Group C

James Lee

Ibi Ogungbade

Avery Green

Dejie Li

December 11, 2012

EUPHORIA VS. INDULGENCE

Operations Strategies

UK ICE CREAM Market Information Market Penetration in UK >80% Market Segmentation- take-home sector and

wrapped impulse sector Value > £1.22bn in 2010 an increase of

10.4%since 2006 Sales > 95% from supermarket and 22% from

Ice cream Parlours Tubs and blocks > 40% of the Ice cream

market Premium and Luxury > 12.2% growth in 2010 Supper Premium/luxury brand > Ben and Jerry’s

and Haagen Dazs Premium brands >Carte D’ Or (Unilever),

Wall’s(Unilever) Others >Kelly’s of Cornwall (R&R Ice Cream),

Make's (Mackie’s of Scotland), Baskin-Robbins, Farmhouse Fair, Frederick’s Dairies, Premier Foods, and Yoomoo.

Total UK Expenditure on Ice Cream (£m), 2006-2010

UK Take-Home Ice Cream Subsection

Standard Ice Cream: 15.5%

Luxury/Premium: 35.6%

Multipacks: 48.9%

Source: Consumer Trends, Q4 2010, National Statistics website

Order Qualifiers

QUALITY: (Conformance, Consistency, Aesthetics - taste)FLEXIBILITY: (Mix - product range) DEPENDABILITY: (Ability to keep the promise-Availability)

Brand Shares in UK Tubs and Blocks Ice cream Market in 2011

Source: Mintel

Source: Key Note

Companies Overview Ben & Jerry’s Haagen -Dazs

Founded 1978 Burlington Vermont 1961 ,Bronx, New York

Opened in UK

1994 1987

Countries 26 Countries 54 countries

Parent Company

Unilever (in 2000) General Mills ( in 2001)

Products Sold (Product Mix)

Ice cream Tubs(500ml &150ml) ,sorbets, frozen yogurt, stickbars, cones, sundaes, shakes, In shops[hot drinks & blends –espresso, cappuccino, teas)

Ice cream, Tubs(500ml &100ml) , sorbet, frozen yogurt, sundaes , stickbars ,cones smoothies, (waffle and crepe creations) .In shops[hot drinks & blends –espresso, cappuccino, tea s)

Sales Channel

Supermarkets, groceries stores, convenient stores, B&J Branded vending machines, Petrol Stations, restaurants, Cinemas , franchise and Company owned ice-cream shops , Mail order B&J franchise “scoop shops” (244UK),

Supermarkets, convenient stores, food service channels , HD Branded freezers ,HD shops (flagship)(4UK)

Market Position

Luxury /Super premium (Ranges from children to Elderly )

Luxury /super premium (target 20-39 middle income-wealthy)(wide r 5-59)

Franchise shops

B&J franchise “scoop shops” (244UK), 750 shops worldwide

HD shops (flagship)(4UK) over 650 shops worldwide

Both companies have franchise retailing networks in the UK which will be the main focus of this presentation

The focus will be on business to consumer market

Cost Value Added

Speed NPD Speed

Flexibility New Product

Development

Flexibility New Product

Development Modified Product Resource Mix

Quality Perceived Quality Aesthetics (Taste) (appearance-product

& servicescape)

Quality Perceived Quality

Aesthetics(appearance, Taste)

Ben &

Jerry’sHaagen-Dazs

Order Winners

Ben &

Jerry’s

Flexibility

>NPD

Cost>Value Added

Quality>Perceived

Quality>Aesthetics (Taste and

Appearance

Speed>NPD Speed Haage

n Dazs

Quality>Perceived

Quality>Aesthetics

(Taste, Appearance and Servicescape)

Flexibility>NPD

>Modified Product

>Resource Mix

Order Winners

4 V’s 4 V’s Ben & Jerry’s

Overall Haagen –

Dazs Overall Ben & Jerry’s

ShopsHaagen-Dazs

Shops

Volume Market share 18%, 67.98 million liters in 2011.

Market share 11%,39.71 million liters in 2011.

244 shop , majority in Odeon

4 shops in UK

Variety 41 flavours Ice Cream, tubs(500ml &150ml) ,sorbets, frozen yogurt, stick bars

24 flavor Ice Cream, Tubs(500ml &100ml) , sorbet, frozen yogurt, smoothies, stick bars.

16 Flavours (cups & waffle cones)sundaes, shakes, frozen yogurt, hot drinks & blends –espresso, cappuccino, teas )

24 flavours-(Cups &cones)sundaes, sorbet, frozen yogurt, smoothies,( waffe and crepe creations) , brownies, sundaes . Custom creations, hot drinks & blends –espresso, teas )

Variation In supermarkets and stores demand is more stable

In supermarkets and stores demand is more stable

Higher demand in Summer (good weather) and Christmas. Demand driven by Cinemas. Higher demand on weekends (evening)

Higher demand in Summer (good weather) and Christmas. Dependent on good weather. High demand on weekends (Saturday full)

Variability Standard package products (low in supermarkets )

Standard package products. (Low in supermarkets)

Standard products .Create & custom desserts, choosing from selection of flavours and toppings

Standard products .custom desserts, choosing from selection of flavours and toppings ,special creations

Operations Operations Ben & Jerry’s Haagen-Dazs Difference

Process: Service shop Service shop

Infrastructure: Location

Mainly in Cinemas (Odeon) and Malls with Cinemas (244 in UK)Access to customer

In middle to upper class shopping & entertaining districts (4 in UK)NOT in discount stores/ areas High Traffic areas to build it stores

B&J use the Cinemas to attract customers. HD use the volume of people in middle to upper class shopping Entertaining districts .

