Question

Case 6-1  Chobani

Chobani LLC, is a producer and marketer of Greek yogurt. The company was founded in 2005 by Hamdi Ulukaya, an immigrant from Turkey, who recognized the lack of options for high-quality yogurt in the United States. The company is headquartered in Norwich, New York, and it employs approximately 2,000 employees. It operates two manufacturing plants—its original facility in central New York and a second new state-of-the-art facility in Twin Falls, Idaho.

The mission of the company is “To provide better food for more people. We believe that access to nutritious, delicious yogurt made with only natural ingredients is a right, not a privilege. We believe every food maker has a responsibility to provide people with better options, which is why we’re so proud of the way our food is made.” Chobani’s core values are integrity, craftsmanship, innovation, leadership, people, and giving back.

The company’s beginning in 2005 occurred when Hamdi Ulukaya discovered a notice about an old Kraft yogurt factory in South Edmeston that was closed. He decided to obtain a business loan in order to purchase it. Between 2005 and 2007, Ulukaya worked with four former Kraft employees and yogurt master Mustafa Dogan to develop the recipe for Chobani Greek Yogurt. Between 2007 and 2009, the company started to sell its yogurt in local grocery stores including Stop and Shop and ShopRite. By 2010, Chobani Greek yogurt became the best selling Greek yogurt in the United States. The company pursued global expansion by entering Australia in 2011 and the United Kingdom in 2012. In 2013, the company opened its international headquarters in Amsterdam, and Hamdi Ulukaya was named the Ernst and Young World Entrepreneur of the Year.

Chobani has achieved its success in large part due to its ability to innovate in its product lineup. For example, in 2016, it launched a new line of yogurt drinks, more flavors of its Flip mix-in product, and even a concept café in Manhattan.

The company also created a food incubator program that is designed to provide resources, expertise (e.g., brand and marketing, packaging and pricing), and funding to small, young companies that have promising ideas for new natural foods that they aspire to develop.

Although Hamdi Ulukaya has been extremely successful in his founding and establishment of Chobani, he has recognized that there are some key lessons learned from his experience as the head of a young but very successful and industry-leading company. These include the importance of hiring people with functional experience such as marketing, supply chain, logistics, operations, and quality control, as they were essential to the smooth operation of the company. In addition, remembering to respect the competition and not to underestimate it is critical, as Chobani’s two main competitors, Dannon and Yoplait, launched their own Greek yogurt lines, and they were able to win back some of Chobani’s market share over time.

Discussion Questions

5.   Think about managing change at a personal level. Why is it so hard for so many people to change their behavior or way of thinking? Are these personal challenges to managing change also relevant to managing change in organizations?

6.   What can you learn from Hamdi Ulukaya about what is needed to become a successful entrepreneur?

Answer 1

Answer 5: There are several reasons to for many people who does not change their behavior or way of thinking, such as, motivated with negative emotions with the fear of losing something, trapped with cognitive biases, try to target bigger goals without thinking about short term goals to fulfill, lack of commitment, resistance to change, unable to accept any failures, underestimate the entire change process, etc.

Yes, personal challenges to managing change are also relevant to managing change in organizations. As commonly people resist change due to the job loss or status in the organization, sometime forceful act in the organization is not accepted by the employee, reward systems not aligned based on the employee benefits, fear for unknown future, sometimes pressure developed due to peers at workplace, no trust and faith, wrong decision making due to organizational politics and wrong process followed during change implementation.

Answer 6: Some of the qualities which are needed to become a successful entrepreneur are, such as, risk taking, innovative, decision-maker, work smartly, hire people to get the work done in which you are not good which allows you to focus on the important aspects of the business (i.e. good at delegation), fail fast , be realistic and know their purpose.