BO1BSRE301 Business Strategy: Mormor Magda's Ice Cream Case Study

This case study analysis delves into the business challenges faced by Mormor Magda's ice cream in the Swedish market. It explores issues such as the lack of entrepreneurial experience, difficulty in understanding investment calculations, and shifting consumer preferences towards healthier alternatives. The analysis includes a Porter's Five Forces framework, assessing supplier power, buyer power, the threat of new entrants, the threat of substitutes, and existing industry rivalry. Recommendations focus on building a culture of innovation, diversifying product lines to include healthier options, and strengthening marketing communications to maintain a competitive edge. The report concludes that by adapting to changing consumer needs and fostering internal innovation, Mormor Magda can improve its sustainability and profitability within the competitive ice cream industry. Desklib provides similar solved assignments and past papers for students.

Running head: CASE STUDY ANALYSIS
Case Study Analysis
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CASE STUDY ANALYSIS
Table of Contents
Introduction................................................................................................................................2
Overview of the case study........................................................................................................2
Central issues.............................................................................................................................3
Building a culture of innovation................................................................................................4
Porter’s five forces analysis...................................................................................................4
Suppliers’ power....................................................................................................................4
Buyers’ power........................................................................................................................4
Recommendation and conclusion..............................................................................................6
References..................................................................................................................................7

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CASE STUDY ANALYSIS
Introduction
The purpose of the following report is to review a business case study of Mormor
Magda’s ice cream and their performance in Swedish ice cream industry (Fundedbyme.com,
2019). As their business journey was not smooth and full of difficulties, this report will
discuss organisational issues and try to provide recommendations to mitigate existing and
future challenges.
Overview of the case study
Angela Hafstrom decides to start an ice cream business being driven by the fact that
Sweden lacks innovation when it comes to making ice cream. During her paternal leave for
the third child she felt reluctant to find a new job further and decided to start planning on her
business idea of producing ice cream which can compete with international brands (Nenycz‐
Thiel and Romaniuk 2014). Although, Angela had planning yet she did not have prior
experience of entrepreneurship. Therefore, she started with marketing the idea through setting
up a blog about her life. Consequently, she gained popularity as well. After that she decided
to do market research from collecting feedback from food store owners and retail chains.
After the preliminary investment she started off with establishing first ice cream
factory in a small town with a handful of employees. Due to good marketing and offered
quality all of their products sold out within two days and it created problems as they were
running on low workforce. With the recruitment of new employees, investment increased. In
this due course, no product diversification had been performed. Due to lack of innovation,
company experienced loss. Then, with the help of few friends and sibling, Angela explored
wide entrepreneurship ideas and innovative recipes as well to compete with existing rivals
and sustain within industry.

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CASE STUDY ANALYSIS
This study has covered from the areas of setting a new business plan to support the
idea and implement it in reality. Not only setting up a business but nurturing it for future
profitability and sustainability is the key to gain long term success. With the help of
established entrepreneur friends and family members Angela has got through complications
of competition. Simultaneously, as stated in Urde, Baumgarth and Merrilees, (2013), the need
of innovation, branding and investment according to the business demand has been
understood in this due course.
Central issues
Angela was young in business industry. She was trusting on her intuitions and
whatever little help she received from her brother was enough to operate her business at
initial level. However, as the time progresses she realized the difficulty of understanding
investment calculations in different sectors of business. Consequently, a board of directors
were formed to resolve such issues with the help of her brother, one of his friends. A web
designer and art director were recruited from their familiar circle to make the base of web
marketing strong considering it as the most cost effective way of campaigning. As stated in
Topcu (2015), like most of the aspiring small ice cream chains across the country, they
recovered the struggle with the competitors yet to maintain a sustainable business Mormor
Magda is facing challenges due to shifted customer preferences.
Consumer behaviour towards ice cream has changed over the years. People used to
prefer good quality ingredients to be involved into their favourite frozen dessert. However,
according to the industry trends as described in Malik, Willett and Hu (2013), ice cream has
been considered unhealthy and sinful dessert that is restricting young generation from having
it. Rather, fitness freak people would like to have Greek yogurt and fruit based frozen dishes.
According to Agarwal et al. (2015), the market is demanding healthy alternatives of diary

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CASE STUDY ANALYSIS
products which must gluten free or sugar free. It can be made of soya milk for vegans, which
eventually makes it healthier. As stated in Augustin et al (2013), use of caramel, chocolates
and heavy dairy are some of the products people have started to avoid intentionally to adapt
healthier lifestyle choices. Therefore, Mormor Magda needs to work on product
diversification to produce a new range of healthier alternatives in order to sustain competitive
advantage.
Building a culture of innovation
Rather than following strict methodology, it would be highly effective if Angela
choose to develop a culture of consistent innovation within her company. As she was free
spirited and learnt business following her experiences, it would not be wrong to develop a
corporate culture which encourages employees’ creative ideas and innovative behaviour too.
Following a strict methodology can be predictive and strategies can be easily imitated too.
This strategy of internal practice of innovation is unique and confidential. This culture has
been developed as feasible as possible according to the company resources and capabilities.
Gradually, the management look up to the processes for betterment if they can amend it or
change it thoroughly.
It must be used when it comes to address changing customer behaviour in case of
choosing healthier diet (Håkansson 2015). Every business must look up to the ways which
are appropriate for their company profile but make sure not to imitate from other
implementations. It is a process which will help Angela to understand her people’s capability,
measure resources and culture creative ideas to treat existing adaptation struggle. In this
course, competitors’ analysis will help the company to recognise future issues apart from
product diversity.

