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Chapter 10 Strategies For Mature and Declining Markets
Case: Renova Toilet Paper: Avant Garde Marketing in a Commoditized Category
Author(s): Bart, Y.; Chandon, P.; Sweldens, S.; Seabra de Sousa, R.
Publisher: INSEAD
Publication Date: 2010
Reference: 510-077-1
Abstract: Renova, a Portuguese toilet paper manufacturer, is battling to survive in a stagnant,
commoditised market dominated by international giants and private labels. To grow and remain
independent, CEO Paulo Pereira da Silva is considering three options: (1) private label
manufacturing; (2) new functional innovations, and (3) launching a black toilet paper. What
should he do? And how should the chosen strategy be implemented? In exploring the challenges
facing small players in stagnant commoditised categories where international giants and private
labels dominate, this case provides detailed information on consumer behaviour, competition,
and the company (including the brand and past communication campaigns). It accounts for the
success of private labels and explains when it makes sense to produce for a private label. It
illustrates the key role of marketing and branding, showing how Renova differentiated on
hedonic and symbolic benefits in a category that was thought to be hopelessly commoditized.
Case: Maver Laboratories: Tapsin, Building a Brand in Chile
Author: Koliatic, M
Publisher: Harvard Business School
Publication Date: 2006
Reference: SKE085
Abstract: Maver Laboratories (a family-owned business) was the leading Chilean laboratory in
the production and sale of over-the-counter drugs (OTC). At the beginning of the 90s, Maver lost
the marketing licenses of two very important brands from international laboratories, Eno Fruit
Salt and Anacin, which left considerable excess capacity in the laboratory and meant losing 70%
of its sales. In 1995, the Tapsin brand was created with a family of acetaminophen (paracetamol
in Chile)-based products to regain the lost sales. Maver used an unorthodox creative and media
strategy to do so. The growth of the Tapsin brand was very successful and in just a few years, it
became a market leader and a strong competitor for Bayer's Aspirin in recall level and brand
preference. As part of its business strategy, in 2000 Tapsin started sponsoring the Teleton
(equivalent to Telethon in the US), a philanthropic campaign that collected US$15 million
annually for the rehabilitation of handicapped children. In 2004, Tapsin was at a crossroads.
Sales had started to level off. The competition was using a system of monetary incentives for
pharmacy sales clerks to increase sales of products. The executives of Maver Laboratories had to
determine a marketing strategy to respond to this threat. The main decision was should they
continue with their current marketing strategy of increasing brand value through advertising - of
which the Teleton campaign was a factor to consider - or should they allocate resources to
provide direct monetary incentives for pharmacy sales clerks.
Case: Kinko’s
Author: McGovern, G; Schulman, S
Publisher: Harvard Business School
Publication Date: 2005
Reference: 9-506-024
Abstract: Over the decades, Kinko's had forged a deep emotional bond with consumers by easing
their anxiety and helping them solve pressing document processing problems. By 2003, however,
consumer research revealed that a confusing retail experience had eroded some of this good will.
Challenged to increase revenues for this segment and the company as a whole, Kinko's chief
executive officer and president faced a momentous decision: Should he radically overhaul the
retail business, or should he shift resources to Kinko's healthier commercial business,
‘harvesting’ the retail business for short-term profit?
Case: Atlas Electrica: International Strategy
Authors: Porter, Michael E.; Condo, Arturo
Publisher: Harvard Business School
Publication Date: 2003
Reference: 9-704-435
Abstract: Atlas must decide whether to acquire La Indeca, increasing its Central American
presence, or to focus on larger Latin American markets where higher growth is possible. In the
year 2000, Jorge Rodriguez was in charge of Atlas Electrica, the largest home appliance firm in
Central America. Although it had almost doubled its sales in the 1990s, by the end of the decade
Atlas was experiencing a declining market share in its home region and facing increasing
competition from outside the region, especially from Mexican and Korean multinationals. At the
time, Atlas' main competitor in Central America, El Salvador-based Indeca, was up for sale. Atlas
Electrica, based in Costa Rica, served more than a dozen Latin American countries. Since its
establishment in 1961, it had served Central American markets with different types of home
appliances, later focusing on white-goods for middle-income segments of Central American
consumers. In the mid-1990s, through a strategic alliance with Sweden's AG Electrolux, Atlas
had expanded to Latin American markets beyond Central America.
Case: BP and the Consolidation of the Oil Industry--1998-2002
Reinhardt, Forest; Casadesus - Masanell, Ramon; Hanson, David J.; Hanson, David J.
Publisher: Harvard Business School
Publication Date: 2002
Reference Number: 9-702-012
Abstract: Examines the economics of the oil and gas industry with a focus on 1998 through
2001. Discusses the rationale behind using a growth in scale as a means to increase profitability
and to gain competitive advantage. Also examines the classic strategic implications of vertical
integration and questions the necessity of remaining vertically integrated in today's markets.
During 1998-2001, the industry structure changed dramatically with the occurrence of a wave of
merger activity. Set at the end of 2001, as BP's chief executive, Lord John Browne, ponders the
company's future. BP set off the merger activity in 1998 with its combination with Amoco. Other
major oil concerns quickly followed suit. Several large and dominant firms, termed
"supermajors," separated themselves from the rest of the competitors. Although a large number
of independent specialty firms also exist, the supermajor firms no longer believe them to be
direct competitors. After the case discussion, students should be able to: 1) understand the basic
economics of the oil and gas industry, 2) analyze the rationale behind vertical integration
strategies, 3) analyze why the industry restructuring occurred, and 4) understand the economies
of scale of the supermajor firms as well as the potential problems their immense size could
create.
Case: Sendwine.com
Author(s): Eisenmann, Thomas; Ess, Charmaine; O’Hara, Ann
Publisher: Harvard Business School
Publication Date: 1999
Reference: 9-800-211
Abstract: Sendwine.com, an online retailer of premium gifts of wine by the bottle, faced
decisions about its growth strategy in mid-1999. Mike Lannon, president and founder, had
established his company as a prominent player in an increasingly crowded field. But with
success came a difficult choice: How should Sendwine.com spend the venture capital money it
subsequently had attracted? Should the company consolidate its niche position in wine
gift-giving? Or should it aggressively expand into new gift-giving categories under the
"Send.com" name?
