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The Report of Ben&Jerry's Ice Cream Company

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I hope this will help whoever is preparing for MBA. I wrote this report for my Integrated Business Skills class at Studies in American Language at San Jose State University. I would like to thank ...

I hope this will help whoever is preparing for MBA. I wrote this report for my Integrated Business Skills class at Studies in American Language at San Jose State University. I would like to thank Sarah Dreger Fattarsi for being a great teacher. You can also find the presentation at http://www.youtube.com/watch?v=1hz_zvxnqnY. It was my first presentation in English. There is also PowerPoint Slides here.

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The Report of Ben&Jerry's Ice Cream Company The Report of Ben&Jerry's Ice Cream Company Document Transcript

  • ENTREPRENEUR PROJECTBEN & JERRY’S HOMEMADE ICE CREAM COMPANY Firat Sekerli Integrated Skills / MBP Sarah Dreger October 10, 2009
  • AbstractAfter I researched entrepreneurs on the Internet, I was interested in Ben & Jerry’s because thefounders of this company are childhood friends. I want to start a business with my friend, but myparents say that friends cannot establish a company. I thought this company is good to prove myparents how friends can be successful together.Introduction Ben Cohen and Jerry Greenfield met in the seventh-grade gym class, and they worked asdirect mail sorters for Ben’s father during the summer. Ben Cohen found a job in his senior year,and he drove an ice cream truck and sold it. After graduating from high school, they wanted togo to college because they thought that going to college was the best way to stand on their ownlegs and to escape the military. While Ben was accepted by Colgate University, Jerry wasaccepted only by Oberlin even though he applied to various schools. In 1969, their ways wereseparated in order to get college degrees, but they gave a promise to each other to keep in touch.Ben could not be a serious student, and he was unsuccessful as a student. For this reason, he quitcollege in 1972. He wanted to be a potter, and in order to support his pottery traineeship, heworked in many different fields. He helped a baker, delivered Yellow Pages, mopped nights, andcooked. He also worked at a hospital as an admission clerk. On the other hand, Jerry wanted tobecome a doctor; however, he failed many times to get an admission from medical schools.Ultimately, he gave up his plan to be a doctor, and he moved to Manhattan after he graduatedfrom his university. He was a lab technician in Manhattan. When he moved to Manhattan, Benand Jerry lived together for two years. After two years, Jerry went to Chapel Hill, North Carolinabecause he wanted to live with his girlfriend, Elizabeth who is his wife. He worked as a labtechnician at UNC Hospital. However, being a lab technician was unpleasant for him. Inaddition, Elizabeth ended their relationship, so there was no reason for him to stay in NorthCarolina anymore, and he went back to New York. (Cohen & Greenfield, 1997)
  • How Did They Start? When Jerry went back to New York, Ben offered him working together. They wanted tosell bagels; however, the equipment for making bagels was $40,000. For this reason, they had togive up selling bagels. They had a second choice which was making ice cream. They attended anice cream making course in Penn State University with $5 tuition. It was actually acorrespondence school via mailing. After attending the course, they decided to find a location forthe shop. They had two priorities on choosing the location. One was a large college population,and another was a warm weather condition. They eventually chose Saratoga Springs, but whilethey were collecting enough money to rent a shop, another homemade ice cream shop wasopened. For this reason, they had to change the location, and finally they decided on Burlington,Vermont. After choosing the location, they worked on a business plan. Jerry had enough moneywhich was $4000 to invest; however, Ben had only the half amount of $4000. For this reason, hewanted the rest of the money from his father. Ben’s father was happy to give money to his sonbecause he thought that his son was going to be a businessman. Fred Burgess, a local banker,suggested that they needed to sell other things besides ice cream in Vermont in order to sustainthe business in the winters. They were convinced, and they put whatever they needed in thedescribed menu including soups, crepes, and brownies and the décor on the business plan. Whenthey finished writing the business plan, which demanded a $20,000 loan, increasing the totalamount of investment to $28,000 in the business, the pairs went to Merchants Bank to see FredBurgess. Fred liked Ben and Jerry’s ideas, intelligence, and willingness, and he wanted to givethem a chance to show themselves. After the approbation, co-founders, Ben Cohen and JerryGreenfield, of Ben &Jerry’s Homemade Ice Cream opened their first store on Saturday, May 5,1978. (Lager, 1994)
