1. Strategy Letter I: Ben & Jerry’s vs. Amazon
Phillip Guest
November 12, 2014

2. Introduction Brief History of Ben & Jerry’s and Amazon
Differences between the two models
Spolsky’s Advice when choosing a model

3. Brief History of Ben & Jerry’s
Began in 1978
Revenue for 1984 was over $4 Million
Revenue for 1992 was $132 Million
By 2008, annual sales were exceeding $200 Million

4. Brief History of Amazon.com
Founded in 1994 by Jeff Bezos
In 2000, began offering e-commerce platform to additional retailers
In 2003, reported revenue of $5.26 Billion
In 2013, reported revenue of $74.45 Billion

5. Differences Between Models
Established Competitors
Network Effect and Customer Lock-in
Initial Capital Required
Importance of Corporate Culture
Learning from Mistakes
What Rate of Growth Offers Employees
Chances of Success

6. Established Competitors
Ben & Jerry’s
Slowly win customers from competitors
Amazon
“Land grab”
Get as many customers as possible before competition shows up

7. Network Effect & Customer Lock-in
Ben & Jerry’s
No network effect or customer lock-in
Amazon
Works when you have both

8. Initial Capital Require
Ben & Jerry’s
Initial investment is low
Reinvest profits to grow
Amazon
Large amount of capital required
Substitute money for time to beat competition

9. Importance of Corporate Culture
Ben & Jerry’s
Corporate culture is important
Allows for mentorship and adherence to company values
Amazon
Corporate culture is impossible
Growing too fast for mentorship
The number of employees means there will be many different sets of values

10. Learning From Mistakes
Ben & Jerry’s
Mistakes hurt company
Must learn from these mistakes
Amazon
Growing too fast to notice mistakes
Mistakes are easy to cover with money

11. Growth Rate & Employees
Ben & Jerry’s
Growth over long amount of time
Translates to job security for employees
Comfortable work space is important to make up for lower wages
Amazon
Get big fast
Able to offer high salaries
Hours may be long

12. Chances of Success Ben & Jerry’s Amazon High chance of success
In the event of failure, losses will be low
Amazon
High chance of failure
In the event of success, payoff may be great

13. Choosing a Model Must choose one Choose Amazon if:
No competition
Network effect and customer lock-in
Choose Ben & Jerry’s if:
Entering an established market
Set goals of sustainability and profitability

14. Choosing a Model Consider personal values Stick to choice
Which company would you rather work for?
Stick to choice
Cannot be both

15. Conclusion History of Ben & Jerry’s and Amazon
Differences between models
Guidelines when make the choice

16. References http://www.joelonsoftware.com/articles/fog0000000056.html

17. Questions?