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Ben And Jerry's Case Study

2104 words - 9 pages

Case Write-up # 2: Ben & Jerry’s
Founded in a gas station in Burlington, Vermont by Ben Cohen and Jerry Greenfield, Ben and Jerry’s grew from a simple idea to the market leader in super-premium ice cream in 2000. After low-budget analysis, Greenfield and Cohen decided that the best place for a homemade ice cream shop was a college campus. The problem was all the colleges in warm areas had homemade ice cream shops already, so Cohen and Greenfield made the bold decision to start their shop in Vermont. Fast-forward to 2000 and Greenfield and Cohen have proven many people wrong. Ben and Jerry’s now owns 170 stores across the United States and overseas and with strong supermarket sales, ...view middle of the document...

This ensured that Ben and Jerry’s would conduct business with a wholesome product and social causes in mind. During the company’s first public offering, they offered stock only to residents of Vermont, to reward them for their support of the company before anyone else did. The company even traded short-term profits for social gains by treating their suppliers and other stakeholders with respect and humility. When looking at Ben and Jerry’s actions and results, there is no doubt that the company truly believes in creating an environment that benefits all stakeholders involved. Due to the importance of the values of Ben and Jerry’s to Cohen and Greenfield, there had to be restrictions placed on certain policies to maintain them. Overall, these restrictions gave greater power to the board and decreased the power of the shareholders. Another stakeholder in the Ben and Jerry’s business was the Vermont Legislature. Vermont’s policies of considering all the stakeholders and allowing the board to consider the economy of the state, all played into the company’s plans to remain an independent and socially conscious corporation.
In 2000, Ben and Jerry’s board of directors had multiple takeover offers to consider. The offers were made due to declining financial performance. The first was from Dreyer’s Grand Ice Cream, a company who sold ice cream and other frozen desserts under their name and Edy’s brands. Dreyer’s offered a price of $31 per share paid by stock and proposed that Ben and Jerry’s could maintain their management team and operate as a quasi-autonomous business unit, as well as encourage some social endeavors. Unilever the largest producer of ice cream in the world, manufactured ice creams brands such as Good Humor, Breyers, Klondike, and Popsicle. Their offer price was $36 per share in cash. In addition to the cash offer, Unilever would maintain select management from Ben and Jerry’s and integrate Ben and Jerry’s ice cream into its frozen desserts division; however, it would restrict social commitments and interests. The third company to offer was Meadowbrook Lane, a private investment fund located in Northampton, Massachusetts. Meadowbrook Lane offered $32 per share in cash to Ben and Jerry’s. They would allow Ben and Jerry’s to operate as an independent company and continue select social projects, but a new management team would be installed. Chartwell, a New York City private-equity firm was the final offer for Ben and Jerry’s. They proposed investing between $30-50 million to have a majority on the board of directors. From there Chartwell would install a new management team but allow Ben and Jerry’s to continue as an independent company. All four offers have their strengths and weaknesses and a company like Ben and Jerry’s will make sure that the right offer benefits all stakeholders involved. We will examine which offer fits best for Ben and Jerry’s and advise the company on which offer to choose in the next few...

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