Ice-Fili Case Summary
The general external environment surrounding Ice-Fili is affected by each of the six general external segments. The two greatest events that Ice-Fili had to overcome was the political collapse of the former Soviet Union in 1991, which had a great impact on the ice-cream industry as the economy shifted to an open market and ice cream companies from other countries moved into the Russian market. Those that survived the political collapse were then hit with the 1998 financial crisis, which caused a severe financial devaluation of those entities. After the financial collapse, many in the frozen-food industry found themselves out of work. Looking for a new market segment, many found their way into the ice-cream industry. Using previous frozen food experience; start-up was relatively easy since they already had cold storage and production capabilities. Ice-Fili and other pre-collapse ice cream producers faced legal issues that arose after the collapse, which made it almost impossible to obtain patents and trademarks of their old Soviet brands. This left established firms very susceptible to current competition and new entrants to the ice-cream industry.
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The Russian ice-cream industry has high economies of scale, and new entrants will be saddled with high start-up costs to open their production facilities. Also, product differentiation is high with a multitude of product varieties already available, and many well-established brands already in existence. This equates to the barriers to entering the ice cream market being high. However, I would still think that the threat of new entrants is high. As mentioned before, after the 1998 financial crisis, many frozen-food manufacturers were able to switch over into the ice-cream industry fairly
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