978-0078028946 Chapter 10 Case

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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?