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Chattanooga Ice Cream Introduction
Chattanooga Ice Cream Inc. (CIC) is a producer of mid-priced basic ice cream products (5 main flavors) and a completely owned subsidiary of Chattanooga Food Corporation. The CIC division president and general manager is Charlie Moore and has held this position since his promotion in 1993, see Figure 1 for the organizational chart. CIC is one of the largest regional manufacturers of ice cream with most of their sales to supermarkets and food chains.
The Chattanooga Food Corporation (CFC) is a family-controlled enterprise that was founded in 1936 by Charlie Moore’s grandfather. CFC consists of three divisions of which the Ice Cream Division is the smallest of the three, with revenues of $150 million USD per year. Chattanooga Food Corporation as a whole was performing well; the Ice Cream Division had experienced declining sales and profitability for four consecutive years. CIC revenue dropped from $185 million to $150 million and in 1996, lost their third largest customer Stay & Shop (switched to Sealtest brand) with revenues of 6.5 million. This latest loss will more than likely force a 5th straight year of lower revenues and profitability. Across this same period of time, the net profit decreased from approximately $6.75 million to $3.85 million. The causes of the decreases where in part to a reduction in the U.S per capita consumption of ice cream as well the increased competition from premium brands like Sealtest, Breyers and Dreyers and super premium brands like Haagen-Dazs and Ben & Jerry’s. The premium and super premium brands offered more flavor options, mix-in combinations as well as yogurt products most of which CIC’s factory was not tooled to produce.
Starting in 1993 CIC had attempted to improve the bottom line by taking action on a number of fronts including, The promotion of Charles Moore to President and General

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