Site Cell Layout : small neat site compact sometimes shared with other shops (B&J Costa), Mills cookies) . Inside a cinema complex or Mall .

Individual branded site lager site accommodate both take away (Cell layout) and Restaurants (seats – Fixed layout & Kitchen- Process layout)

HD has a large facility to accommodate restaurant (only 4 in UK).B&J has various (244) facilities at cinemas across the UK

Facilities Cell Layout : Mainly Take away, Ice- cream displayed (Dipping Cabinets) and prepared/customized in front office . Back office used for storage (walk-in freezer) Seats available sometimes but shared with other shops

Both sit-in Restaurant and take away. (Cell Layout) Ice- displayed (Dipping Cabinet) and prepared/customized in front office Back office used for storage (walk-in freezer) and creations. Restaurant: Exclusive Comfortable Seating (Fixed layout )( over 80 ) available with service.

HD has a back office with Kitchen facilities for both storage and making their HD creations. HD –Cell, fixed , process layout) B&J –Cell layout. HD has Resource Mix (staff facilities products)

Capacity :Chase Demand

B&J has 41 flavours , but usually sells 16 based on demand. In off peak periods staff usually multitask

More staff usually work in peak times and other staff multitask in off peak times. Ice cream is restocked when there is an increase in demand.

HD has more staff in their Shops

Demand Management

B&J uses Cinemas to target customers (martini and afternoon performances)

HD has limited edition available for six months to attract new customer to the brand .

B&J -HD – Limits on product offering .

Operations cont’dOperations Ben & Jerry’s Haagen –Dazs DifferenceCustomers:Service encounter

Good service, fun friendly .Not specifically B&J share staff with other brands

Extravagant service : host at entrance waiters service , Friendly and enthusiastic (Feedback survey for service experience ). Focus on couple s

HD has extra focus on service experience (feed-back mechanism). HD has their own staff. B&J Shops share staff with other brands .

Queuing system

Unlimited, FCFS (two cash points in Odeon Guildford when busy)(London one cash point)

Unlimited (FCFS) in take away, (3 cash point-same area)but limited for sit-down restaurant Multiple channels – Waiters about 4 cash points

HD in sit in Restaurant has multiple channels (flexible)

Quality:Inspection

Taste and visual inspection every two days, change stock every 2 weeks. Dipping Cabinets(-14-

17°C) Walk in freezer (-21-

22°C) Back office

HD test Dipping Cabinets(-14-

17°C) Walk in freezer (-21-

22°C) Back office

No major difference

Assurance Use SQC pack (Statistical process control software ) to analyze air into ice cream , mix , volume etc – Ensure uniform high quality

QA– standard procedureQC – from material selections HD test all production steps , ingredients , and taste . ISO 9001

HD put more emphasis on raw material control

Continuous improvement

More flavor s- based on customer taste. Flavours combination

Product Quality and Service level , customer experience Feedback from customer (survey)

HD- service and qualityB&J –flavours –differentiation

Business Model

Super premium markets, focus on children and families (wide coverage)

Speedy transaction process Vast shop coverage, most located in

cinemas and malls Easy accessibility Small sized shops usually Cobranded High level of CSR (Fair Trade)

Franchised shops: smaller servicescapes in convenient locations

Dipping cabinets ( -14-17°C) Walk-in freezers (-21-22 °C) Storage Effective Ordering Process (CRM) Produce and distribute natural ice creams

Novelty, innovative and many selections of Ice Creams

About 41 flavors, In shops 16 flavors Ice cream (tubs, cups, cones) sorbets, frozen yogurt, stick bar, sundaes, shakes, frozen yogurt , hot drinks & blends (espresso, teas)

.

Friendly service and quick service

Fun and relaxing customer experience (Quirky, fun & vibrant, delicious)

Network Architectu

re

Technology

Mark

et

Off

erin

g

Business Model

Luxury/super premium markets, focus on middle class and above

Easy accessibility, convenient and shops are luxuriously decorated

Shops are well staffed (Professional) Effective service capacity Customer feedback program to

keep good customer relationship

Shops : Lager servicescape located at up scale shopping centres and entertainment districts

Dipping Cabinets(-14-17°C) Walk in freezer (-21-22°C) storage Effective Ordering Process (CRM) Limited flavours selections Products are crafted by the purest and finest ingredients

Finest & purest Ice creams

24 flavors ice cream (tubs, Cups & cones) sundaes, sorbet, frozen yogurt, smoothies, sundaes (waffle & crepe creations, Custom creations, hot drinks & blends(espresso, teas)

