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Ben And Jerry Essay

663 words - 3 pages

Ben & Jerry’s Meltdown in MoscowExcerpt

profitable alliances with franchised names and licensing in a dozen European locations and severalLatin countries.-
plant in Russia, Karelia in l992-
pull out in early 1997 due to "impossibility of managing" its assets under current conditions-

one of the largest market for ice cream (350 tonns annually)

weak competition-
$20 million in grants from USAID-
Entry mode: joint venture called Iceverk guided by American management techniques
Error Analysis

Error analysis:
Three viewpoints:

The Russians perceive Ben & Jerry's management as running out on them ...view middle of the document...

BJ had to buy trucks and training staff at stores that sell their products-
Payoffs > without payoffs, materials often disappeared into the Russian black market.-
official problems such as high rents on shipments of equipment-
Factory equipment could be delayed for months-
Russian customs officials would charge unusually high storage fees while taking their time in releasingshipments to the importing companies-
To hire employees, the friends had to find friends with "connections"-
The local and regional host-government agencies controlled access to facilities, telephone lines,licenses and permits, and-
cargo invoicing systems-
untransparent control mechanisms

The central government's multitiered regulations governed standards for inspecting goods aswell as shipping, packaging, and storing products, and tax schemes provided neither claritynor controlled, predictable demands-
Repatriation of income and currency transactions passed through several different banks

Often no understanding who has authority for pavments, currency clearances, or foreign-exchange accounting-
Never able to completely resolve problems with ice-cream shipments
before reaching theirfinal destinations...

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