INDUSTRY ANALYSIS REPORT WITH REFERENCE TO ICE CREAM INDUSTRY

Submitted by:
E. Pramod Kumar
(08571E0004)
Submitted to:
SREE VISVESVARAYA
INSTITUTE OF TECHNOLOGY & SCIENCE
(Affiliated to JNTU & approved by AICTE, New Delhi)
SVITS School of Management
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Content
SNo 1 2 3 4 5 6 7 8 9 Title Industry Analysis Overview Ice Cream Industry Profil
e Ice Cream Industry Growth Top Ice Cream Companies list 11 12-15 16 Page No 3-7
8 10
Short Profile of Ice Cream Companies SWOT Analysis of Ice Cream Industry Market
Share of Ice Cream Industry 17 Conclusion Reference 19
18
Industry Analysis Overview:
The main objective of industrial analysis is to assess the prospects of various
industrial groupings. At any stage in the economy there are some industries whic
h are
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growing while others are declining, the performance of companies will depend amo
ng other things upon the state of the industry as a whole and the economy. If th
e industry prosperous, the companies within the company may also be prosperous a
lthough a few may be in bad shape. The share price of the company is empirically
found to depend up to 50% on the performance of the industry and economy. To an
alysis the industrial performance one should follow three steps. Industry life c
ycle analysis Study of the structure& characteristics of an industry SWOT analys
is
1. Industry life cycle analysis:(Product life cycle theory)
Many industrial economists believe that the development of almost every industry
may be analyzed in terms of life cycle with four well defined stages.
Pioneering stage :( Introduction stage)
The stage is characterized by introducing of a new product and uptrend in busine
ss cycle which encourages new product introductions. Demand keeps on growing at
an increasing rate competition is generated by the entry of new firms to grab th
e market opportunities weaker firms face premature death while stronger over sur
vive to grow and survive. This stage is mainly suitable for a speculator.
Rapid growth stage: (Expansion stage)
Firms which enter in pioneering stage will concentrate on expansion of their sal
es & profits in this stage. It is suggest to the investor respond quickly & inve
st more in this stage. The market continues to grow but slowly offering steady a
nd slow growth to sales of industry. It is a phase of consolidation wherein comp
anies establish durable policies relating to dividends and investments.
Maturity stage:
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This stage show sign of slow progress and also prospects of decay. After enjoyin
g an above average rate of growth during the rapid growth, the industry enters t
he maturity stage. In this stage the growth of the industry is more or less deve
loped, it is growth rate is comparable to that of the economy of a country it is
suggested to hold the investment in this period.
Declining stage:
The stage is existed due to the changes in the consumer performance competition
from new product etc,. In this stage the industry may grow slightly during prosp
erous periods, stagnate during normal periods and during recessionary periods.
2. Study of the structure and characteristics of an industry:
Since each industry is unique; a systematic study of its specific features and c
haracteristics must be an internal part of the investments decision process. Ind
ustry analysis should focus on the following:
Structure of industry & nature of competition:
(a) The no. of firms in industry & market share of top few firms in the industry
. (b) Licensing policy of the government. (c) Entry barriers, if any (d) Pricing
policy of the firm. (e) Degree of homogeneity or differentiation among products
. (f) Competition from foreign firms. (g) Comparison of the products of the indu
stry with substitutes in terms of quality, price, appeal& functional performance
.
Nature & prospects of demand:
(a) Major customers and their requirements. (b) Key determinants of demand. (c)
Degree of cyclicality in demand. (d) Expected rate of growth in the foreseeable
future.
Cost, efficiency, and profitability:
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(a) Proportions of the key cost elements namely raw material, labor, utilities,
and fuel. (b) Productivity of labor. (c) Turnover of inventory, receivables, and
fixed assets. (d) Control over prices of outputs & inputs. (e) Behavior of pric
es of inputs & outputs in response to inflationary pressures. (f) Gross profit,
operating profit, and net profit margins. (g) Return on assets, earning power, a
nd return on equity.
Technology & research:
(a) Degree of technological stability. (b) Important technological changes on th
e horizon & their implications. (c) Research & Development outlays as a percenta
ge of industry sales. (d) Proportion of sales growth attributable to new product
s.
