Blue Ridge Spain

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WEEK 4 / ASSIGNMENT 1: Case 2 Brief “Blue Ridge Spain” INTRODUCTION Blue Ridge Restaurants Corporation was founded in Virginia in 1959. The company grew quickly, with over 500 food outlets by 1974. It was sold for $4M in 1974, experienced 96% annual growth from 1975 to 1980, and then sold again for $420M in 1981. In 1983, Blue Ridge started negotiations for a joint venture in Spain. Then, Yannis Costas joined Blue Ridge in 1984, and one year later they signed a JV agreement with Terralumen S.A.. The JV model achieved success and growth through the years, especially during the period of time from 1995 – 1998. Costas played an integral role in driving the JV model’s success, but in January of 2000 he was asked by Sodergran, a Vice President in the role for less than one year with Delta, to dissolve the JV with Terralumen in Spain in two weeks time. After 16 years of perceived success with the JV in Spain, Costas was left in a challenging position. ANALYSIS The “Blue Ridge Spain” case study introduces several individuals and organizations. In order to analyze the situation and provide recommendations, I will specify the main issues from their various perspectives. Delta’s senior managers were not keen on JV’s because they viewed them as time-consuming, and also an inadequate means of developing new markets. Delta was persistent and hungry for growth, owning strong brands that could support expansion into overseas markets without the need for local partners. Rather than form joint ventures, Delta preferred to hire local managers directly, or transfer experienced managers from their other divisions around the world. Blue Ridge was acquired by an international beverages company in 1981. The new ownership was lacking a strategy and showed interest in the JV model. They felt it was beneficial to form joint ventures with local business

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