Mormor Magda's Ice Cream Case Study

This case study examines the internal and external factors affecting Mormor Magda's Ice Cream, a Swedish ice cream manufacturer. It utilizes SWOT and PESTLE analyses to identify strengths, weaknesses, opportunities, and threats. The study also examines the company's core competencies and recommends strategies for future expansion, considering competitive rivalry, threat of substitutes, new entrants, supplier bargaining power, and customer bargaining power. This content is available on Desklib, a website providing past papers and solved assignments for students.

CASE STUDY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysing Companies internal and external Factors...................................................................1
Core competences of the company and how they can sustain a competitive advantage............4
Recommendations for the future expansion strategy of the company........................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Mormor Magda’s ice cream is a small ice cream manufacturer with their main factory
located in Taberg, Sweden. This case study will lay emphasis on all the internal and external
factors of the company and analyse them with the help of various analysis methods, after this
core competencies of the company will be discussed to sustain the competitive advantage and at
last recommendations will be given for the future expansion strategies of the company
(Aschemann-Witzel and et.al, 2017).
MAIN BODY
Analysing Companies internal and external Factors
There are various internal and external factors that can affect the Mormor Magda's Ice
Cream. Internal factors such as findings source of income, investments, companies location,
equipments, facilities, employees audience etc. and external factors like competition, political
factors, economic environment, opportunities, threat etc. Internal and external factors of Mormor
Magda's ice cream can be analysed either by SWOT analysis or PESTLE analysis.
SWOT Analysis of Mormor Magda's ice cream
Strength:
 One of the main factors of the company was its unique and variety of flavours they serve
like dairy-free ice creams which were one of the factor for their success. They have
variety of products that are totally different as compared to other ice creams factories.
This has attracted many people, especially those individuals with allergy as companies
dairy free products has helped them to satisfy their needs (Grant, 2016).
 Another strength was their reasonable cost of ice creams which attracted many
customers. There product cost was so reasonable that at the first two days of their
opening they had 650 customers queue outside their factory.
 They invested in local business to get potential return on sum invested.
 Many of their important investments also helped them to grow like purchasing new
vehicles for transportation, purchasing sales equipments, installing cooling equipments
etc.
 Their ice creams contain low amount of air which makes it much heavier and better in
taste as compared to their competitors (SWOT Analysis, 2019).
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 Sales in Jonkoping also boost their turn over due to which they are able to maintain their
growth which helped them to make huge profit.
Weakness:
 Not selling waffle cone became one of the main reason they made loss as it was their
biggest reason they made profit.
 They also abandoned selling mobile waffle and as a result it became a reason for their
loss more than SEK159,000.
 To make better tasting ice creams they have to use more raw materials which made it
much costlier for them as their supplier charged per KG.
 Product marketing was also one of their major weakness which was needed for growth of
their business (Thi, Lin and Kumar, 2016).
Opportunities:
 Crowdfunding provided investors with opportunity to invest in the company in return for
shares in their company which eventually helped their business with more investments.
 Focusing on product quality also gave them an opportunity to grow and expand in
different cities.
Threat:
 Their market is highly seasonal all around the world like in summer their single ice
creams are sold more while family packs are sold less overall resulting in making profit
while in winter their sales decreases resulting in low profit.
 One of the biggest threat to their business was rising competition in this field like
Unilever. Unilever was a company which gave a tough competition to Mormor Magda's
ice creams. It is one of the most dominant ice cream business in Sweden which has a total
market share of 47%.
 Potential challenges of competitors is high however their dairy free products are their
hope to rise by attracting new customers (Savino, Manzini and Mazza, 2015).
External factors of Mormor Magda's ice cream can be analysed with the help of PESTLE
Analysis which has been explained as below:
PESTLE analysis of Mormor Magda's ice creams
 Political: Political factors influence the food industry in many ways. All the health and
safety standards are important for all the businesses to follow. If found that any health
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and safety standard has been violated then that company will be fined heavily and some
strict actions will be taken against them. Ice cream industry is strictly monitored and
regulated. Mormor Magda's ice creams need to follow all the standards while making and
serving their variety of flavours. They also need to maintain their product retail price as
Sweden's taxation is at very low level. Mormor Magda's ice creams also need to
maintain the quality of their products as Sweden is a very safe country with strict
legislation.
