Compare and Contrast Cost leadership, Focus and Differentiation Strategy in Ice-Cream Market

This article compares and contrasts the cost leadership, focus, and differentiation strategies used in the ice-cream market. It discusses how Mormor Magda's Ice-Cream Company implemented these strategies to achieve success. The article also provides recommendations for expansion in Australia.

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Table of Contents
Answer to Question 1......................................................................................................................2
Compare and Contrast Cost leadership, Focus and Differentiation Strategy that contributed
Towards Success in Ice-Cream Market.......................................................................................2
Answer to Question 2......................................................................................................................4
Recommendation of Three Strategies that could be adopted for Expansion in Australia...........4
References....................................................................................................................................7

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Answer to Question 1
Compare and Contrast Cost leadership, Focus and Differentiation Strategy that
contributed Towards Success in Ice-Cream Market
In the competitive business environment, the different firms need to be increasingly agile
and adaptive to the situation which will increase their overall competitiveness. In the fast-moving
innovative era, there are different companies which face various challenges as to meet the
demands of the customers, suppliers along with the shareholders. There has been rising tension
among the companies as they are working hard to fulfil the needs and become superior in
comparison to the other competitors. Mormor Magda’s Ice-Cream Company faced such issues in
the competitive environment, and this affected their sales negatively.
With the help of Porter’s Generic Forces, this helps in determining the relative position
and profitability which is below or above the industry average. With the help of the
differentiation strategy, Mormor Magda's Ice-Cream Company tried to be unique in the industry
along with inclusion of dimensions which are used by the buyers. While selling the ice-cream,
the company decided to improvise on the branding and product to attract the customers towards
the product which are being sold by them (Abdolshah, Moghimi and Khatibi 2018). In the early
stage, Mormor Magda's Ice-Cream Company tried to focus on the manufacturing of the ice-
cream which is naturally made with locally sourced ingredients which are free from additives.
They added different flavours of mint, strawberry, salted caramel, popcorn, toffee along with
other components.
The distribution of Mormor Magda’s Ice-Cream Business takes place in various manners
which are depending on location. The production of ice-cream through locally produced

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ingredients with the help of their distribution channel has helped them in becoming a low-cost
producer, and this will be helpful in sustaining overall cost-leadership which helped them in
becoming an above-average performer in the industry (Kandampully, Zhang and Bilgihan 2015).
On the other hand, a cost-leadership strategy which has been used by Mormor Magda’s
Ice-Cream Company is useful in managing their profitability in a competitive business
environment (Wicker et al. 2015). As to increase distribution to more food stores, innovation like
adding flavours and development of dairy-free ice-creams has been proved to be successful for
their growth. Mormor Magda's Ice-Cream Company and brand tried to use road trips to build
local demand, and this is the other method to use to increase penetration. The company
announced the same through Facebook and blogs which helped them in becoming more
competitive.
With the implementation of the cost-leadership strategy, the company had gained better profits
for team and organization, and this improved the overall sustainability of the business. Mormor
Magda’s Ice-Cream Company tried to fix the pricing such that when the customers purchase the
same from the factory, the products will be available to them at the lowest price; however, there
will be differences in costs while buying from retailers (Wang et al. 2017).
Lastly, the focus strategy which was being used by Mormor Magda’s Ice-Cream
Company was relating to the differentiated kind of product to gain market share in the
competitive environment (Abdolshah, Moghimi and Khatibi 2018). As per the different surveys
conducted by Mormor Magda’s Ice-Cream Business, they tried to understand the preferences of
the customers in the market which resulted in analysing that the present generation prefers
healthy food items which are fat-free products. The company tried to include dairy-free products

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which met the tastes and preferences of the customers. Moreover, the CSR strategy of Mormor
Magda’s Ice-Cream wherein they work with Swedish Employment agency to employ the
workers which assisted in the overall development of the skills within groups (Hasan 2018). The
company has helped in resolving issues related to sexuality in which rainbow ice-cream was
launched which resulted in positive feedback. Lastly, the strategy of utilising locally used
ingredients can be considered under the social responsibility umbrella which was the primary
focus of the respective company.
Answer to Question 2
Recommendation of Three Strategies that could be adopted for Expansion in Australia
There are different recommendations which can be used by Mormor Magda's Ice-Cream
Company to expand their business operations in the Australian market.
With the help of the Ansoff’s Matrix, the Market Development Strategy is one of the
main options which can be considered valid. In the market development strategy, the firm seeks
growth by targeting the existing products to the new market segments appropriately. In the
Australian market, the young generation prefers fat free, yet tasty and delicious food items, in
such scenario the Mormor Magda’s Ice-Cream Company can increase their market share and
brand image by selling the dairy free and fat free products to the customers effectively (Adner,
Ruiz-Aliseda and Zemsky 2016).
With the help of the respective market development strategy, Mormor Magda's Ice-Cream
Company can receive detailed competitor and market intelligence to create a new market
segment appropriately. Additionally, there can be the introduction of new distribution channels
which will be appropriate for the gaining market share in the Australian market.

