Submitted by: Submitted by sreiners
Views: 154
Words: 1711
Pages: 7
Category: Business and Industry
Date Submitted: 12/11/2013 04:28 PM
Date: March 9, 2013
To: Delta Senior Management
From: Sadie Reiners
I want to thank you for the opportunity to evaluate Blue Ridge Restaurant’s (“Blue Ridge”) joint venture (“JV”) with Terralumen. I truly appreciate your request that I be as open as possible in my response. In my 30 plus years in the industry, I have found that with time I have become much more objective in my client response which is why I am quite often engaged to evaluate adversarial or acute situations and to recommend action plans accordingly. I will start this particular assignment by outlining both the events and overlying issues that have led to the JV partners current impasse. As a reference tool as you read the next several paragraphs, I have summarized some company detail on the three firms involved in Exhibit A.
The issues with the JV start with disjointed growth expectations. BR and Terralumen agreed to a five year plan that would increase the number of stores in Spain from 12 to 80 in five years but a report prepared by an American consulting firm engaged by Delta stated that the JV could add 170 additional stores. Delta used its first attended JV board meeting to announce its discontent with the earlier agreed upon store expansion plan. This is the first two mistakes made by Delta. Why I ask would Delta engage a consultant without the knowledge or support of the two key principals, Blue Ridge and Terralumen and secondly, why would Delta have its new VP, Sodergran, on his first day on the job deliver this message to the joint venture board without having built a rapport and a level of trust with Costas, Blue Ridge’s European manager, and the Terralumen board members.
Although the growth rate expectation differences served to ignite the impasse, the fuel came from the following:
• Differences in culture between Blue Ridge and Delta and unsatisfactory integration
- Team vs individual results
• Differences in international corporate strategies
- Joint...