Strategy- MARS ICE CREAM
Situation being analysed: Relaunch Mars Ice Cream Products
This SWOT example is for a new business opportunity, to reinvent the Mars Ice Cream. Mars a chocolate food product is one of the confectionery industry’s greatest success stories. Mars slogan is work rest and play. It is important to establish a strong brand to build a solid customer franchise. In reality Mars company operates in over 230 locations in over 1980 countries with 135 factories in more than 68 countries. In this exercise Mars has one factory. This one factory will severly effects Mars success. Mars has a low unit cost of the items carried to cover transport cost you need to sell a lot of inventory and fast. There is related difficulty of making up economic loads within a sufficiently compact geographic area. Mars primary goal should be to establish more factories to cut transportation cost. Mars also needs to provide freezers to local retailers as its competitors have done in order to ensure they do not loose out on the small market opportunities.
Below is an extended look in question 1. How would you resume the strategies adopted by Mars to launch its ice cream products? Again, the primary goal is to establish more factories to cut transportation cost. The one factory in France will not be able to compete against competitors fast and readily available deliveries. Mars has to adapt the mulipack the bulk pack which it has and it as also created the 5 pack to double its brand pressence.
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criteria examples
Advantages of proposition? Capabilities? Competitive advantages? USP’s (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing – reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession? Philosophy and values? |
Strengths
Reinvent product to compete with competitors that are monopolizing the market.
Resume advantage in European Ice Cream Market
First product of its kind, high quality ingredient and delicious chocolate. Great taste and packaging
1 distributing factory, France ( France consumes the most chocolate per a capita after the USA)
High Brand loyalty
Cultural- sponsors global football teams
Philosophy: work , rest and play. “The Mars Ice Cream business has over 20 years of hertiage where we have aimed to combine the best of what Mars stands for: Great brands, delivering great tasting products, fit for all occassions.”
As of 2012 there is anew team and new sturcture, increase in marketing.
Recognized worldwide
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Weaknesses
Does not sell dessert ice creams Does not sell bulk pack Does not sell children’s novelty ice cream Expensive chocolate that has high transport cost Short shelf life, need quick inventory overturn Not easily available due to competitors (UNilver and Nestle) buying up the freezer cabinets in small local shops. ( Must compete, so must provide same freezer initiative.
New staff , new management dedicated to the quality and promotion of Mars
High Price
There is a very strong global market with lots of competitors.
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criteria examplesDisadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession? |
criteria examplesMarket developments? Competitors’ vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP’s? Tactics: eg, surprise, major contracts? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences? |
Opportunities
2012 we aim to go back to the basics devlier a real focus against our consumers and customers needs to deliver long term sustainable growth for all
New Promise to market brands with a marketing code that promtes our products for people age 13 and over as this is the age when you can make sensible snack choices.
New freezer lid stickers, use stickers on external facing windows to attract customers
Tap new cities and new retail chains
Have more variety and smaller gift packages
2012 introduce 4 pack and 5 pack variety to double brands presence
41% of all Ice Cream sales are made in winter so keep freezers stocked
Bulk packages, children’s novelty ice cream and dessert ice creams
Mars partners with Swiss chocolate maker to increase availability |
Threats
Make sure freezer is clean and tidy. 50% of sales are lost due to scruffy freezer displays
Need to have retailers use freezer stickers and menu boards to show what is available.
Have freezer in an easy to access place
Must compete with bulk packs
Mars is 8 in the top 20 single ranking list of 2011. Mars had 4 varieties compared to 2 each of the competitors Cadbury and Nestle. Threat to stay ahead.
Calorie conscious people, obesity on the rise
Chocolate interest is decreasing and health awareness is increasing |
criteria examplesPolitical effects? Legislative effects? Environmental effects? IT developments? Competitor intentions – various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy – home, abroad? Seasonality, weather effects? |
2.) Do you think that Mars will ever make significant profits from its ice cream operations? Why and How?
To follow Michael Porter’s Value Chain we can evaluate Mars potential and immediately see Mars’ weaknesses. Mars needs to first and foremost expand it’s hypothetical infrastructure. It cannot compete with only one factory that causes transport cost to sky rocket. It needs improve operations in order to compete. The new team is dedicating more money to marketing which is always good. Mars is placing themselves in the limelight by sponsoring sporting events which will help in advertising. In order to ensure success they need to place their product in not only large retail chains but small vendors as well and in order to do this they need to provide freezers for small retailers the way their competitors have. Mars should (as they have in reality) team up with competitors to drive business. Mars needs to be able to deliver a product and service for which the customer is willing to pay more than the sum of the costs of all the activities in the value chain. As of right now, Mars is failing to do so unless they extend their operations and employ new products and packaging to compete. There is a link between not only the quality of the goods but also the systems and processes that enable the company’s performance. Only is marketing and sales delivers steady demand then procurement will be able to order the necessary amounts of chocolate by the correct date. It is a domino effect and every chain is as strong as it’s weakest link. The difference of the final price the customer pays and the sum of all the cost incurred with the production and the devliery is the companies profit so in order to maxmise profit margins a solid foundation and value chain needs to be established in order to successfully sell Mars Ice Cream. Mars needs to continue to expand globally and expand investment in infrastructure and freezers to compete. Mars will have to combat the health conscious trend but new opportunities will present themselves with trend changes. Mars will be able to compete if certain aspects of their organization are improved to better the whole.
Comments Off on Strategy- MARS ICE CREAM /
05 Dec 2011
por
Lauren Musiello
IMSD /
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