Essay about Blue Ridge Spain Case Study

686 Words Oct 7th, 2010 3 Pages
Blue Ridge Spain

This case is about a joint venture between the American company Blue Ridge which is owned by Delta Foods and the Spanish company Terralumen in Spain. Problems arose because of disagreement concerning the future growth rates set by Delta which are considered as unrealistic by Terralumen. Mikael Södergran is the young VP of Europe for Blue Ridge and wants to see the joint venture perform in the short run as this is the task he was given by Delta. He is very direct, getting to the business part immediately and fits into the American expectations of making business- quick, efficient, delivering performance. He is very task oriented and thinks that decisions have to be made based on objective facts (“The contract says
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He employed Eduardo Rodrigo as the Joint venture’s managing director who was opposing the growth credo so much that he was soon replaced. Alvarez supported this idea and I think that he would support the growth strategy if he didn’t have such a strong opposition to the topic from his supervisor. I think that he will join the side of his supervisor during the discussion. Alvarez’ boss was upset when Södergran pushed to get through with the growth objectives on his first meeting. I think that Alvarez is a good friend of Costas whom he sees as reliable business partner. There are two following alternatives for Södergran:
- buy Terralumen out and take over control to grow - Costas would not support this, problem of the key managers to be replaced, bound to contract for another year (Exhibit 5).
- allow Terralumen to run the Spanish operation for a limited time to concentrate on new markets - could work, Costa’s support, possible opposition from Delta, later on increase pressure on joint venture.

Reasons for the first choice include the responsibility for him to meet the objectives, but there might be a high price because of the growth potential of the JV, but controlling it is worth it from Södergran’s point of view. The problem might be the realization of this divorce. The best deal for Delta can be achieved through a good price for the Spaniards. The key managers can be replaced by

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