Dippin  Dots

Dippin Dots PowerPoint PPT Presentation

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Overview of Company

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Dippin Dots

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1. Dippin’ Dots Struggling To Maintain Their Novalty

2. Overview of Company & Product Established: 1988 Founder: Curt Jones (former biologist) Location: Paducah, KY Product: Flash frozen ice cream using liquid nitrogen Uniqueness: Product must be made and stored at between 10 and 20 below zero to maintain texture

3. Overview Cont. First Store: KY 1990 – instant legitimacy Expansion: Opryland park – same year Dealer Network: Loose association of dealers through the 1990’s Franchising: Officially started in 2000

4. Overview Cont. Patent: Received in 1990 and voided in 2007 Major Competition: Sued “Frosty Bites” in 2005 for patent infringement and lost Take Home Product: Main product is not able to be stored in conventional freezer. Dots ‘n Cream failed – only available in St. louis Franchise ranking has slipped in recent years

5. Overview Cont. Products: Sold in 4, 5, & 8 OZ cups Price: Average about $5 per serving Revenue: 2/3 comes from national accounts Advertisement: “Ice Cream of the Future”

6. Environmental Analysis General Environment Demographic Trends – Customer base is getting older Sociocultural – healthier eating may hurt Economic – How will economy influence sales Sales were down 11% in 2008 Company has been losing money since 2007

7. Environmental Analysis Cont.

8. Environmental Analysis Cont. Five forces New Entrants – Moderate Suppliers – Moderate to high Buyers – Moderate to high Substitutes – High Rivalry – High

9. Internal Analysis

10. Internal Analysis Cont. Value Chain Clear strengths in operations and logistics Marketing has the potential to be a lasting advantage Product is consistently the most popular item at summer attractions. Problems in general administration and technology development Have not ever been able to diversify

11. Internal Analysis Cont. Competitive Advantage: Patent has been thrown out so their product is still valuable and rare, but not difficult to imitate or substitute. Temporary competitive advantage Must develop other competitive advantages Patent a take home product Strengthen brand name through marketing and expansion Diversify into other products – Coffee Dots

12. Major Problem The company is losing money Recently lost their patent Companies (founded by previous franchise owners) have launched similar products Have spent over $10 million in legal fees in recent years. Sales were down 11% in 2008 60% of their business is generated in the summer Much of the business generated in vacation locations which will likely see less business this year. How do they stay in business?

13. Alternatives Do nothing Build brand through advertising, name recognition, and expansion Expand national accounts Develop take home product Diversify in other areas Combination franchising

14. Recommendation Diversify their product line Jones is currently working on several new products such as coffee Dots, dots ‘n Cream, Ice cream cakes, and a low calorie version called chillz that could be sold in schools Developing coffee dots would allow the company not to be so seasonal and so dependent on national account business. Dots’ n cream is a possibility

15. Questions Questions?

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