Cool Creamery Moose

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   EXECUTIVE SUMMARY

        Greig Perantinos, owner of Cool Moose Creamery, has started his own retail ice cream business when he was in his first year at The University of Western Ontario, London, Ontario and he wanted to help pay for his studies at the Richard Ivey School of Business. Cool Moose opened in May of each year for a four-month period throughout the whole summer, operating until Labour Day.

By 2010 he has already successfully opened two Cool Moose stores at two different locations – Alliston, in 2009 (small town with population of 13,000 people, within the town of New Tecumseth, Ontario) and Tottenham in 2008 (located south of Alliston).

Alliston had some features which helped the growth of business and increased profitability:

• It had important tourist attractions: The South Simcoe Railway’s historic steam train (it lured people across Canada to see Canada’s oldest operating steam train).
• It was well known as the birthplace of Sir Frederick Banting (the co-discoverer of insulin).
• It held an annual festival – the community’s Annual Potato Festival – in June each year, which attracted thousands of people annually to the area.
• It was home to the largest employer in Simcoe County, Honda Canada, an automotive manufacturing operation that had two plants in the area. In other words, it represented a great zone to make business.
• Finally, although a small community, Alliston had a vibrant downtown area, where local residents and tourists regularly frequented the restaurants and shops

(a great potential to attract high number of customers to Cool Moose).

In Summer 2009 sales have increased at the Tottenham and additionally new store launch in Alliston boosted sales of 233% compared to 2008. Perantinos has focused primarily on store in Alliston to see how he can improve his return rate on this location. Only major competitor was Dairy Queen, unlike Cool Moose, they were selling soft-serve ice cream that’s why Perantinos decided to invest in machines for producing soft-serve ice cream with the aim attracting customers from Dairy Queen and improve/rise his profitability.  

    Overview

Organization:

Cool Moose Creamery

Industry:

Scooped ice cream, frozen yogurt, milkshakes and floats

Issue:

        Adding soft-serve ice cream machines for profitability

My role:

Advisor for Cool Moose

Audience:

        Cool Moose owner - Greig Perantinos

Mission:

        Improve/Increase profitability

Vision:

         Provide all varieties of frozen treats, including soft-serve ice cream

Goals/Targets:

        Short term: Grab customers from Dairy Queen

        Long term: Possible expansion to other locations

Constraints:

        Purchase of new triple head machine for $12,000 or single head used machine for $2,000

Key success factors (industry):

        Bigger variety of products in Cool Moose including milkshakes, frozen yogurt and floats

Key risk factors (industry):

        Ice cream industry is seasonal as it works only in summer from May until Labour Day.

Current financial situation:

• Profitable and stable company and in business more than 3 years.
• Experienced company in terms of operating ice cream store.
• Return on equity is very high 233%

                                        SWOT analysis

Strengths:

        Cool Moose offers more products for people to enjoy, like: frozen yogurt, milkshakes and floats, while Dairy Queen doesn’t offer any of these.

Weaknesses:

        On the other hand, Dairy Queen have products which Cool Moose doesn’t have, for example: cakes, hamburgers, hot dogs. It means that Dairy Queen have products to offer in warm summer as well as in cold winter, meanwhile Cool Moose can only operate in the summertime.

Opportunities:

        Expansion to other cities with higher population to build better brand recognition and gain new customers all over Ontario. Also, customer demand in Cool Moose is pretty high and it has huge market potential.

Threats:

        Competition is pretty high in ice cream industry, because every convenience stores sell ice cream, maybe quality as great as in Cool Moose stores, but if it is cheap and located closer to customer, he/she most likely will purchase ice cream in convenience store.

            Michael Porter’s Five Forces Analysis

Threat of new entrants:

        Threat of new entrants is high (as it was said in SWOT analysis, every convenience store sells ice cream).

Bargaining power of buyers:

• Bargaining power of customers is high.
• Low switching cost, customers can switch to another company, like Dairy Queen anytime.
• Products in Cool Moose can be differentiated by flavour, size.

Bargaining power of suppliers:

The threat of suppliers is low, because there are plenty of suppliers for products which are needed to produce ice cream and other dairy frozen products.

Threat of substitutes:

Threat of substitute is pretty low, there are not much that customer can substitute for ice cream, cold drinks can be one, but there are no more substitutes.

Threat of current rivalry:

                Direct Competitor: Dairy Queen

Indirect Competitor: Convenience stores

Low entry barriers

                                                  Issue