seating opportunities, especially during winter
periods. On the other hand, the company’s
management team underlines that Nannarella’s success is rooted in its unique flavor offerings, ice cream presentations, and
low prices. They put forth the argument that
if the company were to expand its store sizes, product offerings, and market reach, it
would risk cutting off these roots. It would
need to incur higher ice cream prices to cover increasing operational cost, such as rent
payments. It would need to decrease expensive experimentations on new flavors because of coordination problems among
stores. Nannarella would more and more
resemble the other traditional ice cream
parlors, such as Santini and Artisani. But
differential advantages, by definition,
emerge out of the potential to do something, in order to create value that others
can hardly replicate. Thus, the company
plans not to copy expansion strategies of its
competitors, namely growing the business
through broader product ranges as well as
more and larger ice cream parlors. Nannarella’s core competence is to come up with
new high quality ice cream flavors on a daily
basis. To retain and strengthen this core competence will be the center of Nannarella’s future strategy.
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