Topic > Case Study Blue Ridge Spain - 1769

BR was sold to Delta Foods in 1996 for $2 billion. At the time, it was one of the largest fast food chains in the world, with sales of $6.8 billion. The purchase of BR by DF introduced a new cultural paradigm. DF is an aggressively growing, individualistic company with brands that it believes are strong enough to support entry into new foreign markets without the need for local partnerships. DF's strategy is that of direct acquisition and JVs were not part of their strong point. The strategic implementation of DF is based on the direct hiring of local managers or the transfer of experienced managers from their soft drinks and snacks divisions. The DF's disdain for JVs is clearly reflected in their participation only in those JVs where local partnership was mandatory (e.g. in China) to overcome regulatory barriers to entry. JVs had been the predominant strategy for BR, unlike DF prospects. Terralumen's strategy was misaligned and out of sync with the DF strategy. This was different from the complementarity that existed with the BR strategy. This misalignment began to affect the joint venture relationship that had worked well with BR in the early years. The failure of Terralumen and DF to recognize this fundamental cultural difference between their operational strategy styles, namely Individualism and Collectivism, leads to their inability to proactively create steps for better alignment in the early post-acquisition period, creating uncertainties and difficulties for both companies. There is a lack of communication and virtually no trust between the two new partners. DF seemed to flex his muscles in the relationship and use a more masculine approach compared to Terralumen's more feminine one. Both companies are strategically involved in a complex situation in which they appear reluctant to address the issues at stake and move forward together. The DF strategy of