  • How Did the Company Grow? After the shop was opened, Ben and Jerry promoted a buy one get one free cone offer.With that way, there was a long line each day in front of the shop. Ben and Jerry wanted to be ahost for a free film festival because they wanted to connect with the community. They weregetting well-known in Vermont. On the first anniversary of the shop, they wanted to celebrate it,and they gave free ice cream to all consumers. “They truly believed that the joy was in thejourney, and were determined to seize upon every opportunity to have fun that came their way.Ben and Jerry came to describe their business as being “funky,” which to them meant honest, notfrills, handmade, and homemade.” (Lager, 1994, p. 36) Beside those reasons, there were twoother important reasons why the company grew quickly and became popular. The first reasonwas creative flavors. Jerry was creating new flavors, so they did not need to hire someone toinvent new flavors. Giving special names, such as New York Super Fudge Chunk, CherryGarcia, Chunky Monkey, Rainforest Crunch and Economic Crunch to each flavor attractedconsumers, and the sales by 1987 increased to $32 million (Richards, n.d. retrieved 09/23/2009).According to Rob Michalak, Ben & Jerry’s director of social mission and public elation,consumers made a connection between the flavors and their stories. Thereby, the emotionalrelationship appeared between the flavors and the consumers (Seireeni, 2008). The second reasonwas social and environmental responsibilities. Ben & Jerry’s manager of natural resources,Andrea Asch, believes that consumers value the social and environmental mission. Thecompany’s mission includes several aims, (Richards, n.d. retrieved 09/23/2009) such as: Recycled materials were used to make an original scoop shop Created a Green Team, to educate the employees of the company about environment Using solar panels on the company’s buses
  • Challenges behind the Success Although the company grew fast, in the middle of 1980s, there was an issue aboutdistribution rights which led a lawsuit against Haagen-Dazs’ parent named the PillsburyCompany. Afterwards, Ben and Jerry realized that they had to find someone who had the abilityof management to sustain the business and to be competitive with others in the market. RobertHolland, a veteran of McKinsey & Co., was selected in 1995 as CEO. Nonetheless, there was aconcern about the company’s simple hierarchy and special culture because Ben and Jerry hadstrict rules on the company’s management pay scale ratio. In addition, the company had tochange the policy on making ice cream. Notwithstanding the company became popular with itseccentric flavors, the plain vanilla was the most popular flavor in the U.S. For that reason, thecompany announced “Smooth, No Chunks!” to customers. Moreover, the competition wasgrowing because of other companies, such as Haagen-Dazs and Dreyer’s in the market. WhenBen & Jerry’s outsourced some of its products to Dreyer’s to attract the Western customers, thecompany had to worry about its independence. (Richards, n.d. Retrieved 09/23/2009)Conclusion The most important thing that businesses should concern about is loyalty, and there is astrong connection between Ben & Jerry’s and its consumers. The consumers always give creditsto a company that dedicates itself to becoming a social and environmental company. That is oneof the main goals of Ben & Jerry’s. In addition, the company has already had its portion in themarket. Besides loyalty, institutionalization is another important factor. The company ismanaged professionally. There are many departments that focus only their specific tasks.Moreover, the company is able to fulfill the expectations of customers by keeping up with thetechnology. Overall, I think that Ben & Jerry’s will be successful for these reasons in the future.
  • References 1. Cohen, B., & Greenfield, J. (1997). Ben & Jerry’s Double- Dip. New York: Simon & Schuster. 2. Lager, F. (1994). Ben & Jerry’s: The Inside Scoop. New York: Crown Publishers. 3. Richards, D. (n.d). Ben & Jerry’s – The Man Behind the Ice Cream. [Online article]. Retrieved September 23, 2009 from the World Wide Web: http://entrepreneurs.about.com/od/famousentrepreneurs/p/benandjerrys.htm 4. Seireeni, R. (2008). The Gort Cloud. Vermont: Chelsea Green Publishing.