Charlotta Forsberg, 125780
Case 2, Group B
Case: Benecol in the US – Step 1 of global expansion
1. What was Raisio/Benecol’s initial strategy for going international?
2. What is (or are) the problem(s)?
3. What should Rabbe Klemets do?
When Raisio Group wanted to launch Benecol on the international market in 1997 time
was of the essence. The product, Benecol, had great potential but if it would not penetrate
the global market quickly enough, competitors would have been able to steal many of the
advantages associated with the new product. (Furu 2009) To accomplish the market
expansion overseas Raisio decided to go for licensing as the core internationalisation
strategy. The advantages with licensing are low costs and risks associated with opening a
foreign market and thus make a very attractive choice for companies lacking the
willingness to invest substantial financial resources to unfamiliar and politically volatile
foreign markets. (Hill 2005) Hill (2005) also points out that economically advanced
countries with politically stable democratic nations offer the smallest risks therefore
making the USA, the country with the largest market for functional foods, an attractive
market for Raisio.
The problems arising in combination with the licensing were many. First of all the timeline
was problematic. Raisio needed to find a partner quickly not to loose marketing
advantages. Such large scale, rapid entries to markets have both negative and positive
effects (Hill 2005). On the positive side entering a market on a significant scale helps
attract customers and distributors. Furthermore it could raise the barriers for other
