Blue Ridge Spain

1901 Words Jan 23rd, 2012 8 Pages
Table of Contents
Executive Summary 1
Dissolution of Blue Ridge Spain 1

Restructuring Management Based on Growth 2
LARGE GROWTH POTENTIAL 2 MEDIUM GROWTH POTENTIAL 2

SUSTAINABLE SIZE MARKETS 2

Growth Plans for Spain 3

Strategic Alternatives 3

EQUITY BASED STRATEGY 3

NONE-EQUITY BASED STRATEGY 4

Executive Summary

International business meshes across multiple domains most notably market entry strategies and sociocultural variances. Factoring in those two critical aspects and giving them the right amount of attention is the separating line between success and failure. Terralumen, Blue Ridge, and Delta are all successful companies; However, by not observing the basic requirements of
…show more content…
Delta’s attempted method of dissolution would have ultimately lost because of two factors: 1) lack of understanding of the Spanish culture and preference, as well as, 2) their lack of restaurant experience. Further, it would decrease the chances of future successes in Spain since their dissolution strategy will certainly be known across many industries and political networks. This would make Delta’s ability to establish new contacts, find and purchase property, apply for a food license, hiring qualified local managers, gaining new customers and opening new stores a difficult and costly undertaking.

As stated by Costas, Delta has insufficient capital for its planned expansion (BRS p.12) which is required if it was to venture on its own in Spain. No longer having a partner, Delta would be required to put up 100% of the costs necessary to expand the business, rather than the 50% previously required. Without the contacts Terralumen has, these costs would likely rise as well. The real estate market requires extensive knowledge, and without this knowledge, they will likely pay a large premium.

Restructuring Management Based on Growth

Delta seems to be following a pure P&G philosophy of employing overseas the same policies and procedures that work at home (MGE p.345). P&G techniques have historically erred because of a lack of knowledge in business culture as in the

More about Blue Ridge Spain

Open Document