Ben and Jerry's Case Analysis Essay

1694 Words Jul 17th, 2006 7 Pages
Ben & Jerry's Case Study

Company History

Ben Cohen and Jerry Greenfield founded Ben & Jerry's Homemade Ice Cream in 1978. Over the years, Ben & Jerry's evolved into a socially-oriented, independent-minded industry leader in the super-premium ice cream market. The company has had a history of donating 7.5% of its pre-tax earnings to societal and community causes. Ben and Jerry further extended their generosity by offering 75,000 shares at $10.50 per share exclusively to Vermont residents, so that they may help those who first supported the company; Ben and Jerry's wanted residents to profit from their venture as well. In addition, steady growth and a widely recognized brand name helped Ben and Jerry's obtain 45 percent of the
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Ben and Jerry's succeeded in ranking among the first ice cream makers, at the expense of other competitors such as Frusen Gladje and Steve's.

External Environment

Currently, the economy is strong, because consumers can afford the luxury of indulging in super-premium ice cream. However, the economy is not so strong that current Ben & Jerry's employees can afford to take an unwanted cut in salary. In addition, the social message behind the Ben & Jerry's band is becoming well known through a variety of advertising methods.

Problems

How can Ben Cohen and Jerry Greenfield maintain their firm's ideology and core competencies while facing dramatic changes?

There are several problems which have stemmed from the very core competency that has brought Ben & Jerry's so much success. For instance, one of the social measures that embodies the spirit given by Ben Cohen to his company is the 5-to-1 salary ratio (between the top management and the lower level employees), which pretends that all the people working at Ben & Jerry's contribute to its success. This social model raises a range of problems: difficulty hiring highly skilled management because of low salary offerings and the poor perspectives (26% of employees are not happy with their pays); the lack of top managers creates stress and disorganization; the high growth of the firm transformed it in a highly complex structure, in which the rule is very hard to

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