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Ben and Jerrys Homemade Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 2821 | 1471 Words (6 Pages) | Michael J. Schill | Darden School of Business : UVA-F-1364 |
A Word File
The BNJ case involves attempts by larger corporations to take over the socially responsible ice cream brand, which was deeply committed to social and environmental justice. External investors were pressuring the corporation to prioritize profits over its values. To deter hostile takeovers, BNJ deployed asset-control mechanisms such as creating a special class of shares and establishing a state statute requiring board approval for sales that could harm the community. These measures successfully prevented many takeover attempts, including one by Unilever, which ultimately acquired BNJ in a friendly acquisition. The acquisition raised questions about BNJ's commitment to its values and independence from its new parent corporation. Despite the acquisition, BNJ remained a socially responsible subsidiary of Unilever with its distinct brand identity, highlighting the tension between generating profits and staying true to social and environmental values in publicly traded corporations.
Following questions are answered in this case study solution:
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Ben & Jerry’s (BNJ) mission statement has three dimensions. Using the facts of the case, how well has the company fulfilled each of them? Why did BNJ become a takeover target?
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Who has the ultimate control of the assets of a publicly-traded company like BNJ at the time of the case?
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What was the impact of the asset-control devices used by management and the state of Vermont? What other takeover defense strategies are commonly employed by public companies?
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Complete the Excel template for the valuation of BNJ based on its peer companies’ multiples. Are the offer prices reasonable? Should the board accept one of the offers?
Case Study Questions Answers
1. Ben & Jerry’s (BNJ) mission statement has three dimensions. Using the facts of the case, how well has the company fulfilled each of them? Why did BNJ become a takeover target?
Ben & Jerry's, a well-known ice cream company, has a mission statement that comprises three dimensions: product, economic, and social. In terms of the product dimension, Ben & Jerry's has been successful in offering high-quality ice cream in distinctive and creative flavors. The company has also expanded its product portfolio to include non-dairy choices, frozen yogurt, and other sweets. This has helped the company attract a broader customer base and stay competitive in the market. In the economic dimension, Ben & Jerry's has achieved profitability and expanded into worldwide markets. However, the company has faced criticism for selling to a larger organization and abandoning its beliefs in order to boost earnings. This has led some stakeholders to question whether the company is still committed to its mission statement and values. The social dimension of Ben & Jerry's mission statement has been a strong focus for the company. The company is deeply committed to social and environmental justice and has taken steps to assist these causes, such as utilizing Fairtrade-certified products, donating a portion of its sales to charitable organizations, and supporting climate change advocacy groups. This has helped the company establish a strong brand and dedicated client base.
When Unilever acquired Ben & Jerry's, they recognized the opportunity for development and profitability. Additionally, Ben & Jerry's had a distinct and socially responsible image that Unilever could use to attract consumers who respect these qualities. However, several stakeholders criticized the acquisition, believing that the company had abandoned its ideals by selling to a larger corporation. So, Ben & Jerry's have successfully implemented its mission statement in the product and social dimensions. However, the company has faced criticism in the economic dimension for selling to a larger organization and potentially abandoning its values. Nonetheless, the company has a strong brand and dedicated client base, which can help it continue to achieve its mission statement in the future.
2. Who has the ultimate control of the assets of a publicly-traded company like BNJ at the time of the case?
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