Dippin Dots the Business Level

Dippin Dots The business level strategy for Dippin' Dots is as a differentiated provider. Dippin' Dots relies on a unique product for its appeal. At its core, the company is a provider of ice cream with a chain of shops around the U.S. This puts it into competition with any number of other frozen treat providers -- Dairy Queen, Baskin Robbins, Marble Slab, Cold Stone Creamery, Haagen-Dazs and Ben & Jerry's to name a few.

The company's product, however, is substantially different from any of those other competitors, and this is the point on which Dippin' Dots trades. The uniqueness of the product is the primary appeal for the company's stores. The company's market appeal is targeted towards the 8-18 market, but Dippin Dots customers do not have specific needs that need to be met by this product alone. Therefore, the type of differentiation is broad differentiation, where the company offers something different customers. Dippin' Dots has also utilized a fairly broad product line.

A scan of the company's website reveals a wide variety of flavors available, and experiments such as Dots & Cream exhibit a commitment to seeking more unique products to offer the market. In addition, the marketing is focused on the differentiating features of the product in the hopes of developing mass market appeal. In addition, the company has leveraged celebrities to help give its product special appeal. The broad differentiation strategy implies that Dippin' Dots will need to stress constant innovation in order to remain ahead of competitors.

There is evidence that the company has attempted to do that, by working at building a range of different product variations in the hopes that some will stick. There are, however, some competitors that have emerged as the result of poor patent protection for the company's core product. Dippin Dots competes with a corporate level strategy. It does not have significant international operations, only a single franchise outlet in Canada. It has a somewhat broad market.

While it has a demographic niche with 8- to 18-year-olds, there are no major subdivisions of this market as Dippin' Dots appeals widely within this core target market. Technology is the key point of differentiation with Dippin Dots, as the technology used to produce this ice cream is distinctive in the industry, and delivers a product that is unique in both texture and flavor.

Without this technology, Dippin Dots would have significantly less appeal in the market, and would be largely undifferentiated from its many competitors in the ice cream industry. Beyond technology, there is little distinctive about the Dippin Dots strategy. It focuses its efforts on theme parks and movie theaters in order to best reach its target market, but there is otherwise little distinctive about its marketing efforts. The color schemes and imagery lack uniqueness, being based on standard bright colors that are attractive to children.

Overall, the company is focused squarely on the unique technology that it has and the distinctive product that this technology produces in order to attract its core audience. 2. Part of the broad differentiation strategy is that Dippin Dots must be consistently innovation in order to fend off new entrants. The ice cream industry in general is highly competitive and there are low barriers to entry. As such, Dippin Dots must retain its uniqueness in the marketplace to retain its competitive advantage.

Indeed, given that there is little distinctive about the rest of the company's market strategy, it will need to be a product innovator in order to enjoy continued success. To that end, Dippin Dots has not been successful. The company has mostly increased the breadth of the product line through the introduction of different flavors. However, this does not represent true innovation, and is unlikely to have a profound impact on the firm's competitors.

Dippin Dots, in order to succeed, must develop ways of utilizing its core product (the dots) or the core technology of liquid nitrogen freezing, to drive innovation. One major attempt at doing this is the Dots & Cream, a product that mixes the dots with conventional ice cream. This product solves a key issue with respect to distribution in that it allows Dippin Dots to begin distribution in grocery stores. This product utilizes the core product, but that product remains visible and within a fairly normal context for the industry.

However, this innovation also detracts from the uniqueness of the dots and reduces the degree of differentiation that Dippin Dots has. In addition, such a product could conceivably be matched by competitors, as a result of poor patent protections. There is also limited evidence that the market is ready to significantly embrace such a product. Patent protection is crucial to Dippin Dots' ongoing success. The company's product uniqueness is the one competitive advantage is has.

At its heart, the technology used to produce the dots is fairly simple and easily replicable. Mistakes at the outset of the company's existence led to a situation where it was unable to defend its products in court against imitators. As the result of this, any ice cream maker new or established could compete directly with Dippin Dots. This represents a major threat to the company, and highlights the need for further innovation in order to maintain market position.

The evidence therefore points to Dippin' Dots as being largely unsuccessful at developing innovative new products beyond its core dots; and the company is largely unsuccessful at fending off new entrants, having failed to defend its patent in the court of law. These two elements would indicate that Dippin' Dots is at this point a relatively unsuccessful company. It has succeeded in growing at a fair strong rate to this point, a sign of success, but may face difficulty sustaining that growth.