A Tale of Two Empires
This case is an example of a local company attempting to establish an international presence in an emerging economy.
The tensions of primary interest are the decision to go, the decision to stay, changing the offering, considerations of demographics and drivers of an emerging economy. Specifically, the case discusses the decision points faced by Mr. Sudeep Nair, Executive Director, Food Empire Holdings Ltd. These decisions include:
- whether to enter Russia with computer products;
- whether to switch to consumer branded products;
- how to market MacCoffee; and
- whether to stay in Russia despite the economic collapse.
The discussion following these decision points eventually leads to an understanding of why MacCoffee had become the number one branded offering. Some of the core information provided in the case described Russia’s changing demographic, and the strong investment culture in post-communist Russia.
The situation that Mr Nair found himself in was after the Asian economic crisis in1998 and before the Russian crisis: the Russian economy was facing a treasury loan default, a marked devaluation of the ruble, lower GDP, and a loss in foreign direct investment. In addition, the new democracy was struggling.
Mr Nair needed to consider if the economy could recover, if the new middle-class consumer would emerge and, most urgently, if the initial success of MacCoffee could continue. The questions facing Mr Nair and his team were not only how to operate under these conditions, but also if Food Empire should continue to operate in Russia.
Entrepreneurship, Growth, cross-border business, coffee, new product introduction
Asian Studies | Marketing | Strategic Management Policy | Technology and Innovation
Strategy and Organisation
Russia and Singapore
Executive Education; Postgraduate; Undergraduate
Singapore Management University