The Break-Up of the RPG-DFI Joint Venture
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Case Code: BSTR229 Case Length: 15 Pages Period: 1999-2006 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.300 Organization: RPG, Dairy Farm International Industry: Retail Countries: India Themes: Mergers, Acquisitions, Strategic Alliances |
Abstract Case Intro 1 Case Intro 2 Excerpts
"RPG Retail is now poised to give shape to its integrated retail business."
- Sanjiv Goenka, vice chairman, RPG Enterprises, commenting on the future of the company's retail business after its split with Dairy Farm International in 2005.
Introduction
RPG Enterprises (RPG), one of the largest diversified conglomerates in India, was also one of the pioneers of organized retailing in the country. RPG set up the FoodWorld (FW) chain of supermarkets in the early 1990s when organized retailing was at a nascent stage in India. The FW outlets sold food and grocery items in clean and air-conditioned stores and provided a quality shopping experience to customers.
At that time, the concept of supermarkets had yet to catch on in India, and the FW outlets were very different from the small and often unattractive neighborhood grocery stores where Indian families had been shopping for decades. After a while, the FW supermarkets, with their wide range of products and good ambience, became popular with shoppers.
In 1999, RPG entered into a joint venture with Hong-Kong based retailing giant, Dairy Farm International (DFI), to extend the operations of FW supermarkets. However, within a year of the joint venture being formed, there were reports of dissonance between the partners. Finally, in May 2005, RPG and DFI parted ways, citing issues of control over the joint venture as the reason for this.....
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