Ben and Jerrys Case Study Essay

Published: 2020-02-20 17:11:41
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Category: Ice cream

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Q.1: Action recommendations: What should Yola Carlough do regarding political voice, employee morale, and product development?

Yola Carlough was the head of Social Mission in Ben and Jerrys, and she had to face many issues concerning the mission statement of the company, such as political voice, employee morale and product development. It was hard for her to integrate the social beliefs of Ben and Jerrys into the code of conduct of Unilever.

¢ Employee Morale:

Prior to the acquisition, employees of Ben and Jerrys saw the company as a network of family and friends in which they were all fully involved and integrated. Ben and Jerrys had a policy in which no one was fired. They developed a 2 year grace period with Unilever in which no employees would be fired, but after this period Unilever decided to restructure and lay off many workers. Although they offered severance packages which included one-months salary for every year of employment, there were still feelings of low morale among employees. Before the acquisition, the company was tied deeply to its local routes, but after the acquisition, 70% of employees felt that Ben and Jerrys had abandoned its local origins.

So we have several recommendations which we think could help Yola Carlough improve employee morale. Because many of the employees had worked all their lives for Ben and Jerrys, many of them lacked expertise in other ways. So, alongside the severance packages, Carlough could also offer training and education in other areas to help them find new jobs, with the possibility of acquiring a new different job in Unilever, or other companies. Ben and Jerrys came from a small town in which most people were resistant to change.

Part of the reason for low employee morale was the lack of information given on the changes that would take place post-acquisition, so if employees were better informed on the changes and the positive influence of the acquisition they would feel more confident in accepting the acquisition and their morale would improve. This information could be portrayed in weekly or monthly meetings, and the positive influences of the acquisition could also be conveyed, such as improved sales figures or improved customer satisfaction. Feedback could also be given from sub-ordinates at these meetings.

¢ Product Development:

A conflict of interests developed in early 2004, between the demands of the market and the social mission of Ben and Jerrys. The market demanded a low-sugar ice cream product, which would require an artificial sweetener, and the use of this sweetener was against the social policy of Ben and Jerrys. In this case, there are two choices. Ben and Jerrys can choose to use the artificial sweetener and produce the low-sugar ice cream. They could explain to their customers through marketing that this product has many health related benefits. On the other hand, they could abandon this option and try to create a niche in the market by proposing an innovative creative product. For example, they could create a label using the Fairtrade logo. They could also take part in some programs, such as the Caring Dairy program, in which they reduce their C02 emissions. Because Ben and Jerrys main consumer base are socially and environmentally aware, these products would prove popular among the consumers.

¢ Political Voice:

Before the acquisition, Ben and Jerrys employees often fought for their opinions on social and political issues and participate in public demonstrations. However, this was not part of the code of conduct of Unilever. Customers often wrote to Ben and Jerrys asking them to demonstrate and protest on their behalf. Because the main goal of a company is to satisfy customers, Carlough could request permission from Unilever to develop a section or a forum on their website in which customers could write their opinions and discuss political and social issues that they found important.

Q.2: Given that Unilever was acquiring soft resources (Socially Responsible Organizational identity) by purchasing Ben and Jerrys could it have made more sense to forge an alliance with Ben and Jerrys instead of acquiring it?

It would not have made more sense to forge an alliance with Ben and Jerrys because both benefited more from the acquisition than they would have from an alliance.

Firstly, Ben and Jerrys was developing and becoming more and more popular every day, and they were unable to satisfy demand due to restricted production facilities. They needed larger facilities and more labor in order to increase production. Unilever were able to support Ben and Jerrys distribution network, and to give them the ability to enter new markets. Ben and Jerrys had reached their highest point, and so were unable to do this alone. An alliance would have been possible, but had an alliance been forged, it would not have been profitable enough for Unilever, because it would not have made sense for Unilever to forge an alliance with a company who had already reached their highest point. Therefore, in order to help Ben and Jerrys meet the demands of the market, and to restructure the manufacturing process, it made more sense for Unilever to acquire Ben and Jerrys than to form an alliance with them.

Considering the sizes of the two companies, it would have been na¯ve and ignorant to forge an alliance. When forming alliances, it is important that the two companies be similar in some ways, and size is an extremely important factor to consider. Unilever was a large umbrella group, acquiring many other brands at the same time as Ben and Jerrys, for example Amora Maille and Dove. Ben and Jerrys was a small town unprofessional company formed by two friends.

Ben and Jerrys did not have the financial capacity to maintain the growth rate at which it was expanding, and the management did not have the expertise to reduce their cost structure. In order to achieve economies of scale, obtain finance and reduce costs, it was necessary for them to be acquired by Unilever. The merger gave Unilever the right to completely restructure the costs and finances of Ben and Jerrys, and therefore Unilever took this opportunity in order to increase the profitability

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