Blue Ridge Spain Case Study

1769 Words4 Pages

The importance of culture in International business today cannot be underestimated and it is imperative that attention is paid at strategic, organizational and the individual levels. The “Blue Ridge Spain” case elucidates these at all three levels. My analysis of this case is from the perspective of the Spanish corporation, Terralumen S.A. National culture is the shared implicit beliefs and tacit values that truly differentiate one cultural group from another. I will be using Geert Hofstede’s frame work to deconstruct this case into its separate dimensions.
On the strategic plane, Terralumen is a family owned company that has expanded into consumer products via joint ventures (JV) with different American companies. Their key strength lies …show more content…

BR was sold to Delta Foods in 1996 for US $2 billion. At this time, it was one of the largest fast-food chains in the world generating sales of US $6.8 billion. DF purchase of BR brought in a new cultural paradigm. DF is an individualistic, aggressive growth company with brands they believe are strong enough to support entry into new overseas markets without the need for local partnership. The DF strategy is one of direct acquisition and JV’s were not part of their strong suit. DF strategic implementation is based on hiring local managers directly or transferring seasoned managers from their soft drink and snack food divisions. The DF disdain for JVs is clearly reflected by their participation in only those JVs where local partnering was mandatory (e.g. China) to overcome regulatory barriers to entry. JVs had been the predominant strategy for BR which was unlike the DF outlook. Terralumen’s strategy was misaligned and out of sync with the DF strategy. This was unlike the complementarity that existed with BR’s strategy. This misalignment began to affect the JV relationship that had worked well with BR in the initial years. The failure of Terralumen and DF to recognize this fundamental cultural difference between their operational strategy styles i.e. Individualistic and Collectivism leads to their inability to proactively create steps for better alignment in the early period after acquisition, creating uncertainties and difficulties for both corporations. There is a lack of communication and virtually absence of trust between two new partners. DF appeared to be flexing its muscles in the relationship and using a more masculine approach compared to Terralumen’s more feminine approach. Both the corporations are strategically involved in a complex situation where they appear reluctant to address the issues at stake and move ahead together. The DF strategy of

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