Momor Magda's Ice Cream: Business Strategy, Expansion in Australia

This case study provides an analysis of Momor Magda's business strategies, including cost leadership, focus, and differentiation, and their impact on the company's success in the ice cream market. The cost leadership strategy helped reduce operational costs, while the focus strategy targeted health-conscious clients with natural and organic ingredients. The differentiation strategy emphasized unique features and high-quality products. The study also explores three potential strategies for Momor Magda to expand its business in Australia: crowdfunding, channel distribution, and strategic partnerships, including exporting and licensing. The analysis highlights the importance of understanding market dynamics, leveraging local brand equity, and ensuring customer satisfaction for successful business expansion. The author concludes that the focus strategy could be the most beneficial for implementation by the company to sustain in the competitive marketplace.

Running head: BUSINESS STRATEGY
Business strategy
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Table of Contents
Contrasting the strategies adopted by Momor Magda...............................................................3
Three major strategies adopted for expanding the business in Australia...................................5
References..................................................................................................................................6

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Contrasting the strategies adopted by Momor Magda
The major strategies adopted by Momor Magda include the cost leadership strategy,
focus and differentiation strategies. The cost leadership strategies are mainly adopted by the
business organisations to improve the business performance and effectiveness and reduce the
costs of production to compete with the rivalries within the specific industry with much ease
and effectiveness. According to D. Banker, Mashruwala and Tripathy (2014), the cost
leadership strategy has helped in reducing the operational costs, furthermore ensure
production of the least expensive goods and services in the market to gain a higher market
share effectively (D. Banker, Mashruwala and Tripathy 2014). With the complex business
environment and changing behaviours of consumers, there are multiple choices that will be
needed to be made available to them for offering the similar level of product quality at a
much reasonable price. The consumers within the market are concerned about higher
purchasing power and so buying products at a lower price can be a healthy option for them,
which makes it convenient for the businesses like Mormor Magda to provide the average
clients with good quality products at prices that can satisfy them (Lechner and Gudmundsson
2014). When the ice cream company opened, the costs were fundamentally lower relative to
the competitors, which further led to offering products at lower prices to its clients. There
were significant investments made by shareholders, which also helped the company to
manage its talent pool properly, furthermore stay afloat for long time. To implement the cost
leadership strategy, the company made sure to evaluate the market conditions and understood
that the profitability depends on the lowering down of costs without compromising anyhow
on the production, yield and quality of services (Ray Gehani 2013).
To enter the market, Mormor Magda made sure to focus on the allocation of resources
and expand the narrow market by understanding how the market segments’ needs could be
satisfied. The narrower market segments consisted of the clients who were more concerned

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about health and wellbeing and thus they preferred the ice cream products that consisted of
natural and organic ingredients. The targeted clients were thus the health conscious clients at
first and thus to increase the revenue generation, the company focused on expanding the
narrower market segments. The company made sure to bring new and innovative flavours of
the ice cream items, which draw the attention of young individuals and others as well who
preferred healthy ice cream and unique flavours too. This could be hugely beneficial for the
business to draw in more clients and expand the customer base, furthermore generate higher
revenue in business along with competitive advantage too. The focus strategy was considered
as a generic marketing strategy that allowed the company to strengthen the brand image and
establish trust and loyalty among the clients. The niche market was assessed by the company,
which helped in understanding the market dynamics and fulfilled the needs of clients through
the development of low cost products though without compromising on the quality of
ingredients used for the production of good quality ice creams (Piekkari, Welch and Welch
2014). The focus strategy also allowed the company to make addition of something unique
and extra for serving the niche market and ensure reducing the costs furthermore to manage
proper differentiation and ensure customer satisfaction as a whole. The focused cost
leadership enabled targeting the narrow market segment but with a lower price offered for the
products and services to compete within the target market while the focused differentiation
strategy could allow the company to focus on the sales channels and even find out different
ways to sell the products through various channels and enhance the brand exposure to
generate more clients.
The differentiation strategy has also been adopted by the ice cream company to ensure
that the products and services are differentiable from the other products made available by the
competitors within the industry. The differentiation strategy was successful with the company
focusing on the clients’ needs and made sure to present high quality products. The company

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focused on the concept of farmhouse ice cream to manage production of ice cream from the
excessive milk that was produced (Eriksson et al. 2015). This not only helped the framers to
gain better scopes to expand their product range, but also became supplier who used to supply
good quality resources for ensuring successful production of ice cream by Mormor Magda.
Market research and development further facilitated the scopes for adding unique features to
products that can be easily differentiable from the competitors’ products. As stated by
Marchi, Maria and Micelli (2013), the ingredients were natural and additive free, which also
made the ice cream taste better and better value for money for the customers due to its lower
amount of air present in it. The marketing activities were managed wisely by the company
through involvement of social media to attract more clients and made them aware of the
natural ingredients used in the product and its refreshing quality that should be healthy for
consumption (Marchi, Maria and Micelli 2013). To become socially responsible, Mormor
Magda also appointed young individuals for improving their skills in the concerned field by
partnering with a Swedish employment agency. This also introduced rainbow ice cream,
which made people aware of the natural and locally produced ingredients used in the product
and thus the company’s socially responsible approaches fell under the corporate social
responsibility umbrella, furthermore improving the brand image, reputation and business
efficiency (Love and Roper 2015).
While the cost leadership strategy was mainly focused at lowering down the costs of
operations without compromising on the quality of products and actual yield, it was
considered as sometimes incapable of enhancing the brand name and identity. On the other
hand, the differentiation strategy could be beneficial for adding some innovative and unique
features to the products, furthermore manage addition of value and benefits that could attract
the clients and result in a large customer base. The focus strategy, i.e., both the focus cost
leadership and focus differentiation could allow Mormor Magda to ensure that both these

