Academic journal article Journal of the International Academy for Case Studies

Aboca S.S.: Perfecting a 700 Year Tradition of Botanical Remedies

Academic journal article Journal of the International Academy for Case Studies

Aboca S.S.: Perfecting a 700 Year Tradition of Botanical Remedies

Article excerpt

CASE DESCRIPTION

This case was developed for an MBA marketing strategy course and as an international marketing elective, ideally suited for non-US MBA programs. As an MBA marketing strategy course it encompasses analysis and decision making from broad strategies concerning growth management, industry structure attractiveness and competitive advantage. Due to the market data in this case these broad strategic decisions can be augmented with marketing decisions for branding, product positioning, product line policies, channel selection, price policies and marketing communication policies. The international aspect of US market entry from an Italy based company and the corresponding logistical, economic, regulatory and cultural contrasts allow students to practice international marketing concepts. This case can be taught in one class session with three to four hours of student preparation.

CASE SYNOPSIS

Aboca is a family owned herbal supplement manufacturer located in Tuscany Italy. It has experienced remarkable success in Italy with exceptional growth (25% CAGR) and has achieved market dominance in herbal supplements in its Italy market. It now faces a classic growth dilemma as it approaches saturation in its core supplement business. The case presents the array of product-market growth challenges to the firm with the associated risk and potential returns. Within this matrix of opportunities the firm's successor to the president (founder's son) must evaluate a potential US market launch. US industry data, consumer buyer behavior, competitor positions, channel options and regulatory constraints are presented for analysis and students are expected to assume the successor's role in choosing an entry strategy with a detailed action plan.

The case discussion is most effective if students have read marketing concepts for growth strategies (e.g. David Aaker, Strategic Market Management, 5e., Wiley, chapter 12)and have mastered concepts of product positioning and marketing mix decisions. The discussion is best organized by beginning with growth strategy decisions and then progressing to the US market launch decision. At a minimum the US launch decisions should include a product positioning statement and policy decisions for branding, breadth of product line, communication and pricing. There is sufficient data for students to specify operational decisions for brand names, product stock keeping units, advertising copy, sales promotion tactics and price points. However it is recommended to postpone such specific marketing mix decisions to a second class session.

ABOCA CASE STUDY

Massimo Mercanti, the son of the founder of Aboca S.S., returned to his hotel after celebrating an exciting victory by his favorite soccer team, Juventus, over its major rival, Milano. It is 12:30 AM, October 20, 2001 and Massimo must prepare to present his growth strategy for Aboca's herbal business in two days. His United States consultant has just sent his US market recommendations. In reviewing the draft Massimo is concerned that this is the third strategy revision within the past 18 months and as yet no decision has been made. After two years of analysis he wonders if Aboca's herbs will ever reach the 275 million Americans. The export market has changed and he wonders if the US market is Aboca's best avenue for growth. In the past year new opportunities have developed in Italy, and other international markets have begun to develop.

Massimo knows his father, Valentino, wants him to decide and take responsibility for a major division within the firm, and certainly the US offers a great opportunity although not without substantial risk. As Massimo reflects on these challenges he feels envy for the simple strategic decisions of his beloved Juventus. If only the world of business could be so straightforward.

Aboca's History

The company, Aboca S.s., derives its name from a beautiful Tuscan village in the Valtiberina. …

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