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Blue Ridge Spain Case Solution

Solution Id Length Case Author Case Publisher
2597 1468 Words (6 Pages) Nicholas Athanassiou, Harry Lane, David Wesley, Jeanne M McNett Ivey Publishing : 9B02M003
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The case study provides insight into how Blue Ridge, owned by Delta foods, grew over the years but started failing under bad leadership. Blue Ridge was made in 1959 and it quickly became famous for its fast food. Blue Ridge was sold to an investment group for $4 million in 1974. They then experienced a sales growth of 96% every year however this was locally, and their international strategy was not successful. In 1981, Blue Ridge was then acquired by an international beverage company for $420 million and they were able to expand internationally under the company. Finally, the company was sold to Delta Foods in 1996 and this is where they saw proper international growth.

Following questions are answered in this case study solution

  1. What have been the major difficulties between the joint venture partners in the past? How much of this is due to a different business outlook and how much of the outlook is a reflection of the culture?

  2. What were some of the signs that Costas understood the intangibles of culture and business systems prior to the hiring of the new VP? Will Costas be able to execute the plan? If you were Costas what would you do? Remember he has been 17 years at Delta Foods.

  3. As Terralumen management, if Delta continues with its dissolution strategy for the joint venture what would you do? That is, how would you go about wrapping up the joint venture for your best interests given your goals and the way you do business? Will Delta accept your solution?

Case Analysis for Blue Ridge Spain

Gene Bennet, Blue Ridge’s director of Business had worked hard on building a business strategy that would ensure the company’s success and allow it to successfully venture into other countries and enter their markets. Moreover, he had helped Costas to develop a skill set that would help him in the upcoming years and guide the company during difficult times. However, all was not well for the company as they suffered a major setback when they recruited an outsider for the position of regional VP instead of Costas. The new VP had no experience in ventures or managing operations. This led to their fall as the new VP made decisions that were harmful to the organization, and they led to him asking Costas to come up with a dissolution plan to dissolve the venture with Terralumen.

1. What have been the major difficulties between the joint venture partners in the past? How much of this is due to a different business outlook and how much of the outlook is a reflection of the culture?

There were major difficulties that arose between Blue Ridge’s joint ventures. Firstly, an issue arose with their Spanish joint venture that was called Terralumen. Costas was assigned as a European director to encourage Terralumen to support its strategy of faster growth. Blue Ridge wanted a rapid expansion of stores in Spain and Costas’ job was to encourage the Spanish venture to take action to support their strategy. However, when Costas tried to encourage them to do this, Rodrigo, who was the managing director of the joint venture, did not want to do this even though the vice president of Terralumen’s group wanted to go ahead with Costas’ strategy. Rodrigo believed that he was better aware of the market and did not want to grow too fast in the Spanish Market. 

The second difficulty arose between Blue Ridge and its Kuwaiti joint venture. Blue Ridge’s partners wanted to dissolve the enterprise in Kuwait because the Kuwaitis were not meeting growth targets. So, to deal with Costas visited Kuwait during the month of Ramadhan and spent time with them to connect with them. Although this was seen by multiple managers as a waste of time, it was beneficial because Costas was able to gain the partners’ trust. 

These issues mostly arose due to the differences in perspectives. People in different countries believed that they knew more about their markets and did not want to speed up growth as it would be harmful to the joint venture and if they did go ahead with the expansion, the restaurants would not be successful.

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