How do you evaluate what Farggi has done until early 1995? What results have they attained?

Question

What will be an ideal response?

Answer 1

In our answer to the first question, we used an approach emphasizing the marketing strategy of Häagen-Dazs and Farggi versus the marketing strategies of traditional ice cream companies. We have taken into consideration the definition of strategy as a unique and valuable position, involving a presumably high fit system of activities which is difficult to copy, because of the necessary trade-offs between them.
In other words, competitors cannot just copy a portion or some isolated elements of the system of activities; they have to copy it almost entirely if they want to benefit from the competitive advantages it generates.
Instructors may ask students, “Which specific decisions did Farggi executives take to build a competitive position in the premium ice cream segment in Spain?”
The first such decision was to launch “Pastimus” and “Cheesecake” frozen cakes, targeting the home consumption market, and sold in food retail stores. Was this decision right or wrong?
It may be said to have been right, as a strategic attempt to enter “another distribution channel with products for consumption at home,” because up to that point, Farggi was exclusively “. . . serving a single market: the restaurant and catering trade.”
It may be said to have been wrong, because it prompted a heavy investment in a new large cold storage chamber and in some 800 retail freezer cabinets.
At this point in the discussion, instructors may choose to organize students’ contributions under the usual four strategic headings: strengths, weaknesses, opportunities, and threats.
After this strategic analysis, instructors may move on to the consideration of how sustainable the competitive position of Farggi is. Some participants may emphatically declare that it is almost impossible for Farggi to become the leader in the premium ice cream market in Spain, because Häagen-Dazs is stronger, bigger, and more international. Their implicit assumption frequently seems to be that “therefore, they are doomed.”
Some other students will take the position that there is no real need for Farggi to attempt to capture the leadership position. In other words, they point out that Farggi may happily grow and be profitable while being a follower of Häagen-Dazs.
These two points of view may be made explicit by instructors asking students: “If you had the money and the opportunity, and at a fair price, (say, at par value), would you buy shares of Lacrem, S.A.–Farggi?”