The United States is the largest producer of frozen dairy desserts in the world. Although many of these products are destined for export, a substantial quantity of them is consumed within the United States as well. As evidence, the U.S. Department of Agriculture reports that the average American consumes between 15 and 16 pounds of ice cream each year. Additionally, Americans consume another 10 pounds per year of other frozen dairy desserts, including lowfat ice cream, yogurt, and related products.

In 1996, Starbucks and Dreyers Ice Cream (a subsidiary of Nestle) launched a series of coffee-flavored ice cream products. These products, with names such as Java Chip, Italian Roast Coffee, and Caffe Almond Fudge, contained actual coffee and were sold in supermarkets.

Group

Working in groups of 5–7 persons, answer the following questions:

1. What type of strategic alliance did Starbucks and Dreyers form?

2. In what type of market are they competing?

3. What is the rationale for the alliance between these two firms?