ice-cream war presentation
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ICE CREAM WARNestl vs. Unilever
2007
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Presentation Outline
1. Case Abstract
2. Key points
3. Discussion Questions
4. Recommendation
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Case abstract
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Case abstract
USD57 billion industry
Nestle & Unilever account for 1/3 of the market, the
rest are highly fragmented
Growing and profitable industry with increasing sales
in different markets
2 giants started their head-to-head war since the
1990s
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Key points
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Acquisition Campaigns
Nestle Unilever
obtained the rights to sell
Hagen-Dazs in the U.S.
and Canada; bought
Mvenpick
17.5% share of the world
market
gobbled up Ben & Jerry's;
acquired Breyers Ice
Cream
16% share of the world
market
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Similarities
Super premium products
Health consciousness
Asia Pacific region: the biggest growth prospect
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Discussion questions
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1)Why is the ice cream business so
attractive for Nestle and Unilever?
The ice cream sale in the world is $59 billion, Western Europe: $21.5 billion, North
Americans: $16.3 billion worth
Ice cream business is in a growing and profitable business
Global ice cream sales are rising 2.5% annually and will hit $65 billion in 2010.
In China and Brazil, the annual sales are soaring 8.5% and 8%, respectively.
Nestl took over Hagen-Dazs, Dreyer's, and Swiss brand Mvenpick. Unilever
bought Breyers Ice Cream and Ben & Jerry's. Today, Nestl reached a 17.5% share
of the world market, while Unilever is close behind with 16%.
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Profit in first-half 2007
Nestle Unilever
nearly 20% of its $42billion revenues come from
milk products and ice
cream division
$900 million in profits
ice cream and beveragesdivision supplied just over
20% of its $26.7 billion\
ice cream alone accountedfor 10% of Unilever's $3
billion
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2)What are the pros and cons of focusing on
the super premium ice cream category?
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Benefits
Highly fragmented market
=> boost differentiation of products
Dreyers Grand Ice (Nestl); Ben & Jerrys
(Unilever) are famous for lower-fat and lower-
calories
=> fit for Health Consciousness trend Better reputation
Take advantage of existed customers
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Problems
Highly fragmented market, there are too many competitors
=> customer loyalty is not high, can not satisfy every nations
demand, esp. Chinese market
Hidden competitors occupy nearly 65% of the market
=> high risk of losing customers
Huge profit and revenue come from super premium ice-cream
=> high financial risk
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3)What attraction does Asia have for Nestle
and Unilever?
Asian market penetration remains low
The increasing globalization
Tropical climate countries
High young population
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Recommendation
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For supper premium ice-cream segment
- New types
- Focus differentiation
- New supplier & technology to reduce cost
For expanding in Asian market
- New flavour- Acquire local business
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Q & A
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Thank you
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