Academic journal article Journal of the International Academy for Case Studies

Renault Yahoo! Argentina

Academic journal article Journal of the International Academy for Case Studies

Renault Yahoo! Argentina

Article excerpt

CASE DESCRIPTION

This case challenges students to develop a strategy to grow Renault's business in Argentina, now that the economy is recovering from the severe economic disruptions caused by the fact that in 2002 Argentina defaulted on its debt and was declared bankrupt. The case is based on data collected by one of the authors in Argentina. The case is appropriate for senior-and level undergraduates as well as students in MBA and Executive Development programs. It is designed to be taught in a one hour and a half? class session, and is likely to require at least a couple hours of preparation by students.

CASE SYNOPSIS

Mr. Pedro Gouzou is Vice President of Marketing for Renault Argentina S.A., the Argentine subsidiary of the French automobile assembler and marketer, Renault S.A. Due to Argentina's default on its sovereign debt and the subsequent deterioration in the economic environment in Argentina, Renault's sales of new cars in Argentina fell dramatically. In 2003, for the entire country of nearly 40 million people, demand in Argentina for new Renault vehicles averaged slightly more than 40 vehicles per day. At the end of 2004, however, with the Argentine economy now recovering quite strongly, Renault is eager to rebuild sales. Additional data and information in the case include:

1. For Argentina: Historical overview, a sample of recent statistics from the World Bank, and (for benchmarking purposes), comparable statistics for the United States.

2. For the company (at both local and global levels): Historical overview, current performance, and numerous factors impacting that performance.

3. Characteristics of the local company's current strategy, including descriptive information on the product line, characteristics of the distribution system, information on the promotion and pricing strategies the company is currently using, etc.

4. Characteristics of the current competitive situation.

5. Detailed data on the attitudes and behaviors of buyers of cars in Argentina.

THE SITUATION

Sensing that his meeting with his CEO was ending, Mr. Pedro Gouzou, Vice President of Marketing for Renault Argentina S.A. gathered up his background materials and the notes he had taken during the meeting. Although he might, later on, need specific information from those notes, Gouzou knew he would have no trouble remembering the basic charge his CEO had given him: to increase (within the next twelve months) sales of new Renault cars in Argentina by 15%. "Thank goodness, " Gouzou said to himself as he headed back to his office, "that here in Buenos Aires I have a very excellent and innovative marketing team, to work with me to meet the challenge given us by our CEO. And thank goodness too that the economy here in Argentina is now recovering vigorously from the bankruptcy Argentina experienced in 2002."

THE COUNTRY

At 2.78 million square kilometers (larger than India, approximately 1/3 as large as Brazil), Argentina is South America's second largest country. The country is 3,500 kilometers long (2,170 miles), and 1,400 kilometers (868 miles) wide at its widest point. While the climate ranges from tropical in the north to sub-antarctic in the far south, most of Argentina lies in the temperate zone. Similarly, while the landscapes range from jungles to glaciers, a significant portion Argentina consists offertile alluvial plains covered in grasses and known as "pampas." In the west (that is, in the rain-shadow created by the Andes mountains), these grasslands are quite dry. In eastern Argentina, however, the pampa receives adequate rainfall, is one of the best agricultural areas in the world, and is intensively farmed (soybeans, plus wheat, corn, sunflower and other grains) and ranched. Other parts of the country support a wide variety of additional agricultural activities, including the growing of fruits (including grapes for wine), tobacco, sugar cane, and vegetables. …

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