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Dippin' Dots Case Analysis CASE ANALYSIS – Dippin’ Dots Ice Cream I. Key issues issues and problems Soarin! operatin! costs and plummetin! plummetin! sales Competition Competition "rom "rom copycat copycat products #loss o" patent$ International s%ippin! stora!e problems &etail stora!e problems – conenience "actor Lac( Lac( o" ne) !ro)t% opportunities in product lines II. Analysis o" e*ternal enironment +eneral enironment ,ec%nolo!ical ,ec%nolo!ical – better stora!e stora!e system at retail retail locationslocations Economic – operatin! costs risin! Sociocultural – innoations suc% as as slab concept- independent scoop s%op- etc surpassed surpassed Dippin’ Dots ice cream o" t%e "uture innoation Le!al – patent in"rin!ement la)suit )as dismissed- allo)in! allo)in! competition competition to sell similar products Demo!rap%ic – older !eneration still li(es Dippin’ DotsDots- as )ell as as introducin! ne)er !enerations !enerations to t%e product Industry enironment otential entrants entrants – %i!% t%reat t%reat due to loss o" o" patent/ product can can be copied by competition competition and "ormer employees Suppliers – %i!% %i!% input costs to "las% "ree0e "ree0e ice cream !ies suppliers medium po)er because o" uni1ue "ree0in! "ree0in! process 2uyers – lo) buyer po)er because t%ey pay a %i!% premium "or t%e t%e product and are more more dedicated "ans Substitutes – %i!% %i!% po)er o" substitutes because t%ere are are many substitutes – lar!e ariety o" "ro0en desserts desserts suc% as ot%er ice cream brands- "ro0en custard- s%erbets- !elato- etc. Industry competitors3rialry competitors3rialry – %i!% rialry "rom "amily "amily o)ned businesses- "ull line dairies- and lar!e international international companies Competitor enironment ,%ere are t)o !iants dominatin! 4.S. ice5cream industry6 industry6 Nestle and 4nileer LC o" London and &otterdamalon! )it% about 788 small businesses
C%allen!e "or producers is to )oo customers a)ay "rom competitors and sustain a loyal "an base by continuin! to innoate
Dippin ' Dots Inc . is a privately owned company that produces an ice-cream snack called Dippin ' Dots which they call as the Ice Cream of the Future . Dippin ' Dots are small spheres of ice cream that are the produced by flash-freezing ice cream mi in li!uid nitrogen . "side from producing small beads of ice cream that are fun to eat # the flash freezing process also made Dippin ' Dots richer and fresher tasting than regular ice cream . Dippin ' Dots was founded in $%& by microbiologist and inventor of Dippin ' Dots - Curt (ones . )r . (ones ' eperience with cryogenics led him to eperiment with flash freezing an old family recipe for ice cream creating small spheres of ice cream which became Dippin ' Dots . Curt (ones remains the current chairman of the company while its current *resident is +om ,eonard . "ccording to +he ncyclopedia of Company istories # the company had estimated sales of /0) in 1221 and has $32 employees Individual servings of Dippin ' Dots are sold at franchised outlets Dippin ' Dots franchises are located in shopping malls # amusement parks and the like . Dippin ' Dots franchises could be found in eleven countries in 4orth and 5outh "merica # "ustralia and "sia . Individual servings are also sold via specialized vending machines in various locations 5tarting 1221 # Dippin ' Dots became an offering in select )cDonald 's branches in California . +oday # Dippin ' Dots is the third largest icecream franchise in the 65" # placing behind 7askin 8obbins and Dairy 9ueen Dippin ' Dots can 't be sold in retail outlets such as groceries and supermarkets to be consumed at home like regular ice cream because the product re!uires temperatures below -12 :F which is below normal temperatures for standard freezers . Dippin ' Dots are currently produced in two facilities # one in *aducah ;entucky and another in 5outh ;orea that serves the "sia-*acific markets 5<=+ "4",>5I5 5+84?+5 - +he primary strength of the company lies in the novelty of the product . Dippin ' Dots is a novel way of delivering ice cream that is unlike any other in the market . "dditionally # the manufacturing process gives another value proposition by the way it produces richer and better tasting ice cream than the competition <";4555 - +he weakness of the company is the fact that their ice cream needs specialized e!uipment to be stored . +his greatly limits their distribution options as not every home or retail outlet has freezers that go down to -12 :F . +his weakness is apparent in the fact that Dippin ' Dots cannot be sold in tubs like regular ice cream # thus limiting the market penetration of the product as it is limited to be sold via franchised outlets =**=8+64I+I5 - =ne opportunity for Dippin ' Dots is to epand its franchising operations into the uropean )arket . Currently # there are still no franchises operating in urope .