3. SWOT analysis:
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SWOT Analysis is a strategic planning method used to evaluate the Strengths, Wea
knesses, Opportunities, and Threats involved in a project or in a business ventu
re. It involves specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable and unfavorable
to achieving that objective. The technique is credited to Albert Humphrey, who
led a convention at Stanford University in the 1960s and 1970s using data from F
ortune 500 companies. A SWOT analysis must first start with defining a desired e
nd state or objective. A SWOT analysis may be incorporated into the strategic pl
anning model. An example of a strategic planning technique that incorporates an
objective-driven SWOT analysis is Strategic Creative Analysis (SCAN). Strategic
Planning, including SWOT and SCAN analysis, has been the subject of much researc
h. Strengths: attributes of the person or company that, are helpful to Weaknesse
s: attributes of the person or company that, are Opportunities: external conditi
ons that, are helpful to achieving Threats: external conditions which could do d
amage to the
achieving the objective. harmful to achieving the objective. the objective. obje
ctive. Identification of SWOTs is essential because subsequent steps in the proc
ess of planning for achievement of the selected objective may be derived from th
e SWOTs. First, the decision makers have to determine whether the objective is a
ttainable, given the SWOTs. If the objective is NOT attainable a different objec
tive must be selected and the process repeated. The SWOT analysis is often used
in academia to highlight and identify strengths, weaknesses, opportunities and t
hreats. It is particularly helpful in identifying areas for development.
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Evidence on the Use of SWOT
SWOT analysis may limit the strategies considered in the evaluation. "In additio
n, people who use SWOT might conclude that they have done an adequate job of pla
nning and ignore such sensible things as defining the firm's objectives or calcu
lating ROI for alternate strategies." Findings from Menon et al. (1999) and Hill
and Westbrook (1997) have shown that SWOT may harm performance. As an alternati
ve to SWOT, J. Scott Armstrong describes a 5-step approach alternative that lead
s to better corporate performance.
Use of SWOT Analysis:
The usefulness of SWOT analysis is not limited to profit-seeking organizations.
SWOT analysis may be used in any decision-making situation when a desired end-st
ate (objective) has been defined. Examples include: non-profit organizations, go
vernmental units, and individuals. SWOT analysis may also be used in pre-crisis
planning and preventive crisis management. SWOT analysis may also be used in cre
ating a recommendation during a viability study. SWOT-landscape also indicates w
hich underlying strength/weakness factors that have had or likely will have high
est influence in the context of value in use (for ex. capital value fluctuations
). Using SWOT to analyze the market position of a small management consultancy w
ith specialism in HRM. Strengths Reputation in marketplace Weaknesses Shortage o
f consultants at operating level rather than partner Expertise at partner level
in HRM consultancy level Unable to deal with multi-disciplinary assignments beca
use of size or lack of ability Opportunities Well established position with a we
ll defined market niche. Identified market for consultancy in areas other than H
RM Other small consultancies looking to invade the marketplace Threats Large con
sultancies operating at a minor level
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Ice Cream Industry Profile:
The ice cream industry in India is in many ways, reflective of the overall popul
ation distribution. The country’s population is primarily rural with approximately
65% of the population living in villages with a population of less than 5,000;
this means there are well over 150,000 villages with a combined population in ex
cess of 650 million. This has contributed to a highly fragmented industry that b
y many estimates has over 70,000 ice cream entities. Many of these are single fa
mily operations where the product is made either in the home or in very small fa
ctories and sold on the streets. The 350 million remaining people are concentrat
ed in the cities where the industry is reasonably concentrated in the hands of a
few international and domestic firms. It is estimated that only 30% of the enti
re market is “organized” and the industry meets the classic definition of a fragment
ed industry, that is, one where there is an absence of market leaders with the p
