Ben & Jerry's Case Study
~ Case Analysis ~
I. PROBLEM STATEMENT
Ben and Jerry’s, founded in 1978, is a market leading distributor of super-premium ice creams, frozen yogurts, and sorbets, and has built a reputation on being a socially minded company. They were pioneers in the policy of “caring capitalism” and place heavy importance on the concept of social responsibility, a practice which many companies have since adopted. They have enjoyed long-term success as a result of their progressive methods of doing business and novel ideology regarding how a company should be ran. However, due to increased competitive pressure and declining financial performance, they have now been confronted by the threat of a takeover. Recently four …show more content…
The only catch is that they would install a new management team, and as private investment fund they may not choose the best team. But at a fair offer price of $32 cash, this is the best deal for B & J, as they don’t have to sacrifice a great deal.
4. Merge with Chartwell at an offer of minority interest for a cash infusion of $30-50 million
The downside of this offer far outweighs the upside. A cash infusion of $30-50 million just isn’t enough to cure B & J’s ills and isn’t worth giving up majority representation on the board of directors for. Although they’d allow B & J to remain an independent company, it would require new management which wouldn’t solve anything as B & J’s financials would not get any better. This is the worst of the four offers and B & J would be better off staying independent.
5. Stay independent
The primary benefit of staying independent is the continued pursuit of their corporate vision without outside interference. However, due to increased competitive pressure and declining financial performance as a result of sacrificing short-term profits for social gains, a takeover would be in their best interest. Because the company is continually providing the shareholders with subpar returns, it would be mutually beneficial to everyone, not to mention the socially responsible thing to do, to allow a takeover to occur.