Introduction
Founded and incorporated in 1988, Dippin’Dots Inc. specializes in making ice cream. Originally, the company was targeting the American market but later diversified into the world market. The company is touted as the “Ice Cream of the Future” meaning its products were targeting the younger generation.
Though the company markets were majorly domestic, it expanded into the international markets majorly in the middle and the Far East Asian countries including Japan, Philippines South Korea as well as Australia. Today, Dippin’Dots products could be shopped from major stores, shopping malls, water parks, amusement parks and all festivity venues all over the world.
The report will be examining the expansion strategies used by companies in particular the case of Dippin’Dots Inc. The case study analysis of Dippin’Dots Inc. will be looking at the company diversification strategies including its corporate level strategies, the business level strategies, the entrepreneurial strategies, and the cross border strategies. The analysis will also include how the company is managing its intellectual properties.
Diversification of Dippin’Dots
Dippin’Dots Inc. is a highly diversified company particularly in terms of products as well as its operations. The company started with a single product line and operation. The company began by selling BB-size pellets of flash frozen ice cream that was combined with some two dozen flavors.
The products were majorly sold to franchisees and the national account. However, by 2010, the company has diversified its operations as well as its product lines. The product lines included Dot Delicacies that targeted the international market. The Dippin’Dots expansion strategy contributed to the production of more product line moving away from ice creams to uniquely brewed coffee.
The technology used in the manufacture of these products is similar. The instant freezing below the normal freezing point that was used in the production of the ice cream was also applied in the production of new product lines such as the coffee brews. The sales strategy also improved. Before, the company was targeting the younger generation however, its target market has matured and the new products was targeting the older generation. Therefore, the company is diversified both in terms of products as well as in terms of market.
The corporate strategy applied by the company
Dippin’Dots Inc. is using related corporate strategy where the company is using its operations to expand and remain competitive into the market. Since the company was already in the ice cream and related industry, the major issue in the corporate strategy is how to put together its operations to boost its combined performance, leverage its value chain fits and establish its investment priorities.
The first corporate strategy is to sell its products to franchisees both within the United States and internationally. However, during the flat periods the company was faced with a dilemma of whether to reduce the number of franchisees or increase the number of franchisees. Increasing the number of franchisees means additional cost to the company amid flattened market.
However, the company strategy of expanding into the new market remains. The popularity and reputation of the company products has enabled its expansion into the new market. It must keep its franchises at operational level particularly when the market continues to flatten.
Nevertheless, the company is quit stringent when taking advantage of the franchising opportunities. In fact, the company is exploiting two area of monopolizing opportunities that are characterized by an even and storage. That is event-based and store based monopolizing prospects.
The company invested huge amounts for it to acclaim some of the locations, which are suitable for its business. In addition, the company has to ensure that its stores are located in areas close to big restaurants, visible and have good combination of persons on foot and auto traffic. All its franchisees in the world have these similarities. Moreover, its products must also be sold in major social events.
Besides its organized franchising strategy, the company is efficient in its value chain management. The company products are distributed to the franchisees stores within the shortest time possible before its competitors. The way the company manages its distribution channels add value and make the corporation be more competitive.
In addition, the super-cold conditions the company products are made in and stored increases the complexity of the company products. Therefore, the company products could not be found in the normal freezers both at homes and at the normal stores.
Moreover, the products must be transported in special containers and sold in their own stores. Under such conditions, the company must be effective and efficient in its distribution of the products to the market. The efficiency in value chain management becomes the competitive advantage to the company.
The business level strategy applied by the company
Even though the company is selling ice creams and brewed coffee, the products are highly differentiated making the Dippin’Dots products unique and attractive in the market. The Dippin’Dots ice creams and brewed coffee have diverse flavors that differentiate them from other brewed coffee and ice creams.
The ice creams were manufactured in flash-frozen beads that were typically served in vending packages or cups. On average, the ice creams have 90 calories and 9 grams of fat depending with the kind of flavor. The quantity of calories and fats are lower compared with other ice creams.
In fact, Dippin’Dots is a combination of the old-fashioned handmade ice creams and the space age technology. Their minute round droplets of ice creams that are manufactured under sub-zero temperatures, given out at similar temperatures characterize Dippin’Dots’ products.
The freezing process is achieved using liquid nitrogen making the Dippin’Dots’ ice creams maintain their taste and originality that could not be found in any other product. The sub-zero temperatures nearly take away the entire entrapped ice and air making Dippin’Dots’ ice cream has clean aroma and tough feel.
Not only Dippin’Dots find new ways of making ice cream but the products have proved to be much more flavorfully and richer than the normal ice creams. In essence, the Dippin’Dots products are differentiated from the competitions in terms of nutrients and richness. The market need ice creams with low fats but increased calories.
With technological advantage in production, the company offers products at low cost. In other words, the company products are affordable and are of high quality compared to the competing products. In addition, the company first position in the industry has enabled its products to be sold globally particularly on new markets. The innovativeness in the product line has also increased the company competitiveness in both domestic and international markets.
