Arcor Case.

In: Business and Management

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Words 15266
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For the exclusive use of Y. Likaku, 2015.

9-704-427
REV: NOVEMBER 29, 2005

PANKAJ GHEMAWAT
MICHAEL G. RUKSTAD
JENNIFER L. ILLES

Arcor: Global Strategy and Local Turbulence
These last few years have been spent constructing a Latin American Arcor. In the next five years, we are going to have a global Arcor.
— Luis Pagani, President, Arcor Group
In May 2003, Argentina was slowly beginning to emerge from the country’s most devastating financial crisis. Half a year earlier, the crisis had peaked: the peso had devalued by 70%, the government had ordered a freeze on all bank withdrawals, and many local companies had fallen into financial default. In the wake of the disaster, Luis Pagani, president of Arcor Group, Latin America’s leading candy and chocolate manufacturer, was one of the few Argentine entrepreneurs remaining whose company was still financially stable. However, the crisis was taking its toll on even the most successful and healthy corporations.
The crisis happened to hit Arcor at a critical time in the unfolding of its long-term strategic plans.
Pagani had worked hard to make Arcor a dominant player in the Latin American confectionery market and had recently laid out plans to increase its presence in other regions. By 1999, he was ready to implement his strategy and was eager to work toward competing on the level of other multinational manufacturers, such as Mars, Nestlé, Kraft, Hershey, and Cadbury Schweppes.
However, Arcor’s response to the domestic crisis had drained his focus and resources and forced him to put all expansion efforts on pause. Surveying the ruin around him and looking at the business his family had built up over three generations, Pagani thought hard about what to do with Arcor, both at home and abroad.

The Confectionery Industry
The confectionery industry comprised sugar confectionery (candy) and chocolate…...

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