AMBROSIA CASE
Post on 25-Jun-2015
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AMBROSIA CORPORATION – SAN AUGUST
SUMMARY
INTRODUCTION
I) AMBROSIA’S PRESENTATION
II) COMPETITIVE MARKET
III)SOLUTION
CONCLUSION
INTRODUCTION
• 1925: San August Corporation.
• Trade became easier. Consumer demand increased.
• Ambrosia: leader in the ice cream industry (77.3%)
• Ice cream market was expected to double.
• Arrival of new competitors.
I. PRESENTATION OF AMBROSIA
• Leadership in the Filipino ice cream market.
• High Price
TOTAL REVENUE : P2.830 BILLION
FDS55%
NCB 38%
FPS6% Others
1%
Total Revenue : P2.830 Billion
FDSNCB FPSOthers
PRESENTATION OF AMBROSIA
• The Frozen Dessserts and Snacks is the most important category.
• 3 main line offering products:
• Bulk ice cream
• Single-serves
• Soft-serve
ANSOFF ANALYSIS
PRODUCT DEVELOPMENT
ANSOFF ANALYSIS
• Best strategy: Product development.
• Develop new products catering to the same market: 1992: 5 new flavors, 16 new products, a fruit bar in 4 flavors.
• It permit us to:
• Maintain the company’s reputation as a product innovator
• Protect overall market share
• Counter competitive entry
• Use of excess production capacity
DISTRIBUTION
6 manufacturing plants
Current capacity expcted to double by 1993
35 sales offices
86% buy on impulse.
Carrito vendors
Split the distribution into :
60% retail store
30% outlets and others.
II. COMPETITIVE MARKET
4 MAJOR COMPETITORS:
SELECTA:
7.3% to 15% (1992)
Medium priced products
Increase its production capacity -> New equipments
PRESTO:
Low-pricing serve products
Strategy of product development
PUREFOOD:
Attraction of Ambrosia’s carrito vendors
Improve technology
Offered rebates
MARKET SHARES
Ambrosia77%
Presto10%
Selecta7%
Coney Isand2%
Sorbetero3%
AmbrosiaPrestoSelectaConey IsandSorbetero
S
77% share of market
Product line
Local Brand
Knowledge of market
Distribution
Technology
Domestic
Company
80% of capacity
Share in the expansion (100 over 7 years)
Relationship with foreign compagnies
International and domestic
rivals
Political and natural
disasters
W O T
III. SOLUTION
OUR OPINION
Why should the company make a strategic alliance ?
• Technology
- Fill the void created by the lack of technology
- New infrastructures
- Problem of new flavor research solved
- New products and packages
- Better, faster and broader production to increase profits
• International opportunities
- Firm located in a foreign country OR firm with agencies dispatched internationally
- New points of activity allowing the firm to have broader scope around the world
- Additional profits
- Nestlé and Häagen-Dazs; reinforced reputation
• The 20% capacity left aside finally used
- 20% of the Ambrosia Corporation is left out of the business, yet it could be fully used
- Maximization of benefits
• Strengthen power and flexibility
- International and domestic rivals
- Politic and natural disasters
Does it really need to make an alliance ?
HOW BEST TO MAINTAIN ITS COMPETITIVE DOMINANCE ?
• No Joint Venture
• No License
• A contract is better and more flexible
CONCLUSION
• Potential to grow and increase its power on the international scale
• Ought to give itself an aid from foreign companies
• The better type of alliance is a contract, where both parts can agree on the terms.
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