Ice fili case study
Only a high difference in price will deter a buyer from getting the product. The second group delivers to gastronoms and minimarkets. The purchasing power of the consumers of ice cream products are influenced by various factors such as the quality of the products, the relative volume of purchases, switching costs and the standardization of the products. High barriers lower the threat of new entrants. They even develop totally new equipment which is partly financed by ice cream producers. As such, ice cream producers will need to re-evaluate their profit margins by focusing on how distribution costs will change to support the growth of in-home production. 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. Threat of new entrants: In any industry the threat of new entrants is always in place, however, in the Russian ice cream industry the new entrant threat is high because the barriers to entry are low. When doing the analysis, I found that a high threat of new entrants, low power of ingredient suppliers and high power of equipment suppliers, high buyer power, high threat of substitutes, and a high degree of rivalry contribute to the Russian ice cream market.
In recent years the domestic suppliers are evolving fast and their technological standard rises. It has also adjusted the taste of its products to Russian conditions and sells its brands at average prices.
Unlike Ice-Fili, these foreign rivals also use lower quality ingredients which translate to lower production costs. The many small competitors make it difficult to address them all and attack them with a concerted marketing campaign.
Now it will be look at the threat of rivalry for Ice-Fili coming from established competitors in the industry. Ice-Fili has contracts with dozens of such companies.
However, there has been increasing competition from regional companies and foreign producers of ice cream, leading to erosion of the market share of Ice-Fili in the recent years. The fourth and last group are the international buyers.
This could enable the new company to increase its market share, pool its resources and thereby reducing costs and a possible expansion into previous explored or unexplored markets.
Though this decision will require some start-up investment costs in the form of man power, design and creative technology, it would also allow the company to diversify their assets and leverage their resources in the highly competitive ice cream market.
based on 6 review