Commerce

Executive Summary

Ice-Fili had been successful in the past, surviving various tumultuous times including the transformation of the Russian closed economy into an open economy and the financial crisis in 1998. As Russia’s largest domestic ice cream producer, they had held onto their market leadership for many years. However, increasing competition from foreign companies, along with the emergence of regional producers of ice cream led to Ice-Fili’s market share erosion in the recent years. Porter’s five forces model was the primary method to analyze Ice-Fili’s industry and its competitiveness in the industry. Segmentation analysis was used for further study of the ice cream industry in Russia. The analysis was carried on key variables like distribution channel, buying behavior, geographic locations, and product characteristics. Based on this model, various alternatives were considered. From these alternatives, it was possible to form a recommendation: Ice-Fili will need to focus on the strengthening of its distribution channel through various efforts including marketing and raising of capital while focusing on its long history and brand recognition. Above all, availability of its product to the consumers is the key to Ice-Fili’s success.

Porters Five Forces

In order to analyze the industry and environment of Ice Fili, Porter’s five forces model will be used to assess its competitiveness in the market. An illustration of the model specific to Ice Fili is displayed in Exhibit 1. The analysis will lead to the identification of various opportunities for Ice Fili, along with determination of the most appropriate strategy and associated milestone for the strategy.

Buyers are people or organizations who create demand in an industry. If buyers have significant bargaining power, industry returns can transfer to buyers in the form of lower prices. Buyer