MBA306: FINANCIAL MANAGEMENT

Case Study #1: Ben and Jerry

I. BRIEF BACKGROUND OF THE CASE

The well-known American ice cream business Ben & Jerry's Homemade
Holdings Inc. was founded by Ben Cohen and Jerry Greenfield, who are more
commonly referred to as Ben & Jerry. By creating distinctive and excellent ice cream
flavors, they founded the business in 1978 and quickly rose to prominence in the ice
cream sector.
Ben & Jerry's Homemade Ice Cream formally began operations on May 5, 1978.
Their distinctive flavors, like Cherry Garcia, Chunky Monkey, and Phish Food, became
well-known and aided in building their brand. Additionally, Ben & Jerry's became well-
known for its socially conscious approach, which incorporated progressive principles
and supported a number of causes.
The business steadily expanded, adding more scoop shops both domestically
and abroad, and increasing its distribution. Ben & Jerry's was purchased by the global
food conglomerate Unilever in 2000, but it continued to operate as a separate
subsidiary with its own board of directors.
Ben Cohen and Jerry Greenfield were actively involved in the organization's
management and creative departments throughout their careers. They frequently used
their platform to address social and environmental issues and carried out programs like
obtaining ingredients from fair trade suppliers and assisting regional communities.
Today, Ben & Jerry's is a well-known brand all over the world, known for its
extensive selection of ice cream flavors, dedication to social responsibility, and creative
business methods. Beyond their entrepreneurial success, Ben Cohen and Jerry
Greenfield have left a lasting legacy by motivating other companies to pursue a balance
between profit and social and environmental responsibility.

Ben and Jerry's has incorporated product differentiation into its general corporate
strategy in order to command a higher price because higher quality ice cream typically
costs more than the economy and regular types of ice cream. The use of five premium,
all-natural ingredients and the creative flavors of Ben and Jerry's ice cream serves as
an example of how strategically using product differentiation can give businesses an
edge in the ice cream market.
II. POINT OF VIEW
 From Ben & Jerry’s perspective, the main objective is to uphold the company's
core principles and social and environmental awareness while acting as a subsidiary of
Unilever. The company wants to make sure that neither its commitment to social
responsibility nor its distinctive brand identity are compromised. Ben & Jerry's wants to
find solutions that will enable them to continue having a positive impact on the world.
The company believes that profitability and social/environmental consciousness can go
hand in hand.
From Unilever's perspective, the main priorities are increasing profitability and
coordinating Ben & Jerry's operations with the organization's overarching goals and
strategies. While ensuring that Ben & Jerry's adheres to its own corporate goals,
Unilever hopes to benefit from the brand's popularity and reputation. Although Unilever
recognizes the importance of Ben & Jerry's social responsibility programs, its ultimate
obligation is to its shareholders and the company's overall financial performance.
Finding a balance between these two viewpoints is the difficult part. Ben &
Jerry's wants to keep its independence, principles, and socially conscious business
practices, while Unilever wants to better integrate its subsidiary's operations into its
overall corporate structure. The chosen solutions should take into account the concerns
of both parties and seek to produce a win-win situation that upholds Ben & Jerry's' core
principles while honoring Unilever's corporate goals.
III. STATEMENT OF THE PROBLEM
The challenge for Ben & Jerry's as it grows and becomes more well-known as a
company that values social responsibility is to uphold its core principles and mission
while operating as a subsidiary of a bigger multinational corporation, Unilever. To
ensure that Ben & Jerry's stays true to its roots and maintains its distinctive brand
identity while navigating the complexities and potential conflicts that arise from its
corporate relationship, the challenge is to strike a balance between profitability and
social/environmental consciousness. Since the business also depends on one exclusive
distributor. Because of this, the company not only becomes extremely exposed in the
event that this distributor becomes unavailable, but it also forfeits control over its
distribution networks. Cost control will become increasingly crucial as the major rivals
increases pressure on prices. Sales in the superpremium ice cream sector have already
been impacted by the overall deteriorating US economy. B&J runs the risk of becoming
trapped in the weak American market if it does not respond to this situation.
V. ALTERNATIVE COURSE OF ACTION
Alternative Solution1: Maintaining Autonomy Within Unilever as an Alternative Solution
If Ben & Jerry's and Unilever could agree to a high level of autonomy in decision-
making, the company could maintain its distinctive brand identity and socially
responsible business practices. To guarantee that Ben & Jerry's maintains control over
important aspects like ingredient sourcing, product development, and community
initiatives, this would entail establishing precise guidelines and agreements with
Unilever.
Alternative Solution 2: Accountability and Transparent Reporting
Ben & Jerry's could put in place a system of open reporting and accountability to all
stakeholders to allay worries about compromising their values. This would entail
routinely informing stakeholders about the company's social and environmental
performance, including customers, staff, and advocacy groups. Ben & Jerry's can
uphold trust and show that they are dedicated to their values by being open and honest
about their initiatives, difficulties, and progress.
Alternative Solution 3: Collaborative decision-making
A joint decision-making procedure between representatives of Ben & Jerry's and
Unilever could be established. This would guarantee that important choices take into
account Unilever's business interests while staying true to Ben & Jerry's mission and
values. Both parties can cooperate to find win-win solutions and avert potential conflicts
by encouraging open communication and collaboration.
Alternative 4: An impartial board of directors
Ben & Jerry's could push for the creation of an impartial board of directors to supervise
business operations and guarantee adherence to company values. People who are
dedicated to social responsibility and have a thorough understanding of Ben & Jerry's
mission would make up this board. Their duties would be to offer direction, keep an eye
on decision-making procedures, and protect the company's core values from any
potential threats.
Alternative 5: Engaging Consumers and Activism:
Ben & Jerry's could actively involve its customers and use their support to sway
Unilever's decisions. Ben & Jerry's can persuade Unilever to put social and
environmental initiatives at the top of its priority list by leveraging the power of consumer
activism and maintaining a close relationship with its clientele. This can be done by
organizing campaigns, petitions, and collaborations with organizations that share the
same values in order to develop a unified voice for change.
Alternative 6: Changing the Organization's Internal Structure
The competitive edge of the business may be increased with simple adjustments to the
processes and internal environment without harming the company's reputation among
customers. Even if this might have some short-term negative effects on the workers, it
will safeguard their workplace and benefit them in the long run. B&J should establish
product teams that involve all employees from all divisions. This would combine the
processes used in creating a new product. Cross-functional collaboration could hasten
production and allow B&J to launch inventive products more quickly.
 These additional options offer Ben & Jerry's various strategies for navigating the
difficulties of being a subsidiary while adhering to their social and environmental values.
The final solution or solutions should ensure a sustainable and positive future for the
business and be in line with its mission.