Ice-Fili, Russian ice cream company

In the early 1990s the ice cream perseverance was assert regulated. It had artificial commercialize, where all intersection was sold despite broad overproduction in the industry. During transition from state governed to market economy, the industry shrank rapidly and was unattractive mainly because of political and financial turmoil. erst Russian economy reemerged from the crisis, in the late 2001, the industry stabilized. persistence forces started to play major part in its attractiveness and macro instruction factors did not overshadowed them anymore.

From 2002 and on, the industry became attractive and firms were able to provide to a higher place average rate of returns.

For any given raw material, firms had an pickax to choose from 3-4 suppliers. They had plenty of new offers from potential suppliers. However, suppliers could dictate seasonal worker price fluctuations of some materials. Additionally, the new domestic suppliers of production equipment were emerging. It resulted in lower power of foreign equipment suppliers.

Even though barriers to entry were hush high (e.g. capital investment was high (1-1.5 million per production line); access to distribution channel was limited), high margins attracted new entrants. The market almost tripled from 1996 to 2002.

The substitutes (e.g. beers, sodas, candies) stole significant market share from the industry, because these firms had ample advertisement budgets. They were able to change consumers buying habits.

Consumers did not scram any switching costs, but it did not translated into higher dicker power.

The competition in the industry was growing, but there was lull lot of growth opportunities. In comparison with foreign countries, the usance of ice cream was very low and very seasonal. The firms should displace products by focusing on family and restaurant business consumption. This impart expand the overall industry market and reduce seasonality effects. At the same time it will lower storage costs, eloquent production and distribution.

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