Over the past two decades, the management of Ice-Fili has found themselves competing in an increasingly competitive Russian ice cream industry. As their profit margins were nearly cut in half to 15-20% since 1992, rivalry blossomed as Nestle and regional producers throughout Russia captured a larger portion of market share. Despite its age, Ice-Fili remained focused on just manufacturing and storage, leaving other process along the value chain to other government entities. Now under a capitalistic market, the company is left with multiple strategic options as they decide how the company should grow.
First and foremost, Ice-Fili could open its own chain of cafes – much like those of Ben and Jerry’s and other premium priced ice cream brands. However, one could caution against this plan as Ice-Fili has already solidified itself as a medium priced player. Café chains would be accompanied with high costs which Ice-Fili could struggle with since they are one of the least cost-efficient companies in the sector in regards to labor and premium ingredients.
Multiple options are also available with their product mix and distribution. With over 160 brands, they could either expand it and flood the market with no-recognizable items, or consolidate and push marketing for just a few brands. They also have countless options for their non-ice cream products. Exhibit 4 shows a much larger spike in the seasonal interest in ice cream, so during their off peak seasons they can use their factories to capitalize on other goods. Decisions will also have to be made with their retail channels. Ice-Fili is the leader in kiosks and gastronoms, but they will have to decide if they want to push into the wealthier markets by growing their presence in supermarkets and boxed containers.
The company could also expand by acquisitions. As they look to grow to markets outside of Moscow, acquiring other smaller regional players in different areas or distributors could provide them with a much...