Strategic Management In Developing Countries by James E. Austin

Author:James E. Austin
Language: eng
Format: epub
Published: 2018-10-13T16:00:00+00:00

Population Services, Inc.

What were the critical components of the social marketing program?

How successful has it been?

Why did it encounter problems?

What actions do you recommend to management and government?

NOTE

1 For an extended discussion of marketing issues, see James E. Austin, Managing in Developing Countries (New York: Free Press, 1990), Chapter 9.

Sabritas

John Warner, president of Sabritas, S.A. de C.V., was proud of its achievements. Since its reorganization in 1967 as a wholly owned subsidiary of PepsiCo Inc., sales volume had increased from $600,000 to an expected figure of nearly $200 million in 1981, with a 30% dollar volume increase in 1980. Dollar sales had grown at an average rate of 54% per year, even after a nearly 50% devaluation of the Mexican peso in 1976. Operating profits had grown equally spectacularly, and Sabritas was a valuable contributor to its parent, PepsiCo International Foods Division (see Exhibits 1-3).

As the main supplier to the Mexican snack food market, Sabritas manufactured and distributed a line of flavored snacks, including potato chips and corn- and wheat-based items in a variety of sizes and shapes. Plans for the 1980s were ambitious: A 100% capacity expansion program involving construction of a fourth and fifth plant and more than 4,000 new jobs was to be completed by 1985. Inaugurated on November 15, 1980, in the northern city of Saltillo, a third plant increased Sabritas capacity by 30% and provided 300 more jobs. Revenues were projected to expand 25% a year; Sabritas was to maintain its operating profit margin of 14.5%. With this expansion program, it expected to maintain its dominant market share, its position as one of Mexico’s top private firms, and its ability to contribute substantially to its parent company.

Despite its past performance, Sabritas management faced difficult problems. Warner and his executive team were concerned about the company’s ability to continue to meet home office expectations, given tendencies in the Mexican business environment. Four areas—expansion and government regulations, raw material supplies, consumerism, and company organization and management development—appeared critical to the design and implementation of a successful corporate strategy during the 1980s.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.