Ice-Fili and the Russian Ice-Cream Market
The Russian Ice Cream market is worth $ 500 million, with Ice Fili as the market leader. The industry concentration, determined by the market share of the four largest firms in a sector is low for Russian ice-cream industry. It indicates that the industry is highly fragmented and competitive. The industry has experienced a low growth rate of ~ 3.5 % for the last two years and the other factors influencing the overall market size, like the population and the per capita consumption of ice cream have been stagnant over the years. The external factors like the shrinking frozen-foods imports market coupled with low entry barriers caused increase in the number of new entrants into the ice-cream market.
Ice-Fili is a traditional Russian manufactured who has been the market leader in the Russian ice-cream industry but over the years the supremacy and competitive edge has been declining. Due to its traditional competency it has a lot of capacity, much of which is lying unutilized. Out of its capacity of 200 tons/day, it is utilizing only about 25% (with an annual production 16000 tons, assuming 300 working days).
Ice-Fili has also followed the strategy of sourcing most of its supplies from domestic market and hence in the short run it is relatively immune to imports and hence any negative international events. Over past few years, Ice-Fili has invested significantly in upgrading the machinery such that about 75% of the current machinery is of new generation. This is one of the strengths of Ice-Fili operations and can be leveraged.
The company is also leading the way in innovativeness and has already received recognition for introducing innovative products. This is one of the strengths of the company since innovative product ...