Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door
Ben Cohen and Jerry Greenfield were best friends and socially conscious entrepreneurs when they founded Ben & Jerry's Homemade in the 1970s in Burlington, Vermont. The company was well-known for being offbeat, quirky, and committed to socially responsible ventures and using organic ingredients in its products. When the company went public in 1984, most people bought the stock because they believed in the company's values and mission. In late 1999, the financial and economic world was quite different, and two suitors-Unilever and Dreyer's Ice Cream-appeared, both very interested in acquiring Ben & Jerry's. This case describes not only the background and history of Ben & Jerry's, but the factors involved in the founders' having to decide what course of action to take.
Authors :: Robert J. Sack, Pat Werhane, Jenny Mead
Swot Analysis of "Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door" written by Robert J. Sack, Pat Werhane, Jenny Mead includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ben Jerry's facing as an external strategic factors. Some of the topics covered in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door case study are - Strategic Management Strategies, Corporate governance, Financial markets, Growth strategy, Mergers & acquisitions, Negotiations, Public relations, Social responsibility and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door casestudy better are - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ben Jerry's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ben Jerry's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door can be done for the following purposes –
1. Strategic planning using facts provided in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door case study
2. Improving business portfolio management of Ben Jerry's
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ben Jerry's
Strengths Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ben Jerry's in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door firm has clearly differentiated products in the market place. This has enabled Ben Jerry's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Ben Jerry's to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Ben Jerry's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Ben Jerry's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Ben Jerry's is present in almost all the verticals within the industry. This has provided firm in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Ben Jerry's in the sector have low bargaining power. Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ben Jerry's to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Ben Jerry's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ben Jerry's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Ben Jerry's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Ben Jerry's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Ben Jerry's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert J. Sack, Pat Werhane, Jenny Mead can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Ben Jerry's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Ben Jerry's is one of the most innovative firm in sector. Manager in Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door are -
Need for greater diversity
– Ben Jerry's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Ben Jerry's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Ben Jerry's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ben Jerry's to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Ben Jerry's products
– To increase the profitability and margins on the products, Ben Jerry's needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Ben Jerry's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Ben Jerry's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door, is just above the industry average. Ben Jerry's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door HBR case study mentions - Ben Jerry's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door, in the dynamic environment Ben Jerry's has struggled to respond to the nimble upstart competition. Ben Jerry's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ben Jerry's has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ben Jerry's supply chain. Even after few cautionary changes mentioned in the HBR case study - Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ben Jerry's vulnerable to further global disruptions in South East Asia.
Opportunities Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ben Jerry's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ben Jerry's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ben Jerry's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ben Jerry's is facing challenges because of the dominance of functional experts in the organization. Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ben Jerry's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ben Jerry's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ben Jerry's to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Ben Jerry's has opened avenues for new revenue streams for the organization in the industry. This can help Ben Jerry's to build a more holistic ecosystem as suggested in the Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door case study. Ben Jerry's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ben Jerry's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ben Jerry's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Ben Jerry's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Ben Jerry's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Ben Jerry's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Ben Jerry's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Better consumer reach
– The expansion of the 5G network will help Ben Jerry's to increase its market reach. Ben Jerry's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door are -
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ben Jerry's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Ben Jerry's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ben Jerry's in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ben Jerry's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ben Jerry's in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Consumer confidence and its impact on Ben Jerry's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Ben Jerry's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ben Jerry's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door .
Shortening product life cycle
– it is one of the major threat that Ben Jerry's is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Ben Jerry's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ben Jerry's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ben Jerry's business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Ben & Jerry's Homemade, Inc. (A): Acquisition Suitors at the Door is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ben Jerry's needs to make to build a sustainable competitive advantage.
