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Ice-Fili a Case Study
Transcript of Ice-Fili a Case Study
Competitors and competitive position
Porter's 5 Forces
for your attention!
: Producing Ice Cream, Develop new Ice cream tastes
Distribution companies (Service-Fili, Alter-West), Suppliers of Ice cream equipment from Denmark.
Imported raw materials (milk, milk powder, sugar butter, favour additives)
Interest in traditional Russian all natural milk-based ice cream.
Focused Customer group not specific
Less wealthy areas, Metropolitan areas.
Kiosks,Mini markets, Pizza Hut, TV Advertising
Traditional Russian Ice cream with natural high quality ingredients.
Product and Industry
The issue raised in this case study is
, an ice-cream producer with over 65 years of experience on the Russian market,
can maintain its leader position
under the fierce competition
coming from two directions:
Final Suggestions and Recommendations
Industry Key Success Factors
Over 300 producers competing for a share
Ice-Fili is the largest domestic one (5% market share)
Two types of competitors:
Greatest threat (30 % of domestic market)
Some switched to ice-cream from other frozen products
More flexible with distributors, becoming more competitive
Some have aggressive growth strategies both across country and in the capital
Some important names left the market (Ben & Jerry’s, Unilever (Algida)
Baskin-Robbins: premium segment, high prices, restaurants & cafes
Nestle: direct competitor, well established in Russia, big threat
• Political change of Government, generated by the fall of the Communism;
• The anti-alcohol campaigns.
• The passage from a national based economy to the open market – first economic crisis;
• The financial Crisis of 1998 – second economic crisis;
• Competitive prices compared to competitors;
• Exports growing as imports drop;
• Pronounced seasonal production differences compared to Western countries.
• Western influences;
• Positioning themselves as the most authentic Russian ice-cream producer;
• The advantage of the local figure.
• Small number of products;
• Combination of both new and old production equipment;
• Introduction of “Lakomka”;
• Global inconsistencies;
• Changes of the supplier of ice-cream production materials and equipment;
• Poor distribution system.
• Importance of raw materials;
• Changes of the rules of production.
• Unstable legal framework, as a result of several governmental changes;
• The impossibility of patenting and registering trademarks;
• Lack of international standards regulations (such as ISO).
Beer, soda, yogurts, chocolate & confectionary products
Increasing demand for above
Decreasing demand for ice-cream
Low switching costs for consumers
Beer & soda companies invest more in advertising:
90 mil $ - Beer
200 mil $ - Soda
vs. 5 mil $ - Ice-cream
Most are local (3-4 suppliers/ ingredient);
Seasonal price fluctuation
Account for 20% of retail price.
Ice-Fili uses imported equipment;
Local equipment companies developing fast;
Over 10 equipment companies in Russia, Ukraine & Baltic countries.
Potential New Entrants
Porter’s 5 forces model
Products not clearly differentiated in their minds
Decreasing & inelastic demand (only high price-changes affect it)
Easy switching to other products
As buyers, they have high bargaining power
High influence on product availability to consumers
- 468 000 tons of ice-cream produced
- 76 factories
2.5 kg ice cream / capita VS 16 kg / capita in US
Ice-Fili produce 200 tons / day
170 different ice cream products
won “Product of the year” for “Eralash” brand
Industry is in its Maturity life cycle stage
Low brand preferences & low brand loyalty among customers
Ice-Fili produces Lakomka (30% of company’s sales volume)
Easy access to distribution channels
Easy access to equipment and technology
Easy to enter for companies in other industries (e.g. frozen-food)
Recommendations following the PESTEL Analysis
1. Focus on using low traditional labor;
2. Develop strategies that international companies cannot usually copy;
3. Emphasize as much as possible local advantages, make appeal to traditions;
4. Invest in advertising its high quality and great taste, as well as its Russian origins.
5. Consider a joint venture with a foreign company that could help Ice-Fili financially.
Allocate more funds to marketing in order to differentiate the company’s products from competitors and substitutes.
Take advantage of company’s history
Reduce number & increase power of brands
Forward integration of distribution companies to increase the availability of products
Equipment and technology
Invest in advertising:
take advantage of company's history
use guerrilla marketing, social media
Reduce overall number of brands and improve their power & value for customers
Develop further in the HoReCa segment; concentrate on getting more contracts like the Pizza-Hut one;
Increase the market share in the home-use ice-cream niche
Expand business over the value chain, getting more involved in the distributions of products
Operations & Assets
Improve production efficiency and divest or lease unnecessary lines of production for a higher ROA