 Economical: Sweden is one of those countries whose economic growth is steady where
more than 20% of population earns 4X than the bottom 20%.Demand of premium and
quality ice cream is continuously increasing in Sweden which has created an opportunity
for Mormor Magda's ice creams to grow and expand their business. Demand for allergic
free products has also increased chances of growth of the company as economic stability
of Sweden is high(Harnesk, Brogaard and Peck, 2017).
 Social: Increasing health awareness in youngsters is impacting ice cream business
rapidly. Mormor Magda's ice creams need to maintain and improve their ice cream
quality and should focus on making low quality ice cream. Sweden is not an exaggerative
country they do not accept rapid changes as they have a very time controlled culture and
believe in straight forward communication. So they need to focus on improving their
current products instead of introducing new products. They should focus on the social
pattern of their country and deliver low calorie ice creams they can even replace sugar
with plant stevia.
 Technological: Sweden stands on number one position in ranking of the global
information technology report. It is also one of the leading country which is leading in
technology discoveries and innovation. This technology advancement in Sweden has also
helped Mormor Magda's ice creams in better seal and packing system. Internal processes
has also increased and made better due to this use of technology. It is one of the main
source of competitive advantages in fact mostly investments done by Mormor Magda's
ice creams was on technology only.
 Legal: Each and every business in Sweden need to register themselves compulsorily at
the Swedish companies' registration office. Trademark of the company must be registered
in Sweden so that all the legal protection can be obtained. If Mormor Magda's ice creams
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needs to open a new branch in Sweden then they need to take prior permission from
financial supervision authorities of Sweden. Sweden government also helps business if
they follow their laws properly in many ways like by providing them loans, low rent
industrial park, economic frees zones etc. So Mormor Magda's ice creams need to design
their strategies in such a way that they do not violate their countries lows especially
health and safety law which is taken very much seriously. This will help them in smooth
running of their business. Environment: Mormor Magda's ice creams need to run their business in a very
environment friendly manner as Sweden is one of the most sustainable country in the
world with the least level of carbon dioxide emission and with more than 47% use of
renewable resources for energy. So they need to focus on maximum usage of renewable
resources. This has created awareness within Sweden's citizens and focus on using
products of companies who use natural resources that has minimal impact on the
environment (Lindegaard and et.al, 2016).
Core competences of the company and how they can sustain a competitive advantage
For discussing the core competencies of Mormor Magda's ice creams and ways they can
sustain a competitive advantage can be explained by Porters five force model.
Porters five force model
This model helps in determining the level of competition available in that business (Bhat,
2015).
 Competitive Rivalry: Competition in the market and its level has been continuously
changing overtime. It allows companies to work hard and develop products in order to
attract their customers. In this ice cream industry level of competition is very high.
Popularity of Mormor Magda's ice creams in Sweden has also given rise to the
competitive level. One of the largest competitor of Mormor Magda's ice creams is
Unilever which holds almost 47% of Sweden market share. So it can be said that the
competitive level in Sweden for Mormor Magda's ice creams is much high so in order to
sustain the competitive advantage they need to focus on their uniqueness and quality of
their products.
 Threat of Sustainability: Substitution in ice cream industry is very high and includes all
the products that have similar purpose and have almost equal price. Factors that increase
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the threat of substitute are cheap and beneficial alternatives, low switching cost, quality
and awareness among customers. This has very low threat on business of Mormor
Magda's ice creams as they have loyal customers due to their healthy and variety of
products especially their dairy free ice creams which has attracted many customers. Their
dairy free ice creams has created threat to other regular ice cream m business and as a
result it helps them to sustain the present competitive advantage.
