Ben And Jerry
Ben & Jerry’s analysis.
Translating from the ratios, Ben & Jerry was struggling to generate enough sales to cover their costs. In other words, their profitability had fallen sharply from 1992 to 1993 and in 1994, the firm had experience a loss for the first time. Even though the EBITDA was still positive in 1994, it fell from $10,000 level to 2,000 level, an 80% decrease from 1993. This clearly indicated that Ben & Jerry’s performance had deteriorated at a striking rate, regardless of its increase in sales by 6%. Moreover, their return on assets and equity had kept on decreasing contributing to the fact that the firm is less profitable. Their decreasing net working capital turnover ratio and assets turnover ratio indicated that …show more content…
The rise of health concern in 1990’s and higher education had led many people to seek for healthy food. Ben & Jerry’s ice cream with its rich flavor and high calorie and fat, thus became less preferable. Consumers had switched to different alternative within snack and candy industry. Secondly, the technological change had made their competitor more efficient in producing ice cream. Meanwhile Ben & Jerry had insisted on keeping their inefficient labor force in their production process. As a result, their main competitor, Hagen Daz, had gained more market share through price cut when the trend of people eating ice cream had geared toward a low price products instead of high premium ones. Ben & Jerry did not prepare or focus on international market, allowing Hagen Daz to grow its market. Thanks to its R&D team, Ben & Jerry’s products had many unique and rich flavors and was liked by many consumers in term of its flavor keeping the company a competitive advantage over its competitors. Since the trend of consumers had changed, the company needed to adapt its strategy to survive in the
Translating from the ratios, Ben & Jerry was struggling to generate enough sales to cover their costs. In other words, their profitability had fallen sharply from 1992 to 1993 and in 1994, the firm had experience a loss for the first time. Even though the EBITDA was still positive in 1994, it fell from $10,000 level to 2,000 level, an 80% decrease from 1993. This clearly indicated that Ben & Jerry’s performance had deteriorated at a striking rate, regardless of its increase in sales by 6%. Moreover, their return on assets and equity had kept on decreasing contributing to the fact that the firm is less profitable. Their decreasing net working capital turnover ratio and assets turnover ratio indicated that …show more content…
The rise of health concern in 1990’s and higher education had led many people to seek for healthy food. Ben & Jerry’s ice cream with its rich flavor and high calorie and fat, thus became less preferable. Consumers had switched to different alternative within snack and candy industry. Secondly, the technological change had made their competitor more efficient in producing ice cream. Meanwhile Ben & Jerry had insisted on keeping their inefficient labor force in their production process. As a result, their main competitor, Hagen Daz, had gained more market share through price cut when the trend of people eating ice cream had geared toward a low price products instead of high premium ones. Ben & Jerry did not prepare or focus on international market, allowing Hagen Daz to grow its market. Thanks to its R&D team, Ben & Jerry’s products had many unique and rich flavors and was liked by many consumers in term of its flavor keeping the company a competitive advantage over its competitors. Since the trend of consumers had changed, the company needed to adapt its strategy to survive in the