The company entrepreneurial strategy
Dippin’Dots is taking any opportunity to market its products or introduce its products into the market. After reinventing the frozen dessert the company patented the technology used and opened the stores where the product have to sold.
Within a few days after introducing the product into the market, it is distributed to the franchisees, the company stores as well as other selling points around the world. The product was transported from the production point to other destinations around world through either tracts or ships. The huge product delivery was attributed to marketing strategies that the company had put in place.
In fact, all its franchisees were putting half of the revenue into marketing or rather advertising the products. The company always targeted the younger generation and will always put in place strategies to get them attracted. Often, the firm associates its products with the celebrities. Most of the company products are being sold at parks and sports venues as well as schools. Therefore, the company will take every opportunity to market and sell its products at any opportune moment.
Given the fact that there are quite a number of similar products in the market, Dippin’Dots continues to differentiate its products according to the needs of the market. The company will always conduct the market research to understand and know the market needs and develop a product accordingly. In addition, the company increased its marketing including advertising, which has enabled its products to be known across the market niche.
How the company managing intellectual assets
The company successes have been attributed to the way the company have been managing its human resources. The company was started as a family business. However, as the business expands it required more innovative personnel to run most of its expanded functionalities. The business required marketers, the chief executives, and the franchisees managers as well as the stores managers. The way the company operates and manages in value chain requires highly innovative personnel.
With the type of structure, competitiveness of the industry and products, the company requires knowledge based strategy that is mainly personalization with some degrees of codification. In other words, the company required personnel that will increase its key strategic activities in the value chain management that will in turn make its products be distinctive in the market.
Moreover, the company requires personnel that understand the corporate, business and entrepreneurial strategies in order to increase its competitive advantage. In other words, the company requires a group of experts that will foster new inventions and new technologies, which will in turn enable the company continue producing unique products that will increase its competitive advantage.
So far, the company has retained its founder and inventor Jones as chief executive to chart the way forward. As chief executive of the company, Jones is investing in research and development to create conventional ice cream product that has super frozen dots embedded in it.
Jones was developing a new product that could withstand conventional freezers while preserving the super frozen dots in the ice cream. While these could only solve the domestic problem, Jones has to invent new products for its international markets. Jones came up with Dots Delicacies commonly known as the as the Dots Treats to be introduced in the international market.
Moreover, the company has started its online venture by selling some of its products through its website. The purchases could be made online and the products delivered according to the specification of the customers. The company has also branched out and increased its coffee based products. In fact, the coffee products were manufactured based on new concepts. For instance, frappe and espresso that could be eaten by spoon or could be made into hot coffee drinks by just adding water and milk.
The other untapped market that Jones and his team tried to enter was the market of healthy ice cream. Jones and its team, as a healthier alternative to ice cream, introduced the low fat frozen beaded dessert called Chillz made with all natural sweetner. The highly innovative team made this product targeting public schools and was distributed to schools through vending channels.
Despite the development of new products, the company experiences and resources were directed in the ice cream manufacturing and scoop shop retailing business. Dealing with supermarkets chains and vending distribution firms proved to be challenging to the firm.
However, opportunities could still be pursued through the enlargement of the franchise and national account business for scoop shops and vending machines. The company chief executive and his team has to continue assessing the situation and choose the best alternative option that would ensure the growth of the company.
In essence, the company has utilized its human resources accordingly to ensure that its products remain competitive. Moreover, the technological knowhow of the founder has enable the firm retain its leadership in product development. The distinct products in the market has enabled the firm retain its competitive advantage. Therefore, proper use of the firm’s knowledge increases its competitiveness in the both domestic and international market.
The cross border strategy the company is using
In the cross border strategy, the firm is selling standardized products that are adaptable to the local market. For instance, the company is selling ice creams and brewed coffee, which is unique and highly differentiated making the Dippin’Dots products attractive to the international and local market.
The Dippin’Dots ice creams and brewed coffee have diverse flavors that further differentiate them from other brewed coffee and ice creams being manufactured elsewhere in the world. In addition, the ice creams are being manufactured in flash-frozen droplets that were classically served in retailing packages or special made saucers.
The characteristic that is unique only to the Dippin’Dots products. Moreover, the attributes adds more value compared to other products manufactured by other companies selling in the global market. In terms of content, the ice creams have high calories and low fat depending with the kind of flavor. The high calories and low fats of the company ice creams increase the products likability internationally.
In fact, Dippin’Dots is a combination of the old-fashioned handmade ice creams and the space age expertise, a unique combination that could not be found with any company. The other innovativeness in the company products that enable international market penetration includes the product shapes, which are for all time in miniature round droplets.
In addition, the products are frozen below zero temperatures by liquid nitrogen that does not remove the original flavor as do the freezing process in other products. The originality of flavor is what differentiates Dippin’Dots products. Moreover, the sub-zero temperatures practically get rid of the entire rapt ice and air making the final product has spanking new taste and solid touch.
All these characteristics could hardly be found in most of the products in the international market. The internationalization strategy that the firm has adopted enabled its products to be sold in most of the stores globally. Though the company might use other strategies in its global expansion, internationalization becomes the major strategy.