a risky strategy as it is not only more expensive but it also limits its target consumers to a narrow segment of the population, Ben & Jerry, has had significant success with this strategy.   I had been able to gain competitive advantage against its competitors because of its ability to offer consumers something that is appealingly different from its rivals.  It also boasts of having innovative super-premium ice cream flavors that taste better and consist of all natural, high quality ingredients.  
            Strong brand differentiation is also a strategy adopted by other companies in different industries.  One of these companies is Abercombrie & Fitch Co. (A&F).  It has not only established a strong brand image but it has also been able to protect its image over the years.  A&F also boasts of sticking to its full price strategy to maintain the “aspirational nature of the company’s brand.” (“Abercrombie & Fitch F4Q07: Earnings Call Transcript” 2)   Despite the attractiveness of lowering its product price to increase its customer-base and drive clients to its stores, Michael Jeffries, Chairman and CEO, has always been adamant in saying that “Demand is not elastic for A&F merchandise, and promotional strategies merely work to cheapen the aspirational nature of the brand.” 
            Ben & Jerry’s second strength is its positive brand image resulting from the management’s deliberate attempt to become socially responsible and to give back to the society.  Not all businesses function similarly as Ben & Jerry’s. Most, if not all, operate exclusively on the mantra of maximizing profits.  The traditional thinking was that a company is socially responsible so long as it is able to create jobs (“Ben & Jerry’s: A Model of Corporate Social Responsibility” p.2).  It does not matter whether it is selling its goods or service at high prices to earn as much profit as it can.  
            Thirdly, the acquisition by Unilever of Ben & Jerry’s shall add the necessary capital that will boost its international operations.  According to Richard Goldstein, President of Unilever Foods North America, “Unilever believes the superpremium segmet of the ice cream market will continue to grow and that Ben & Jerry’s will lead that growth.” (Warran Thayer, 2000, p.1)
            Fourth, Ben & Jerry revolutionized this perception and adopted a model for other companies to follow.  For the owners, business is a power that has responsibility for the welfare of society as a whole.  Among its endeavors is its generosity to charitable organizations by giving of 7.5% pre-tax profits as compared to an average of 1% for an average American corporation.  Aside from giving free ice cream during special events, the company also has Corporate Giving program where it matches each dollar contributed to non-profit, charitable organization by employees. 

Company Weaknesses
            One disadvantage of offering high quality super-premium ice cream is that it is very expensive compared to the economy and regular types of ice cream.  Since their products are expensive then it follows that not all persons can buy the ice cream on a regular basis.  When a company limits its customers to a narrow segment of population, then there is always the possibility that these customers may someday find Ben & Jerry’s products unappealing.  Because of its limited market, it is possible that time may come when Ben & Jerry’s may saturate its market.  It is also possible that in time of financial crisis, customers may want to cut back first on consumption of non essential products such as ice cream or others may shift to cheaper brands.  This is a reality that the company must confront in this hard and difficult time.  While it may be true that they have high profit margin for every product and that they need not mass-produce a product to earn substantial revenues that point is that its customers are limited and its growth may be impeded.  Taking this into account, it is suggested that as part of its contingency measures, it should take steps to introduce a variety of regular ice cream into the market and sell the same at cheaper price.  The introduction of regular ice cream into the market may be attractive for a large segment of the population who wants to try the taste of Ben & Jerry’s ice cream but could not afford it.   
            On the aspect of being a socially responsible corporation, Ben & Jerry’s has helped so many people within their community.  It has also helped in preventing the destruction of the environment.   However, Ben & Jerry must come to terms with the reality that while sharing to the community is an act which is worth emulating, it is not sustainable.  In this time of financial crisis, it could not continuously sustain its socially responsible activities without hurting the company.    
            It will be safe to say that no matter how organized and how creative a business entity is a corporation can only achieve its goals and objectives through its workforce.  A corporation cannot just neglect the people aspect of its organization and expect to become a success and reap profits.  Recruitment and Retaining employees could spell difference between surviving and closure business.  Thus Geri Puleo states that “Recruitment and retention are the building blocks of a successful business strategy.” (Puleo p.2).   Recruitment is always an important element in the continuous renewal of any organization. Because of recruitment an organization is able to bring in new ideas, skills and points of view.  There are however several challenges that Human Resource Managers must address: a) looking for an employee who not only has the skill but the personality to fit in the organization; b) flexibility; c) where to look for applicants.
            Recruitment concern is even more complicated for a company like Ben & Jerry’s.  Firstly, it has a reputation of being an anti-establishment and values-driven company.  While this may be appealing for some potential applicants, some may be turned off by the anti-corporate culture in Ben & Jerry’s.  Looking for skilled and flexible employees is difficult already.  Finding people who will fit in Ben & Jerry’s unique corporate culture is a serious challenge. 
            In looking for potential applicants, Ben & Jerry’s emphasize the importance of people who are entrepreneurial, creative and willing to go the extra mile.  They also want people who are willing to treat the company as if it is their own.  Ben and Jerry’s found the solution to their recruitment concerns when they utilized Thomas’ Tests for Selection and Training (TST) in conjunction with their online Personal Profile Analysis in screening and recruiting top candidates.   According to Matt Fullbrook, Sales Director of Ben & Jerry’s, using a tool such as Thomas’ PPA gives you questions to ask and areas to probe to get a much better idea of their real strengths and limitations and the areas they might struggle with. The sales role at Ben and Jerry’s is a very diverse one, with a lot of plate spinning involved. They need to be able to participate in anything from wholesaler relationship building days, to negotiating terms and conditions, to national pricing and strategy.”  TST measures the ability of an applicant to reason on the spot and to solve unfamiliar problems.  It determines whether the applicant has the ability to quickly learn and to retain new skills.  Fullbrook emphasized that they recently tried the TST as they were choosing between two potential candidates.  The two candidates had the same profile they were looking for and so the HR required them to undergo TST.  They were surprised to find that based on the TST the candidate they preferred will not fit for the job.  As a result they went for the person who scored better in TST and it has proved to be very beneficial for the company. 

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