Case Study - Ben & Jerry's
1. What is your assessment of the job Ben Cohen has done as the CEO of Ben & Jerry's Homemade? Do you agree with his decision to relinquish his position as CEO? Why or why not?
Ben has done a great job as CEO. From a business standpoint and in view of the company’s mission, I disagree with his decision to step down as CEO. The company’s growth has been due in large part to the counter-culture and socially responsible image. Without Ben’s guidance, they may become just another ice cream company.
2. Is the company's mission statement sound and well conceived? Are shareholders well served by such a strong emphasis on "caring capitalism? Has the mission statement worked well for Ben & Jerry's so far?
The mission statement is well conceived from the viewpoint of the founders and from a public relations viewpoint. From a profit standpoint, it is not good. This mission statement does not serve the shareholder interests. Profit and shareholder value are placed last among the three missions within the mission.
3. What is the company's strategy? How has it evolved over years-what new features have been added?
The company’s strategy is to sell single pint ultra-premium labeled ice cream and to advertise through word of mouth, ads and billboards and through events, and to promote their product as all natural. At first, the company focused on sales through their ice-cream shop, then sales to restaurants. Now the concentration is on supermarkets.
4. Does the present strategy seem to fit industry and competitive conditions? Has it resulted in a competitive advantage for Ben & Jerry's? Has it produced good bottom-line performance?
The strategy fits well with current conditions. Most of the competitors sell lower grades of ice cream. Ben & Jerry’s has captured the top spot in the ultra-premium segment. However, their market share has decreased with the current trend toward lower fat snacks.
5. Is Ben & Jerry's a socially responsible company? Does it have an ethical strategy? How healthy are the company's products? Can a company whose products are "bad" for its customers' health be correctly labeled as socially responsible?
Ben & Jerry's is a socially responsible company. Their ethical strategy is to put back some of the profits into helping the community. Also, to choose their suppliers by picking those which fit into their idea of ethical responsibility. Also, they are willing to spend more on their suppliers if it fits in with their strategy. Though Ben & Jerry's ice cream is not a healthful food, it is not an evil food either. As Ben said, there is nothing wrong with eating ice cream in moderation. If the ice cream was truly bad for the customers, as in the case of cigarettes, the company could not be considered socially responsible, however, ice cream is not in that category.
6. Given the generous employee benefits package and the progressive HR practices, how do you account for so much dissatisfaction among employees?
The dissatisfaction stems from Ben’s authoritarian management style and in his unwillingness to praise employee achievements. Also, the 7 to 1 ratio of top-level management pay to that of the lowest-paid employee, does not promote an atmosphere where employees can feel they are paid according to merit, this is particularly true of the more senior employees.
7. Should any of the present senior officers be considered for the CEO position? Should the new CEO come from outside the company? What skills, managerial qualities, and business values should the new CEO have?
The essay contest for a new CEO was a brilliant marketing ploy. If a great CEO can be found from the contest, then the image of a company run by down to earth hippie dudes could be rolled over into the new management. The new CEO should have a down to earth responsible-activist-who-became-CEO-of-a-big-company-by-writing-an-essay image
8. What changes in strategy or in internal management practices would you recommend to the new CEO?
The new CEO should initiate merit bonuses for employees.
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