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ARCOR

ARCOR . How to withstand in turbulence …. Case Brief . Argentina economic crisis Growing markets like India China Rivals Products – Normal, Luxury Choc Arcor in crisis Globalization strategy. Need to globalise. Confectionary industry globalised

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ARCOR

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  1. ARCOR How to withstand in turbulence …..

  2. Case Brief • Argentina economic crisis • Growing markets like India China • Rivals • Products – Normal, Luxury Choc • Arcor in crisis • Globalization strategy

  3. Need to globalise • Confectionary industry globalised • Producers dependent on Non Domestic market

  4. Challenge • Demand • Cocoa Price volatility • Others were inexpensive • Developed countries had supplier base

  5. Production • Locate near source of supply • Larger capital investment • Cost of production 9 million dollar

  6. Argentina Crisis • Financial Crisis 1999 • Growing public debt • Contracting economy • Higher interest rates • Devaluation of economy

  7. Arcor in crisis • Raised employee wages by 20% • Arcor had net debts of 360 million dollar • Post devaluation Leverage ratio of 42% • Others were 177%

  8. Strategy • Reducing / Repricing – Shortening of collection window • Came up with packing strategies • Cashing on local landscape disarray

  9. Choice of Product L Degree of local adaptation H L Expected payoff from globalization H

  10. Choice of Market H Strategic imp of market L L Firms Ability to exploit market H

  11. Greenfield or Cross Border H Market growth rate L L Uniqueness of corporate culture H

  12. Mode of entry 100% Degree of ownership 0 ASIA 100% 100% Exports Local Production

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