Academic journal article Journal of the International Academy for Case Studies

Altos De Tinogasta, Argentina

Academic journal article Journal of the International Academy for Case Studies

Altos De Tinogasta, Argentina

Article excerpt

CASE DESCRIPTION

This case challenges students to develop alternatives for (within the next 12 months) very substantially increasing the revenues of the Altos de Tinogasta "productive real estate" company in Argentina. The case is based on data collected by one of the authors in Argentina. The case is appropriate for senior-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. Gabriel Clusellas is President of Altos de Tinogasta-La Aguadita S.A., a farming/real estate company located on 3000 hectares in the town of Tinogasta, Province of Catamarca, in Argentina. The business model Altos de Tinogasta (hence, AT) is using, and the results the company has achieved so far, are as indicated below:

1. The 3000 hectares are being planted in two crops: olives and grapes. The first harvests will be in 2013.

2. The hectares being planted in olives have been divided up into 216 parcels of 10,000 square meters each; these parcels are being offered to investors at a price of $27 ,000 per parcel. The hectares being planted in grapes have been divided up into 208 parcels of 2,500 square meters each; these parcels are being offered to investors at a price of $1 5 ,000 per parcel.

3. Of the 104 parcels planted in grapes so far, 81 (that is, 78%) have been sold. Of the 108 parcels planted in olives so far, 40 (that is, 37%) have been sold. However, the trend in sales is not reassuring: After a very strong performance in 2010 (a total of 71 parcels were sold that year), only 22 parcels were sold in 2011 while in the first half of 2012, only 8 parcels were sold. To continue developing its infrastructure and to continue planting additional parcels with olives or grapes, AT needs to substantially increase its revenues.

4. The objective Mr. Clusellas has set for the company is to generate revenues of at least $2,000,000 within the next 12 months; this would be a very substantial increase in the total revenue of approximately $500,000 generated by sales of plots in 2011.

5. Mr. Clusellas has invited Professor Carlos Aimar to develop (within 30 days) a set of alternatives for achieving the above objective, that is, that over the next 12 months, AT should generate at least $2,000,000 of revenue.

Additional data and information in the case include:

1. Regarding Argentina: Historical overview, a sample of recent demographic statistics from the World Bank, (and for benchmarking purposes, comparable statistics for the United States), plus information on the economy of Argentina.

2. Regarding the company: Business model, current marketing strategy, current performance, and numerous factors impacting that performance.

3. Additional information: Information on the activities, interests, and opinions of members of the market AT has targeted, information about competing products (both domestic and international), and information about the real estate industry in Argentina.

ALTOS DE TINOGASTA

The Situation

Sensing that his meeting with Mr. Gabriel Clusellas, President of Altos de Tinogasta-La Aguadita S.A. was ending, Professor Carlos Aimar gathered up his notes. Although he might, later on, need specific information from those notes, Aimar knew he would have no trouble remembering the challenge Mr. Clusellas had given him, that is, to identify (within the next 30 days) a set of alternatives for (over the next 12 months) generating revenues of at least $2,000,000 for Altos de Tinogasta (hence, AT). Since the inception of the company in 2009, the two "products" which AT has been selling are: 1) 10,000 square meter parcels of land owned by AT and planted in olives; and 2) 2,500 square meter parcels of land owned by AT and planted in grapes. In 2010, sales of plots generated approximately $1,500,000 of revenue for AT. …

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