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strategies are combined together to target both narrow markets and wider market segments
and at the same time, create a positive mind set among clients by offering products at
reasonable prices without making any compromise on its quality. Thus, the focus strategy
could be the most beneficial for implementation by the company to sustain in the competitive
marketplace.
Three major strategies adopted for expanding the business in Australia
The expansion of business in Australia is considered as a major aspect of
organisational growth and development in the upcoming days. One of the most effective
ways that was adopted by Mormor Magda included the crowd funding approach that helped
in not only managing growth, but also assisted in providing the shareholders or investors with
enough scopes and opportunities to invest money with the expectation to gain higher rate of
return on for shares in the organisation. Based on Søderberg, Krishna and Bjørn (2013), the
distribution strategy was another effective way to reach different parts in Australia with better
exposure of the products and services to its clients for influencing their buying behaviours.
There are multiple international expansion strategies that can benefit Mormor Magda to
sustain in the competitive marketplace and increase the customer base for generating higher
revenue in business and gain competitive advantage too with much convenience within the
ice cream industry in Australia (Søderberg, Krishna and Bjørn 2013). The company could
choose the channel distribution strategy to increase its channels from where the products
would be distributed along with enhancing the options include wholesalers, retailers,
distributor’s, independent sales reps, online direct mail and direct responses too.
The partnership strategy could also be beneficial where the company should need to
protect itself from the competition by partnership working with the other companies whose
main focus has been on identifying the warning signs and understanding the potential risks
associated with the global business expansion. The Mormor Magda needs to rely on the

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partners and understand the target audiences to check whether they will be satisfied with the
kind of products and services delivered by the company or not. Strategic partnership or
international joint venture could also help in leveraging the local brand equity and introduce
new goods and services that can be appealing to the clients of Australia (Killing 2013). This
is how the company could add value to the partnership and at the same time, provide
effective rights of distribution for the products and services in different market segments,
furthermore manage better strategies managerial control between the two companies. This
should also ensure better degree of operational control and leverage the local experience of
the manager of the company with whom Mormor Magda would be working in joint
partnership (Piekkari, Welch and Welch 2014).
The exporting or licensing strategy could be another effective strategy that could act
as a great initiative for global business expansion. The exporting strategy would also allow
the business to introduce the company products in the foreign market with extensive
distribution channels and gain global brand exposure too. It might be a challenging situation
for the ice cream company to sustain in Australia, but with proper introduction of the healthy
ingredients that have been used for the production of ice creams and exporting activities, the
global business expansion approaches would be successful and noteworthy all throughout
(Søderberg, Krishna and Bjørn 2013). This would increase the scopes for revenue generation
and ensure that the company could gain competitive advantage much more efficiently.

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References
D. Banker, R., Mashruwala, R. and Tripathy, A., 2014. Does a differentiation strategy lead to
more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), pp.872-896.
Eriksson, K., Johanson, J., Majkgård, A. and Sharma, D.D., 2015. Experiential knowledge
and cost in the internationalization process. In Knowledge, Networks and Power (pp. 41-63).
Palgrave Macmillan, London.
Lechner, C. and Gudmundsson, S.V., 2014. Entrepreneurial orientation, firm strategy and
small firm performance. International Small Business Journal, 32(1), pp.36-60.
Love, J.H. and Roper, S., 2015. SME innovation, exporting and growth: A review of existing
evidence. International small business journal, 33(1), pp.28-48.
Marchi, V.D., Maria, E.D. and Micelli, S., 2013. Environmental strategies, upgrading and
competitive advantage in global value chains. Business strategy and the environment, 22(1),
pp.62-72.
Piekkari, R., Welch, D. and Welch, L.S., 2014. Language in international business: The
multilingual reality of global business expansion. Edward Elgar Publishing.
Piekkari, R., Welch, D. and Welch, L.S., 2014. Language in international business: The
multilingual reality of global business expansion. Edward Elgar Publishing.
Ray Gehani, R., 2013. Innovative strategic leader transforming from a low-cost strategy to
product differentiation strategy. Journal of technology management & innovation, 8(2),
pp.144-155.
Søderberg, A.M., Krishna, S. and Bjørn, P., 2013. Global software development:
commitment, trust and cultural sensitivity in strategic partnerships. Journal of International
Management, 19(4), pp.347-361.

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