ower to shape industry events. Ice cream or ice-cream is a frozen dessert usuall
y made from dairy products, such as milk and cream, and often combined with frui
ts or other ingredients and flavours. Most varieties contain sugar, although som
e are made with other sweeteners. In some cases, artificial flavourings and colo
rings are used in addition to (or in replacement of) the natural ingredients. Th
is mixture is stirred slowly while cooling to prevent large ice crystals from fo
rming; the result is a smoothly textured ice cream. The meaning of the term ice
cream varies from one country to another. Terms like frozen custard, frozen yogu
rt, sorbet, gelato and others are used to distinguish different varieties and st
yles. In some countries, like the USA, the term ice cream applies only to a spec
ific variety, and their governments regulate the commercial use of all these ter
ms based on quantities of ingredients.[2] In others, like Italy and Argentina, o
ne word is used for all the variants. Alternatives made from soy milk, rice milk
, and goat milk are
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available for those who are lactose intolerant or have an allergy to dairy prote
in, or in the case of soy milk for those who want to avoid animal products. Anci
ent civilizations have served ice for cold foods for thousands of years. The BBC
reports that a frozen mixture of milk and rice was invented in China around 200
BC, and in 618-97 AD, King Tang of Shang had 94 men who made a frozen dish of b
uffalo milk, flour, and camphor. The Roman Emperor Nero (37–68) had ice brought fr
om the mountains and combined with fruit toppings. These were some early chilled
delicacies.In 400 BC, Persians invented a special chilled pudding-like dish, ma
de of rose water and vermicelli which was served to royalty during summers. The
ice was mixed with saffron, fruits, and various other flavours. The treat, widel
y made in Iran today, is called "faloodeh", and is made from starch (usually whe
at), spun in a sieve-like machine which produces threads or drops of the batter,
which are boiled in water. The mix is then frozen, and mixed with rose water an
d lemons, before serving.
Industry Competition:
As the industry evaluation would indicate the competition is significant. The 70
,000 some participants is a large number but the more serious challenge comes fr
om the top six national firms; Amul, Kwality Walls, Mother Dairy, Vadilal, Dinsh
aw, and Arun. These top six firms dominate the market and essentially control th
e organized market. Detail statistics are not available to indicate market share
but Ben & Jerry s estimates that these six firms control 40% to 50% of the urba
n market.
Historically MNC’s have not achieved much success in penetrating the Indian market
. There are a number of possible explanations for this; the relative embryonic a
nd disorganized nature of the market, excessive government regulation that inclu
ded excessive tariffs and the restriction that imported ice cream could only be
sold in hotels, and a highly fragmented and ineffective media. Most of these mar
ket inefficiencies have been or are in the process of being corrected and Ben &
Jerry s believes that conditions have ripened to the extent where MNC’s can now ef
fectively enter the market and compete with the domestic firms.
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Industry Growth:
The three factors of growth, population, per capital consumption, and price are
all projected to increase over the next six years. Population is projected to gr
ow at 1.8%, per capital consumption is projected to grow at 5%, and prices are p
rojected to increase at just over 1% per
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year. (Overall the long-term projection for consumer prices is expected to rise
at 3.5%, however, given the intense level of competition Ben & Jerry s does not
think it likely that ice cream prices will rise that fast.) Overall the market w
ill grow from $245 million to $360 million, a compound growth rate of 8%. Of the
$115 million in growth, 60% will come from increased per capita consumption, 24
% from increased population, and 16% from increase in price.
Top Ice Cream Industries List:
Vadilal Ice Cream India Amul Ice Cream Kwality Walls Mother Diary
Ben & Jerry
MTR
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Short Profile of Ice Cream Companies: Vadilal Ice Cream Ltd:
Vadilal ice cream division has always been a hot favorite with the people both i
nside and outside the organization. In India, the name Vadilal is synonymous wit
h Ice Cream. The Ice Cream industry in India today has a turnover of Rs. 15 bill
ion [US$ 330 million]. A quarter of this comes from the house of Vadilal alone.
