Business Analysis : Carvel in Beijing

Essay by EssaySwap ContributorUniversity, Master's February 2008

download word file, 18 pages 3.0

Downloaded 114 times

1.0 Introduction In 1934, Tom Carvel founded Carvel Corporation. It had one of the oldest and most endearing histories of all the ice cream companies in the U.S. Mr. Carvel used a combination of fresh ice cream and innovative products and manufacturing techniques to establish himself as the local, family-orientated ice cream parlor in the New York City area. In 1947, Mr. Carvel franchised his first store and proceeded to become one of the pioneers in fast food franchising.

Throughout the 1960s and 70s, the gravely-voiced Mr. Carvel used his folksy and savvy style to dominate the greater New York area. By standardizing procedures and providing franchisees with exclusive product designs and marketing material, Mr. Carvel expanded all along the East Coast. By the early 1980s, there were over 800 Carvel stores in operation along the East Coast and in some Midwestern states.

However, by the mid 1980s, the recession and the strain on Tom Carvel to manage his business began to take its effect on the franchise.

Sales and quality control began to decline, and events forced Mr. Carvel to consider changes. In 1989, faced with diminishing sales and increasing store closures, Tom Carvel reluctantly sold his company to Investcorp, a Bahrainian-based investment-banking group. The Investcorp strategy centered on acquiring previously gainful companies whose profitability had diminished in recent years due to recession.

By infusing new capital and bringing in a new management team headed by CEO Steve Fellingham, the former president of Kentucky Fried Chicken, Investcorp focused on growth and revamping Carvel?s listless image. Management was forced to walk a fine line between creating a new, vibrant image for Carvel and alienating longtime, loyal customers. Currently, Carvel Corporation?s mission statement is ?Working together, we will make Carvel the leading choice for unique, quality frozen desserts by consistently...