This document summarizes an analysis of the Arun Ice Cream case. It discusses the industry analysis including the bargaining power of suppliers and buyers and threats from new entrants and substitutes. It then lists available options for Arun Ice Cream such as broadening their product line, expanding their franchise model, taking over local companies, merging with an international brand, and backward integration. It recommends expanding the current franchise system aggressively with advertising to increase brand awareness in new states.

1. Arun Ice Cream Case
Analysis
Group Members
Kalgi Desai B11
Vikas Fofandi B18
Sohil Ghoghari B22
Parth Rajyaguru B51
Dipak Savaliya B53
Tej Shah B64

2. Industry Analysis
Bargaining Power of Suppliers
• Bargaining Power of supplier is high
• Milk suppliers have a lot of options were
they can supply milk
• Loyalty issue due to Peak season and lean
season demand differences
Bargaining Power of Buyers
• Bargaining Power of Buyers is high
• Large number of substitutes and higher competition
• Price Sensitive customers
• Customer switching cost is less
Threats of new Entrants
• Threats of new entrants is high.
• Due to reforms in 1991 now international
companies can also enter Indian ice cream
market
• Capital requirement is Medium
Industry rivalry
• Industry rivalry is high
• There are many local competitors
• Indian companies like Joy, Dasaprakash, Vadilal
• International companies (HUL)
Threats of Substitutes
• Threats of substitutes is Moderate
• Indian sweets, Kulfi

3. Available Options
• Broadening Product line
• By providing different type of products like milk products, milk supplements, sweets, Arun ice
cream can strengthen its product offerings
• Expansion through –Current Franchisee model.
• Arun ice cream can expand their business in other states of India by using same sit and eat
parlor strategy. It can increase their brand value by different advt. campaign for creating brand
awareness in new market
• Expansion – through takeovers
– Arun ice cream can takeover various local companies to expand their reach in other states
• Merger With an international company
– Arun ice cream can go for merger with an international brand
• Backward integration
– Arun ice cream can either go in for exclusive agreement with farmers or can open dairy farm
to help its supply chain getting disrupted by fluctuation in milk supply.

4. Option Evaluation

5. Recommended Option
• Expansion – through Current Franchise system
• Arun ice cream is following its current strategy by expansion of franchises in other states.
Sales per franchise is increasing through out the year (except 1991).
• As Emphasized in Case Chandramogan believes in investing in people so this strategy will
help him expand his network slowly in different states.
• Now this option should be implemented with aggressive advertisement and campaign to
increase brand awareness in new states
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Sales/Franchise
Sales/Franchise