Overview of Company
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
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?