The case “Peru’s Aje Group: Successfully Competing With the Global Cola Giants?” talks about the successful journey of the AJE Group (Aje) from its humble beginnings in Peru to becoming one of the most prominent multinational beverage companies In the world. The case starts out by providing details about Aje’s early days and the factors that helped it become a force to be reckoned with in the Latin American beverage market. The company’s targeting of the Bottom of the Pyramid (BoP) segment with a range of beverages that were priced 20-30% lower than the competition and distributed through a unique mechanism was the basis for its market success. The case then documents Aje’s attempt to further its internationalization strategy by making a foray into an unknown territory for a Peruvian company – Asia. The company’s eventual success in Asia is described, along with the reasons behind it. The case then documents the company’s foray into the African continent by setting up a subsidiary in Nigeria. Aje considered itself to be a global company without a significant presence in the Western markets, believing that the emerging markets of Latin America, Asia, and Africa were where the actual market potential lay. Can Aje continue growing in the beverage industry and one day emerge as a serious threat to the Cola giants – Pepsi and Coca-Cola?
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Issues
The case is structured to achieve the following teaching objectives:
Understand the challenges Latin American companies face during the process of globalization.
Analyze the international expansion strategy undertaken by a company that was a strong market player in its home market.
Scrutinize the product diversification strategies of a company.
Comprehend the nuances of an effective pricing strategy in creating a market position in emerging nations.
Appreciate the business potential at the ‘Bottom of the Pyramid’
Recognize the impact of sports sponsorship on brand equity.
Appreciate the importance of an effective global distribution strategy.
Design an ingenious competitive strategy for a challenger company against multinational companies.
Strategic Direction; Product Diversification; International Business; Product Strategy; Family Business Leadership; Business Environment; Target Marketing; Bottom of the Pyramid; Pricing Strategy; Distribution Strategy; International Market Entry Strategy; Latin America; Global Brand; Sports Sponsorship; Competitive Strategy
