SECTION 1: THE COUNTRYMANAGER CASE
Kay Pasah, head of the Consumer Healthcare Division of Allstar Brands, looked across the table at her category and brand managers. She had a determined look. "In addition to our United States business, our operations in Europe and alliances in Asia are performing well. But these markets are mature with lots of competition and aging, slow growing populations. On the other hand, we've been too slow in developing our business in our own backyard — the Americas. Our board believes, and I agree, that to generate the kind of growth needed to drive our stock price, we need to develop a market presence in Latin America. What I need from you is an analysis of the markets in Latin America and a plan to enter the region. You need to tell me where we should be, when we should be there, and how we will need to manage the business. I want us to be in at least one country in the region next year. The board feels that in the near term we need to be in one or more of the following countries: Argentina, Brazil, Chile, Mexico, Peru, and/or Venezuela."
Allstar Brands is a U.S.–based consumer products company that produces and sells ethical (prescription) pharmaceuticals, OTC (over-the-counter or nonprescription) drugs, and consumer products. It is an $8.9 billion firm that was formed in 1924 and competes with a variety of larger and smaller firms, depending on the product market. It has a number of leading brands in various product categories, including (in the OTC division) Allround, the leading liquid cold remedy in the United States, and Zemlef, a heartburn remedy soon to be converted from prescription to OTC status. The consumer products division includes various types of packaged goods: hand and beauty soaps, laundry detergent, shampoo, toothpaste, shaving cream, etc. Over the years, it has expanded its product category width through internal new product development and acquisition of brands and companies. The company had been historically organized into three divisions (Ethical Pharmaceuticals, Consumer Products, and International), but recently reorganized into a global product management structure with three major divisions (Ethical Drugs, Consumer Healthcare, and Consumer Products). A group of category managers exists within each division. For example, the Consumer Healthcare division has an oral care category manager, a vision care category manager, etc. Most major brands also have their own brand manager who reports to the category manager. Under the new structure, each division is responsible for its own international operations and, to some extent at least, can pick the products and categories to pursue internationally. The category managers meet regularly with their counterparts from other countries to coordinate the approach for managing the brands across world markets. In addition, within the United States, the VPs for international operations from within each division meet on international strategy to develop synergies in production, exporting, country expertise, and so on. Figure 1 illustrates this organizational structure.
The CountryManager Case―Page 7
Figure 1: Organizational Structure of Allstar Brands
Europe Oral Category Asia Toothpaste
Country Analysis and Entry Decisions
Latin America is a region of great potential. With a population of approximately 450 million, the region represents a population that is 50 percent larger than that of the United States and Canada. The region has a history of having been politically unstable and has had many weak economies characterized by low growth, high inflation, and a reluctance to take tough economic actions to correct these problems. The dominant national language across Mexico and Central...
Please join StudyMode to read the full document