But that’s no surprise, considering that we have the largest range of Ice Creams i
n the country – 120 – plus flavors, in a variety of more than 250 packs and forms. T
he range includes cones, candies, bars, ice-lollies, small cups, big cups, famil
y packs, and economy packs. Something for all tastes, preferences and budgets. T
o make it convenient for our consumers to relish our complete range under one ro
of, we have set up a chain of Happiness Parlors – ‘Ice Cream boutiques’ so to say. Hor
des of people flock to these parlors daily because they know that our products c
ontain the purest and creamiest milk, and the freshest and tastiest fruits and n
uts. Among our products are OneUp Chocobar and King Cone – all-time favorites whic
h have today attained the generic status. Another hit is our Kulfi – traditional I
ndian milk sweet. Some of our products are a combination with confectioneries. S
ince our products are highly perishable, quick transport and proper storage are
of paramount importance. Hence our refrigeration equipment and deep freezes are
imported from companies, which are world leaders in their respective fields. To
ensure
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sufficient, timely and constant ice cream supply, we have a Cold Chain Network c
omprising three manufacturing plants [totaling a production capacity of 1.25 lak
h litre per day], about 23 C&FA, more than 500 Distributors and over 40,000 Reta
ilers.
Amul India Ltd:
AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Am
oolya," was suggested by a quality control expert in Anand. Variants, all meanin
g "priceless", are found in several Indian languages. Amul products have been in
use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee,
Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramu
l, Amul Milk and Amulya have made Amul a leading food brand in India. (Turnover:
Rs. 67.11 billion in 2008-09). Today Amul is a symbol of many things. Of high-q
uality products sold at reasonable prices. Of the genesis of a vast co-operative
network. Of the triumph of indigenous technology. Of the marketing savvy of a f
armers organisation. And of a proven model for dairy development.
Kwality Walls Ltd:
Kwality Ice Cream is the pioneer in the Indian ice-cream manufacturing industry
and in 1956 became the first company in the country to use imported technology f
or manufacturing ice-cream on a commercial scale. As the ice-cream industry expl
oded in India, in 1995 Kwality Group joined hands with Hindustan Lever Limited a
nd then there was no looking back. The Indian consumer market was introduced to “K
WALITY WALLS” – the result of a collaboration between global brand Walls and the lea
ding Indian ice-cream brand Kwality. Though the two giants eventually parted way
s, the collaboration made Kwality a
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household name and created deep in roads for the brand in the consumer market. T
oday, Kwality is not just a brand – it is the ice-cream associated with the Indian
summer; it’s the first choice in ice-cream for any child or adult during the scor
ching Indian summers. Kwality ice-creams are trusted not only for their rich, cr
eamy flavours, but also for their trusted quality and nutritious food value.
Mother Diary Ltd:
Mother Dairy Fruit and Vegetable Pvt. Ltd. offers the following products: Mother
Dairy markets dairy products like Liquid Milk, Ice Creams, Flavoured Milk, Dahi
, Lassi, Mishti Doi, Ghee, White Butter, Table Butter, Cheese, UHT Milk, Dhara r
ange of edible oils and the Safal range of fresh Fruits & Vegetables, Frozen Veg
etables and Fruit Juices at a national level, through its sales and distribution
networks, for marketing food items. Mother Dairy milk (Bulk Vended Milk) is for
tified with vitamin A @2000 IU per litre of milk as a part of social accountabil
ity. This program was started with the Mother Dairy, Delhi, since February 1980a
nd there after Mother Dairy is continuing this program on their own as a social
responsibility without having any financial assistance from the Government as we
ll as since it is felt that BVM is generally consumed by the middle / lower midd
le / poor strata of the society. It is also found that the dietary practices ado
pted by these classes are deficient in Vitamin A. Mother Dairy sources significa
nt part of its requirement of liquid milk from dairy cooperatives. Mother Dairy
sources fruits and vegetables from farmers / growers associations. Mother Dairy
also contributes to the cause of oilseeds grower cooperatives that manufacture/
pack the Dhara range of edible oils by undertaking to nationally market all Dhar
a products.The company markets an array of fresh and frozen fruit and vegetable
products under the brand name SAFAL through a chain of 400+ own Fruit and Vegeta
ble shops and more than 20,000 retail outlets in various parts of the country. F
resh produce from the producers is handled at the Company’s modern distribution
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facility in Delhi with an annual capacity of 200,000 MT. An IQF facility with ca
pacity of around 75 MT per day is also operational in Delhi. A state-of-the-art
fruit processing plant of fruit handling capacity of 120 MT per day, a 100 perce
nt EOU, setup in 1996 at Mumbai supplies quality products in the international m
arket. With increasing demand another state-of-the-art fruit processing plant ha
s been set up at Bangalore with fruit handling capacity of around 250 MT per day
.