Extravagance service and interaction (comfortable & elegant seating)

Memorable, fine, customer experience (Exclusive , connoisseur, indulgent, engaging)

Network Architectu

re

Technology

Mark

et

Off

erin

g

Strengths: Donates towards social and environmental causes (CSR) A wide sales coverage providing easy access to customers Novelty flavours NPD, (quirky, fun) New flavors are launched frequently (NPD Speed) Good quality (natural ) and more product offerings Aesthetics –attractive packaging Weakness Focus on delivery rather than service and customer buying experience Health concerns (High milk content) High commodity prices–inputs to ice cream are volatile – high production

cost (but cheaper than Haagen-Dazs) – higher retail prices or reduction in operating profit margin

Strengths: Increased NPD (limited editions), Aesthetics packaging to improve brand recognition Customer focus -customer needs drive strategy –market research

>customer value Luxurious shops atmosphere which improves brand image and loyalty-

customer experience High level of quality of products and service as well as a customer

experience Weakness High commodity prices –inputs (purest and natural ingredients) are

volatile – very high material and production costs - higher retail prices or reduction in operating profit margins

High cost of ice cream - Limited price flexibility to adjustment in customer buying behaviour in challenging economic times

Relatively lower sales coverage in the UK compared to Ben & Jerry’s

Strengths & Weakness

OQs OWs OperationsProcess:• Professional Service • Service shop/Job shop• Mass service

Network Architecture:• Super premium and

luxury market • loyalty customers• Easy access Shops• Professional staff

Market Offering:• Finest and purest Ice

Creams• Extravagant service • Memorable, Exclusive

experience

Technology:• Good Infrastructure-

Larger size facility• Dipping Cabinet • Walk-in freezer • CRM• Limited editions

BusinessModels

+ = Operations Strategies}

Quality:• consistency• Conformance• Aesthetics-

(Taste)

Flexibility• mix – (Product

range)

CI and innovation

Conclusions

Flexibility:• output quality• modified product• volume• resource mix• mix• deliverability• new product• material quality

Dependability:• delivery performance• ability to keep promises• safety• price performance• schedule adherence

Dependability:• ability to keep

promises-(Availability )

Quality:• consistency• conformance• serviceability• perceived• value• Aesthetics

(taste& Appearance)

• technical • performance• features

Infrastructure:• location• site• facilities

Supply chain:• tiers and networks• supplier relationships• procurement policies• integration• logistics

Inventory:• nature of demand• production planning• production control

Capacity:• Level capacity• Chase demand• Demand management

Customers:• service encounter• queuing system• failure and recovery• self service

Quality:• inspection• control• assurance• total quality management• continuous improvement

OQs OWs Operations

Network Architecture:• Super premium

customers • Quick transaction process • wide coverage shops

efficient staff• CSR (Fair Trade)

.

Market Offering:• Novelty , innovative and

Many selections -Ice creams

• Quick service• Fun and relaxing

experience

Technology:• Smaller but convenient

facility • Dipping Cabinet • Walk-in freezer • CRM• Natural Ice creams

BusinessModels

+ = Operations Strategies}

ubiquitization

Conclusions

Quality:• consistency• Conformance• Aesthetics-

(Taste)

Flexibility• mix – (Product

range)

Dependability:• ability to keep

promises-(Availability )

Cost:• manufacturing• service• running• selling price• Value added

Quality:• consistency• conformance• serviceability• perceived• value• Aesthetics

(taste& Appearance)

• technical • performance• featuresFlexibility:• output quality• modified

product• volume• resource mix• mix• deliverability• new product• material qualityDependability:• delivery performance• ability to keep promises• safety• price performance• schedule adherenceSpeed:• delivery speed• production speed• NPD speed• delivery frequency• quote generation

Process:• Professional

Service • Service shop/Job

shop• Mass service Infrastructure:• location• site• facilitiesSupply chain:• tiers and networks• supplier

relationships• procurement

policies• integration• logisticsInventoy:• nature of demand• production

planning• production controlCapacity:• Level capacity• Chase demand• Demand

managementCustomers:• service encounter• queuing system• failure and recovery• self service

Quality:• inspection• control• assurance• total quality

management• continuous

improvement

References:

Business model definition available at:http://www.investopedia.com/terms/b/businessmodel.asp#axzz2ESsbHFy3 (accessed at

Nov 20,2012)  Ben and Jerry’s information available at:www.benjerry.co.uk ( accessed : Nov.20,2012) Haagen-dazs information available at:http://www.haagen-dazs.co.uk/UK_Home/ ( accessed: Nov.20,2012) Logos of Ben and Jerry’s available at:www.google.co.uk ( accessed: Dec.2 ,2012)  Franchise shops information available at: http://www.discoverindulgence.com/en/Global/Find/Europe/United+Kingdom/London/Leicester+Square.aspx

(accessed: Dec 2, 2012)  Slack et al.,1995 Operations strategy model available at:http://www.emeraldinsight.com/journals.htm?articleid=850851&show=html ( accessed:

Nov 25,2012)