Ice-Fili case - Essay Example

Ice-Fili By 27th July Manufacturing of Ice cream is among the growing activities in Russia. Local industries, as well as the international firms, have been making their way into the country, taking into consideration of a large market in Russia. Ice-Fili is one of the Russian firms that is doing well in the ice production and sale in Russia. The firm made a top spot in 2002 after making a sale of over $25 million (Rukstand, et al., 2007). The firm was able to beat the well-known international firms such as the Ben and Jerry and the multinational giant, Uniliver.

The firm have been making progress in the market since its establishment in 1992. The firm’s Chief Executive Officer Anatoly Shamanov has been working hard to see that the firm maintains its market share that has been declining due to the invading multinational firms. Given this great income, there are some external factors that that possess a threat to the ice cream firm. These factors take an acronym PESTEL standing for Political, Environmental, Social Technological, Economical and Legal issues (Rukstand, et al., 2007). The combination of the factors may result to a positive development of the ice cream industry or a negative development depending on their level of development.

Political factors The political situation in Russia is not stable. There have been a stable government in Russia but its influence in the international polices have not been a positive note. The investors are becoming worried over Russia international policy that may lead to war with the international community. A recent development that has seen Ukraine looses its control over its boarders is a challenging issue. The international communities are threatening to take some economic measures as a threat to Russia.

Given that Ice-Fili is a local firm that depend on the local population for its development, the political instability and the sanction threats that are posed by the international communities may hinder the implementation of the strategies that have been developed by the company CEO. Environmental factors The environment also affects the nature of business. The environment dictates how the raw materials will be produced and when the customers will be available for the consumption of the product.

Milk is commonly used in production. There is a decline of quality fat milk required by the firm. Therefore, the firm will need to dig deep in the pocket to secure high quality milk that is available. The high prices enable the firm to secure more of the raw materials given that there are other companies that require them. Given that the country is one of the nations that suffers from long winter seasons, the sale of the ice cream usually goes down during this time. The majority of the country is in the arctic, and due to the low temperature, there ice cream do not attract population from those regions.

Therefore, the ice firms depend on the warm southern region for its market. Technological factors Russia is one of the countries with the best technology. Ice-Fili can utilize this technology to produce the best products. The company utilizes this technology to produce the attractive packaging materials. These materials help in maintaining the customers for the commodity produced. The materials can also be transported efficiently without breakage. Economic Factors The Russian economy have seen a positive growth over time.

The high economic growth ensures that people have an increased purchasing power, and therefore the sale of the ice cream will be high in the future. Fosters five fosters model Supplier Power Competition is all about who supplies the commodity first to the community. The Ice-Fili firm is considering moving its operation to new areas by setting ice cream cafes over the country. The reason is to increase its superiority in supplying the ice cream. It is also important to note that the supply of the raw materials into the firm dictates the volume of the ice cream supplied to the customers.

Threats of new entrants The companies that are entering into the field affect the competition into the market. To make the entrance easy, the firm need to produce cost effective high-quality products. Customers will always go for low cost and quality products. When the firm takes a step to introduce its products into a foreign market, it must comply with the various regulations set the government. Russia allows a liberal economy where multinational firms can set up their production units in the country.

The Ice-Fili must, therefore, ensure that it secures its market by offering high quality and cost effective products. Threats of Substitutes Customers usually prefer to use some other commodities that serve the same purpose with ice cream if the cost of ice cream is higher. The substitute of ice cream can be any frozen food like milk. Therefore, to make sure Ice-Fili survives in the current market, it will have to adjust its prices to make it attractive to the consumers. Low prices of ice cream will lure the customers to buy the commodity rather than going for frozen milk.

Buyer power Industries must consider the consumers ability to purchase their products. Not every customer will be able to buy a large container of ice cream. Therefore, the Ice-Fili needs to have different containers from small to large ones in order to serve all the customers. Degree of Rivalry Competition is all about rivalry. A number of ice producing firms are entering the country from within the nation and internationally. The products’ price and the quality may be the same to those offered by the Ice-Fili.

The firm, therefore, need to have a different way of attracting customers like packing in attractive containers, advertising their products and giving their different brands some attractive names that their customers will feel well to be identified with. In conclusion, the firm’s future progression is not in doubt. Its strategic position as a homegrown company makes it a step ahead of the multinational firms in profit making. The CEO’s strategy to open up ice cream cafes places the firm on a profit making ground since most of the firms do not offer such services.

Their $50million investment plan may be beneficial if the management adheres to good investment programs. References Rukstand, M., Wells, J. & Yen, P.-l., 2007. Ice-Fili. [Online] [Accessed 16 .9 .2014].