Arcor: A Latin American Confectionary Player Is Globalizing Its Business

Arcor: A Latin American confectionary player is globalizing its business

According to this case, Arcor wanted to expand its business outside Latin America; however, it had three major challenges, including becoming the No. 1 Latin American confectionary and chocolate company; continuing to grow and establish itself in high development potential markets outside Latin America; and strengthening product penetration in the most demanding markets in the world.

However, Arcor needs to overcome these obstacles. The first obstacle includes culture and language. As when a product enters into a new market, it needs to know what the culture is and what its customers' preferences are. Moreover, it needs to know whether its enterprises culture matches with new culture in the other countries. The second obstacle is how to set up its price in new market, for the price of a new product might not satisfy with its customers in a new country. The final obstacle is that it needs to know more local laws when it starts to do business in other countries. x

According to the concept of the ' virtual value chain', that is an extension of the conventional value chain, where the information processing itself can create value for customers. Therefore, there are three points to account for this. Firstly, Arcor can reduce costs, which means it can reduce a lot of wasteful steps and activities; then, it can provide low price and high quality products to their customers. Secondly, it needs to offer products and services. Here the focus is on knowing one's customers, and sharing information with partners and suppliers to enhance customer satisfaction. Many service and manufacturing companies focus on building relationships with customers and on demand management as ways of using information. Recently, Arcor has a lot of plants in the world; it needs to offer high quality products and services to attract its customers and clients. Finally, it also needs to invent new products. Arcor Company can use information to innovate - to invent new products, provide different services and use emerging technologies. If a company wants to expand its business market shares and attract more new customers, it has to innovate new products to assist it to access to new market.

Actually, Arcor owns its competitive advantages in the value chain. Firstly, it owns the most advanced chocolate plant. Secondly, it has the largest product distribution center. Thirdly, it owns more than 1500 products, which include foods, confectionary, chocolates, and cookies and crackers. Fourthly, Arcor Group has 35 plants in the region, including 27 in Argentina, 4 in Brazil, 3 in Chile and 1 in Peru. Finally, it becomes a true specialist in everything it produces.