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Furthermore, with the help of the Market Penetration Strategy, Mormor Magda’s Ice-
Cream Company can increase the overall sales using the different marketing techniques as to
capture the new customers in Australian market (Ennew, Binks and Chiplin 2015). There can be
the inclusion of loyalty schemes adopted by the company towards the customers which will
increase the number of loyal customers in the market along with gaining profitability in the new
market. In the Australian market, the Mormor Magda’s Ice-Cream Company can introduce
different discounts and special offers which will be beneficial for the overall success of the
company.
Moreover, Mormor Magda’s Ice-Cream Company can indulge into Joint Venture with the
competitor company as Australia is the mature market and this will be helpful for them to
increase their sales and revenues in the overall competitive environment (Cossío-Silva et al.
2016). The new marketing strategy which can be adopted by the respective brand is to use
Boston Framework which will be useful in understanding their position appropriately. Go global
with the experienced partner can assist in establishing a presence in the international market
appropriately which will be helpful in managing the operations successfully.
Lastly, product development is the strategy which can be adapted by the Mormor
Magda's Ice-Cream Company which will be useful in increasing their presence in the Australian
market (Baird and Parasnis 2011). In the Australian market, the preferences of the customers are
different from the origin country of the Ice-Cream which can require the company to incorporate
new changes in the product as to meet the different preferences of the customers and improve
their brand image in the competitive business environment of Australia (Kietzmann et al. 2011).

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There can be the inclusion of different variants of ice-cream which are most preferable by
the customers in the respective market. As the individuals are high health-conscious, this is
necessary for them to implement changes and sell the same to improve their customer service
appropriately (Dawes 2018). There can be the inclusion of repackaging of the products which
are being developed by them as to enhance their brand image in the Australian market and gain
market share effectively. There can be the inclusion of the different CSR programs which will be
beneficial for performing the things differently in the market and increase competitiveness in the
market appropriately (Bertozzi, Ali and Gul 2017).
Therefore, from the above recommendations, this can be analysed that with the
implementation of Ansoff's Matrix, these are the three strategies which can be adopted by the
Mormor Magda's Ice-Cream Company to improve the overall brand image accurately.

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References
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Banking Industry Based on Porter's Generic Strategies: Iran's Newly-Established Private Banks.
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Adner, R., Ruiz-Aliseda, F. and Zemsky, P., 2016. Breaking Trade-Offs: When is Dominating
from the Middle a Winning Generic Strategy?. In Academy of Management Proceedings(Vol.
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Baird, C. and Parasnis, G. 2011 From social media to social customer relationship management:
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Bertozzi, F., Ali, C.M. and Gul, F.A., 2017. Porter’s five generic strategies; A case study from
the hospitality industry. International Journal For Research In Mechanical & Civil Engineering
(ISSN: 2208-2727), 3(2), pp.09-23.
Cossío-Silva, F.J., Revilla-Camacho, M.Á., Vega-Vázquez, M. and Palacios-Florencio, B., 2016.
Value co-creation and customer loyalty. Journal of Business Research, 69(5), pp.1621-1625.
Dawes, J., 2018. The Ansoff Matrix: A Legendary Tool, But with Two Logical Problems.
Ennew, C.T., Binks, M.R. and Chiplin, B., 2015. Customer satisfaction and customer retention:
An examination of small businesses and their banks in the UK. In Proceedings of the 1994
Academy of Marketing Science (AMS) Annual Conference (pp. 188-192). Springer, Cham.

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Hasan, A.A.T., 2018. Customer Relationship Management (CRM) Practices of City Bank in
Customer Retention Perspective in Bangladesh. Global Journal of Management And Business
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Kietzmann, J., Hermkens, K., McCarthy, I., and Silvestre, B. 2011. Social media? Get serious!
Understanding the functional building blocks of social media. Business Horizons, 54(3), 241-251
Wang, Z., Singh, S.N., Li, Y.J., Mishra, S., Ambrose, M. and Biernat, M., 2017. Effects of
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information perspective. Academy of Management Journal, 60(1), pp.109-129.
Wicker, P., Soebbing, B.P., Feiler, S. and Breuer, C., 2015. The effect of Porter’s generic
strategies on organisational problems of non-profit sports clubs. European Journal for Sport and
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