Ice-Fili is actually a mid-sized and privatized joint-stock company in Russia. In 2002, it ranked as the top goodies producer which in turn offered 170 different ice cream products and acquired more than $25 million in sales. In addition , Ice-Fili's flagship ice cream brand --" LakomkaвЂќ was accountable for 30% from the company's revenue. В However, Ice-Fili has been burning off its business and encountering a reduction in sales quantity in recent years because of the increasingly competitive Russian goodies market. External Analysis
Lifestyle Cycle Level
The Russian ice cream market was in the expansion stage following 1996, the ice cream usage value a new huge increase by 222, 1000 tons in 1996 to 376, 000 tons in 2002. However , the industry reached the shakeout stage in 2002 since the demand for ice cream approached saturation level and the competition between companies became more intense (300 companies in 2002). INFESTATIONS Analysis
The table below shows how the macro-environmental factors influence ice cream market in Spain. Political| -- GOST: a minimum standard deciding the ingredients and quality, which usually protected classic Russian your favorite ice cream producers| | - The Dissolution with the Soviet Union: state-run overall economy transferred to an open-market economic climate, which lowered entry obstacles and lead to higher competition| Economic| -- Open Marketplace: created a chance for overseas producers to expand their very own ice cream brands in Russia| | - Financial Crisis of 1998: hindered some potential entry candidates and detrimentally affected existing firms | Social| - Increased Demand for Bulk Goodies: enabled ice cream producers to capture the home usage segment| | - Improved Consumption of Substitute Goods: as alcoholic beverages and soft drinks products gain popularity among the younger generation, the ice cream industry faced the challenge of decreasing sales| Technological| - Rapid Advancement the Ice Cream Equipment: an opportunity for goodies producers to efficiently produce and maintain superior quality products
Porter's 5 Makes
Bargaining Power of Suppliers
2. For suppliers of ingredients: low attention and low switching costs * To get suppliers of equipment: high attentiveness and high switching costs Bargaining Benefits of Suppliers
* Pertaining to suppliers of ingredients: low concentration and low moving over costs * For suppliers of equipment: high concentration and high transitioning costs Relating to Porter's 5 Pushes model, Glaciers Fili can be facing a powerful competition within just Russian goodies industry. Consequently , Ice Fili's managers need to determine the best strategy to create competitive advantages of the company in order to compete and strengthen it is market placement.
Danger of Alternatives: High
5. Low moving over costs
2. Existence of substitutes such as beer, confectionaries and snack foods * Large market regarding substitute items
Threat of Substitutes: Substantial
* Low switching costs
* Lifestyle of alternatives such as ale, confectionaries and snacks * High market growth of substitute products
Depth of Rivalry among Set up Firms: Substantial
* Large numbers of competitors (300 in 2002) including regional, Moscow-based, and foreign producersВ В В * Slow market growth
* Excessive barriers leaving
Intensity of Rivalry among Established Businesses: High
* Large number of opponents (300 in 2002) which include regional, Moscow-based, and international producersВ В В 2. Slow industry growth
5. High boundaries to exit
Bargaining Power of Purchasers: High
2. Low switching costs
2. Low level of product differentiation
* Low demand elasticity
Bargaining Power of Buyers: Large
* Low switching costs
* Low level of merchandise differentiation
5. Low require elasticity
Likelihood of entry by simply potential rivals: High
5. Low company loyalty
5. Easy access to distribution stations
* Fragmented market
2. Lack of obvious rights...
Recommendations: Hill, C. W. T., & Smith, G. Ur. (2004). Proper Management: A built-in approach (9th ed. ).
Boston: Mass Houghton Mifflin.
Rukstad, M., Mattu, S., & Petinova, A. (2003). Ice-Fili. Boston: Harvard Business Institution
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