London Business School – Case Book
BC
ce erg P FT
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Case at a glance (for the interviewer only)
Part Part B Part C
Structure hy othesis nter retation numeracy ecommendations summary
ening statement Present the candidate with the slide Ask the candidate:
Our client is Iceberg, a major titled: ice cream tub prices and What strategies could Iceberg use
global branded ice cream producer. tell them: to address the performance issue in
Iceberg develops, manufactures and The Associate on this case prepared urope and how would you prioritise
markets ice cream products and this slide. What is causing the them?
sells to retailers who, in turn, sell to performance issue in urope?
the end consumer. Ice cream is one (If the candidate is struggling, ask:
of the most profitable products that How should Iceberg segment the Tests strategic thinking, creativity
Iceberg makes. The business has market and what is happening in each and ability to prioritise and provide
grown at led by orth America segment? ) reasons
and developing markets. However,
Iceberg has recently seen poor
growth and competition intensifying Tests business intuition and What are your recommendations for
in the uropean ice cream market, in the ability to interpret data, Iceberg’s management?
particular from supermarkets’ own- draw conclusions and identify
brand ice cream. Iceberg management implications
are sure they have great products: Tests ability to synthesize and
they continue to win in consumer taste structure recommendations,
tests, there is a strong pipeline of How does the market opportunity business intuition and empathy
planned product launches, and they compare to Iceberg’s business
have strong brands in many markets. today?
Management believes this allows them (If the candidate is struggling,
to sell their products at a higher price ask: Which segment would you
than the competition. What could recommend Iceberg focus on and
be causing the performance issue in what is the margin and volume
urope? potential in that segment? )
Tests ability to structure a Tests numeracy, ability to make
problem and state and explain a reasonable assumptions, degree
clear hypothesis of confidence/insecurity and
personality in the face of challenge
to their work (ask Are you sure
you’re right? )
London Business School – Case Book
BC
ce erg
ey case insights an e cellent candidate might uncover (for the interviewer only; do not tell the candidate)
• There are market segments: • Iceberg is winning market share in • In any given segment
economy, mass market and a shrinking mass market recommended: Iceberg’s volume,
premium-priced products margin or profit potential; its
• Premium segment is likely growing, competitiveness to customers
• Iceberg competes primarily in the as brands distinguish themselves and consumers (realising they are
mass market segment (defined as from the mass market to retain and different); and its ability to win
price points . – . ), with a grow margins against branded and private label
market share by value ( m products
out of m), by volume • To compete, Iceberg should:
( m L out of m L) rive volume to improve plant
utilisation ( in Western This case is long and candidates
urope, vs. in orth would not necessarily be expected
If the candidate delineates America) and reduce unit to finish it
segments slightly differently, their costs, so that it is better able to
market size and share numbers compete on price in the mass
would differ accordingly market
Increase presence in premium
(relying on taste performance
• Mass-market consumers are and strength of brand)
becoming more price conscious Optimise drivers of consumer
(sales of . - . are strongest purchasing behaviour besides
in the mass market category) price (e.g. packaging /
advertising / shelf placement)
• In the mass market and economy Potentially expand in the upper
segments, Tesco is undercutting end of the economy market,
Iceberg and other competitors although its retailer purchase
on price, growing the economy price may be less competitive
segment and pushing down
Iceberg’s revenue in the mass
market
London Business School – Case Book
BC
ce erg
hi it ice cream tu rices (show to candidate)
Mar et rice architecture am le roducts
. - .
. - . Haagen azs
Ben errys
. - . Tesco inest
. - .
etail price segment /L
. - .
. - .
. - .
. - . Iceberg L anilla .
. - . Tesco L anilla .
. - .
. - .
. - . Tesco al. L anilla .
Market value of price segment at retail price ( m)
Iceberg ice cream tubs Other company ice cream tubs
Source: ielsen: Store research; BC analysis
hi it ce erg cost structure o 2L vanilla ice cream tu in
(show to candidate if this data is requested)
. .
.
.
.
Product cost /L
.
. .
.
.
.
.
.
.
Ingredients Packaging Production istribution Product Advertising Overhead Profit etailer
cost promos purchase
price
Source: Client data; BC analysis
London Business School – Case Book
BC
ce erg
hi it ce erg glo al ice cream roduction lant utilisation (show to candidate if this data is requested)
uro e N merica
Max Max
A B C HI L A B C H I
Western urope C
Production plant size Production plant size
Productive capacity nused capacity (based on hrs per year)
am le o a ossi le case structure (for review after the case interview)
What can ce erg do to im rove their com etitiveness in uro e
Product Pricing
Cost structure Com etition
com are with com are with
Other branded ice creams Other branded ice creams ixed costs istribution channels
Own label ice creams Own label ice creams ariable costs Shelf positioning
Substitutes Substitutes
Promotions
(other desserts) (other desserts)
London Business School – Case Book
BC
ce erg
Di erentiation etween oor average and su erior er ormance (for review after the case interview)
Poor Per ormance verage Per ormance Su erior Per ormance
Framing ro lem Suggests what Sets out a structure for Sets out a clear, logical
rioritising issues supermarkets are doing analysis; identifies price structure for analysis;
without clear rationale segments, and possibly recognises that market
or structure; does not that supermarkets have has three segments,
consider differences power because Iceberg is with Iceberg strongest in
across the range of reliant on them to sell its the mid-price segment;
supermarket products products identifies need to
understand Iceberg s
ability to compete
denti ying relevant Starts asking for a variety Asks a series of specific efines information
in ormation of information – no clear questions related to a needed, including
logic single logical line; identifies rationale; identifies key
some key points from points and explains their
the graphs; can process implications from the
answers and move on graphs presented
unning calculations Calculates incorrectly that Correctly calculates ealises lowering price
drawing conclusions rom Iceberg cannot compete at Iceberg can compete at may dilute margins and
acts supermarket price points lower price points except suggests ways to avoid;
Tesco alue and quantifies identifies production
margin utilisation issue and
proposes solution;
Calculates volume /
revenue / profit potential
denti ying ey im lications Limited or eeds to be asked Identifies the key case
and ne t ste s illogical additional for ideas on potential insights; drives to
demonstrates creativity recommendations solutions; has a few ideas solutions on their own;
on where to improve; for how to improve prioritises a list of alternate
formulaic approach opportunities; goes beyond
(e.g. spend more on the obvious throughout the
marketing) case process
