2. Dippin’ Dots Ice Cream Brian R. Callahan Alan B. Eisner
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3. Dippin’ Dots Ice Cream Icebreaker Question
How many of you have tried a specialty ice cream?
How many of you have heard of “Dippin’ Dots?”
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4. Dippin’ Dots Ice Cream
Analyze Dippin’ Dots external environment. What are the general environmental factors that have impact on the industry?
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5. Dippin’ Dots Ice Cream
What are the external forces of competition affecting the frozen dairy industry?
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6. Dippin’ Dots Ice Cream Analyze Dippin’ Dots’ internal environment.
What does Dippin’ Dots’ value chain look like?
What about its resources?
How would you evaluate its performance?
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7. What business level strategy does Dippin’ Dots appear to pursue?
Dippin’ Dots Ice Cream
What business level strategy does Dippin’ Dots appear to pursue?
What niche (cost, differentiation, focus) can Dippin’ Dots fill in the highly competitive ice cream industry? Is it sustainable and does the industry have room for such an enterprise?
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8. Dippin’ Dots Ice Cream
What opportunities for growth should Dippin’ Dots pursue?
What should Jones do to manage and encourage this entrepreneurial activity?
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9. Q1. General Environment
Demographic: Rising levels of affluence – more discretionary dollars; shift in geographic population to South and West – hotter weather, more appeal to frozen products
Sociocultural: Greater concern for healthy
diets/fitness – single serving concept has appeal; possible MTV/sports celebrity endorsements attracts growing teenage market
Technological: manufacturing/distribution
opportunities
Economic/Global: Access to capital; China as a market; consolidation in food/beverage industry; sector competitive and profitable
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10. Q1. Industry Environment
Limited number and variety of available distribution channels available to newcomers, particularly in large grocery store chains
POTENTIAL ENTRANTS
Low – commodities such as milk, sugar, etc.
INDUSTRY COMPETITORS
SUPPLIERS
BUYERS
Buyers are franchisees and the general public, 90% of whom consume ice cream and frozen desserts. Expansion to grocery chains – buyers? Competitive forces?
Reason for competition is the market’s potential. Some ice cream categories show opportunity for innovation especially in the novelty area
SUBSTITUTES
High – many alternatives for desserts/snacks (cake, pie, fruit, candy)
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11. Q3: Dippin’ Dots’ Value Chain
Value Chain Activity
How does Dippin’ Dots create value for the customer?
Primary:
Inbound logistics
Acquisition/licensing of new manufacturing facilities in central U.S. and Korea – easier distribution
Operations
Super-cold freezing locks in flavor/ freshness; unique form factor and state of art product line
Outbound logistics
Logistics problems; vending machines, scoop shops
Marketing and sales
Needs to be consumed at or near retail location; innovative promotion – MTV, sports celebrity
Service
Opportunity for instant feedback; less control because of franchising
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12. Q3: Dippin’ Dots’ Value Chain (cont.)
Value Chain Activity
How does Dippin’ Dots create value for the customer?
Secondary:
Procurement
High ingredient costs affect pricing/ margins
Technology development
Curt Jones’ ability to innovate in lab; new product creation
Human resource management
Initially Jones’ friends; franchising allows for growth without overhead costs
General administration
Jones is an entrepreneur – priority is growth, may be a problem. Can Jones hire the right people?
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13. Q3. Dippin’ Dots’ Resources
Tangible: Financial – franchise cash flow options; Physical – new production/distribution facilities in Kentucky and South Korea; Technological – innovative product, production/distribution designed specifically for product; Organizational – no obvious value-creating org. resources
Intangible: Human – franchisees can add value or damage reputation; Innovation and Creativity – Curt Jones’ scientific background and innovative ability; Reputation – current relationship with McDonald’s, MTV and sports celebrities endorsement
Capabilities: Entrepreneurial mindset, technological capability; innovative product plus energy and marketing to gain celebrity sponsorship could really add value
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14. Q4. Business Level Strategy
Cost Leadership – perhaps not a good strategy at this point; not enough experience yet to be able to learn what costs can be lowered without sacrificing quality
Differentiation – Dippin’ Dots must work to link its value chain processes to make sure the product retains its unique qualities. Main challenge is that product can be imitated.
Focus – Current focus is on the out-of-home market, Nestle and Unilever also doing it; if Dippin’ Dots goes to grocery stores – more competition from other brands
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15. Q5. Growth Opportunities
New product (that will withstand conventional freezers while preserving super frozen dots in the ice cream) – enter take-home market
Maintain/expand current market base through more support for franchising or push into grocery store business
Successfully manage the innovation process
Jones needs to know when new product is worth pursuing
Need operational skills
Consider implications for marketing and distribution
Need to monitor feedback from customers
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