Ben & Jerry Ltd:
Since 2003, Ben & Jerry s have been working on a sustainable Caring Dairy initia
tive, which helps level out needs of the farmers and their cows, as well as the
planet s needs. The company has, so far, reduced energy use on their 11 farms by
2%, and converted all their farms to green energy. Also, in 2002, Ben & Jerry s
in the USA committed to reducing carbon dioxide emissions by 10% by 2007, and b
y investing in a variety of efficiency measures, this target was achieved with e
ase - the USA now produce 32% less carbon dioxide emissions (per pint of ice cre
am) today (in 2008) than in 2002. This initiative was brought to the exclusive p
rovider of milk for Ben & Jerry s European ice cream production, Beemster Cheese
, in 2007. In addition to helping farmers and their cows, in 2001 Ben & Jerry s
began sourcing vanilla, cocoa, and coffee, for their smooth ice creams, from coo
peratively run farmer associations - these community structures help promote the
ir members quality of life, improve worker s benefits, and sustain a commitment
to their land and communities. In 2006, the world s first ever vanilla ice crea
m made with Fairtrade ingredients was launched by Ben & Jerry s. 2007 saw the re
lease of Vanilla Toffee Crunch, using 100% Fairtrade certified cocoa, sugar, and
vanilla, and in 2008, Chunky Monkey was guaranteed to be traded in accordance w
ith international Fairtrade standards as well.
MTR Pvt Ltd:
MTR Foods Private Limited is amongst the top five processed food manufacturers i
n India. We manufacture, market and export a wide range of packaged foods to glo
bal markets that include USA, UK, Australia, New Zealand, Malaysia, Singapore, U
AE, Japan and Oman. Starting with the legendary MTR restaurant in Bangalore, Ind
ia’s silicon valley, we now offer complete meal solutions . Our wide range of pr
oducts include ready-to-eat
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curries and rice, ready-to-cook gravies, frozen foods, ice cream, instant snack
and dessert mixes, spices and a variety of accompaniments like pickles and papad
s. Our deep understanding of culinary expectations and needs has resulted in man
y new and innovative products. Our investments in infrastructure and technology
ensure that we can scale rapidly and bring these to market. Today, consumers acr
oss the globe count on us to bring them all-natural, wholesome and delicious foo
d that is also convenient and no-fuss.
SWOT Analysis of Ice Cream Industry: Strengths:
1) They are available in reasonable prices. 2) Known for product quality. 3) Str
ong presence of parent company in India. 4) The Brands almost generic to their p
roduct category 5) Wide variety of unique ice cream flavors.
Weakness:
1) The durability of ice-creams is not really good 2) it melts very soon 3) The
industry has a complex supply chain management and the main issue is traceabilit
y 4) Domestic business as well as many international markets are thriving
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Opportunities:
1) They can come up with new flavors 2) They should focus more on their advertis
ing and marketing strategies 3) They should come up with offers for purchase of
ice-cream in whole market 4) Efforts to exploit export potential are already on
Threats:
1) Currently, the threat of new viable competitors 2) Foreign players entering t
he market 3) Consumer buying power also represents a key threat in the industry
4) Consumers can easily switch to other substitutes with little cost or conseque
nce
Market Share of Ice Cream Industry:
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Conclusion:
Following are the concluding points taken into consideration after the conduct o
f the Industry Analysis:
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Advertisement acts as a very important role here. So if heavy advertisements are
carried out it will definitely increase purchase.

Due to the changing in climate, life style and preferences, it was not necessary
that they will consume same product every time.

The Ice Cream Industry had to further focus on: Strengthen communications
Multi v/s sole dealer Training to dealers
Reference:
Books:
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1) Prasanna Chandra Edition : Investment analysis & portfolio management, 2nd Ta
ta Mc Grill Hill, New Delhi.
Journal:
The Brand Reporter
Web Sites:
1) www.moneycontrol.com 2) www.reportbuyer.com 3) www.indiatodaygroup.com 4) www
.moneycontrol.com 5) www.indiainbusiness.nic.in 6) www.google.co.in
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