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CASE STUDY ANALYSIS
Porter’s five forces analysis
Suppliers’ power Buyers’ power
As a small business firm there is huge change
of facing high bargaining power of suppliers.
Therefore, they must develop trustworthy
relationship with at least five to seven
suppliers if they want to switch between
them in a situation of price hike.
Buyers’ power is high as they have launched
themselves newly in market. With great
marketing comes popularity and curiosity.
With affordable price range Mormor Magda
is running on high buying power of
consumers.
Threat of new entrants Substitution Existing rivals
Threat from new ice cream
business is comparatively
low in a saturated ice cream
industry and even if new
company enters it would take
as long as Magda is taking
unless they are coming from
highly experienced
entrepreneurship
background.
There are so many
companies; specially branded
ones are experimenting with
healthy alternatives (Mead et
al. 2013).
Swedish ice cream industry
is highly dominated by
leading ice cream brands. As
described in Faccio et al.
(2013), big brands have more
understanding in areas of
investment, advanced
logistics management
knowledge and experienced
employees unlike small
businesses have.
Although, local entries can
be handled yet foreign
entrants must be handled
To avoid the threat of
substitution detail market
research is necessary to
Being a small firm
innovation is the way to set a
standard of exception.

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CASE STUDY ANALYSIS
with care as they can easily
occupy most of the market
share exploiting the brand
name. Therefore, marketing
game should be strong
sharing news of new ventures
and offerings.
understand core market need
and preferences to innovate
and create products.
Recommendation and conclusion
As understood from the case along with above analysis, Swedish ice cream industry
has been dominated by large ice cream businesses which are good at handling operations in
terms of doing right amount of investment and far more strong that Mormor Magda in terms
of employee experience. In order to sustain combatting the high competition and dynamic
consumers interest the company needs to maintain a strong marketing communication
through various tools like campaigning, promotions, developing public relations and many
more. Products must be invented following the interest of the consumers. Moreover, to ensure
growth of an established product marketing activities must be appropriate and product
differentiation is needed to sustain the growth of a certain product. Maturity stage of a
product is when it can face highest competition. Moreover, to adapt with the changed
customers’ preference they can conduct survey to get the instant feedback and practice the
culture of innovation accordingly. It will be helpful to address faulty areas of human resource
department as well. With efficient marketing, research and employee development the
trending criteria can be explored and customers can be satisfied too in this course.

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CASE STUDY ANALYSIS
References
Agarwal, S., Beausire, R.L., Patel, S. and Patel, H., 2015. Innovative uses of milk protein
concentrates in product development. Journal of food science, 80(S1), pp.A23-A29.
Augustin, M.A., Udabage, P., Juliano, P. and Clarke, P.T., 2013. Towards a more sustainable
dairy industry: Integration across the farm–factory interface and the dairy factory of the
future. International Dairy Journal, 31(1), pp.2-11.
Faccio, M., Ferrari, E., Persona, A. and Vecchiato, P., 2013. Lean distribution principles to
food logistics: a product category approach. International Journal of Operational
Research, 16(2), pp.214-240.
Fundedbyme.com (2019). Mormor Magdas Glass / Mormor Magdas Ice Cream. [online]
FundedByMe. Available at: https://www.fundedbyme.com/campaign/5367/mormor-magda-
ice-cream/ [Accessed 8 Jan. 2019].
Håkansson, A., 2015. Has it become increasingly expensive to follow a nutritious diet?
Insights from a new price index for nutritious diets in Sweden 1980–2012. Food & nutrition
research, 59(1), p.26932.
Malik, V.S., Willett, W.C. and Hu, F.B., 2013. Global obesity: trends, risk factors and policy
implications. Nature Reviews Endocrinology, 9(1), p.13.
Mead, E.L., Gittelsohn, J., Roache, C., Corriveau, A. and Sharma, S., 2013. A community-
based, environmental chronic disease prevention intervention to improve healthy eating
psychosocial factors and behaviors in indigenous populations in the Canadian Arctic. Health
Education & Behavior, 40(5), pp.592-602.

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CASE STUDY ANALYSIS
Nenycz‐Thiel, M. and Romaniuk, J., 2014. The real difference between consumers'
perceptions of private labels and national brands. Journal of Consumer Behaviour, 13(4),
pp.262-269.
Topcu, Y., 2015. Turkish consumer decisions affecting ice cream consumption. Italian
Journal of Food Science, 27(1), pp.29-39.
Urde, M., Baumgarth, C. and Merrilees, B., 2013. Brand orientation and market orientation—
From alternatives to synergy. Journal of Business Research, 66(1), pp.13-20.