 Threat of new entrant: Popularity of Mormor Magda's ice creams in Sweden has
decreased the threat to new entrant. If new ice cream companies are to set up they will
face a hard time in order to compete with Mormor Magda's ice creams in various ways
like starting a new business will demand high capital investment, competing with brands
already established increases competitive level for them. So in threat to new entrant
Mormor Magda's ice creams already has a competitive advantage for sustaining (Lazarte
and et.al, 2015).
 Suppliers bargaining power: Bargaining power of supplier is comparatively weak in
this industry as competition among suppliers is much higher in this industry as there are
many substitutes available for suppliers in this field which makes their bargaining power
much weaker. Mormor Magda's ice creams strategies give farmers great opportunity to
grow which restrict them to use their bargaining power and do not give them power over
companies to supply raw materials. Its easy for companies to choose suppliers out of
many others. So it gives an advantage to Mormor Magda's ice creams to sustain the
competitive advantage. Customers bargaining power: Power of buyer is much higher in this industry which can
affect the profitability of the company as customers have many substitute available to
switch if their demands and needs are not fulfilled. As today's customers are price
sensitive, need good quality products, variety of range in products. So in order to sustain
competitive advantage they can use social media to attract potential customers and to
engage with them. It will help them to use various channels such as Instagram etc. to gain
instant attention of their customers(Hasan, 2015). With the help of this they can promote
their brand, products, variety of range, quality etc.
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Recommendations for the future expansion strategy of the company
Mormor Magda's ice creams can use various strategies for future expansion of their
company in many ways. First they can try to grow their existing products in the current existing
market by decreasing their product prices, increasing promotion and distribution ways, by
offering their current ice creams differently in a different packaging to attract customers. Second
they can try to enter into a new market with their existing products by focusing on new
customers this will help them in entering into a new market and give them benefits of economies
of scale if their output is increased. They can also introduce new products into existing market to
attract new customers like they had done before by introducing dairy free products in their
existing market which helped them to attract new customers. At last they can try to introduce
new products into a completely new market, but it is a bit risky strategy as both products and
market are new and their effect is unknown to the company. Company can use any of the above
strategy for the future expansion of their company.
CONCLUSION
From the above case study it has been summarized that there are many internal and
external factors that affects the growth of the company. These factors had been explained with
the help of various analysis factors.
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REFERENCES
Books and Journals
Aschemann-Witzel, J., and et.al., 2017. Key characteristics and success factors of supply chain
initiatives tackling consumer-related food waste–A multiple case study. Journal of
cleaner production. 155. pp.33-45.
Bhat, R., 2015. Varying amylose and total starch content in potato tubers derived from Finland
and Sweden.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Harnesk, D., Brogaard, S. and Peck, P., 2017. Regulating a global value chain with the European
Union's sustainability criteria–experiences from the Swedish liquid transport biofuel
sector. Journal of Cleaner Production. 153. pp.580-591.
Hasan, T., 2015. economic Analysis Of Small Scale Dairy Buffalo Enterprises At Some Selected
Coastal Areas In Bhola District.
Lazarte, C.E., and et.al., 2015. Phytate, zinc, iron and calcium content of common Bolivian food,
and implications for mineral bioavailability. Journal of Food Composition and
Analysis. 39. pp.111-119.
Lindegaard, K.N., and et.al., 2016. Short rotation plantations policy history in Europe: lessons
from the past and recommendations for the future. Food and energy security. 5(3).
pp.125-152.
Savino, M.M., Manzini, R. and Mazza, A., 2015. Environmental and economic assessment of
fresh fruit supply chain through value chain analysis. A case study in chestnuts
industry. Production Planning & Control. 26(1). pp.1-18.
Thi, N.B.D., Lin, C.Y. and Kumar, G., 2016. Waste-to-wealth for valorization of food waste to
hydrogen and methane towards creating a sustainable ideal source of bioenergy. Journal
of Cleaner Production. 122. pp.29-41.
Online
SWOT Analysis. 2019 .[Online]. Available Through: <https://www.liveplan.com/blog/what-is-a-
swot-analysis-and-how-to-do-it-right-with-examples/>
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