Case Study

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Date Submitted: 11/18/2012 08:34 AM

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Raisio Group and the Benecol Launch

The Raisio Group launched an innovative new product named Benecol that utilized an active ingredient of stanol ester. As the founder of stanol ester, Raisio faced a challenge whether to sell the ingredient or retain the ingredient for sole use in its product Benecol. The product Benecol offered consumers a health benefit of a cholesterol reducing ingredient. In Finland and Europe, the product’s demand was high and Raisio was having difficulty meeting the supply to the demand. Raisio faced other issues with competitors entering the market and identified a partnership with Johnson and Johnson to secure a global market presence (Grant, 2010b).

Synopsis of Case

The Raisio Group which was once a grain-milling company began manufacturing vegetable oil in 1950. The company expanded in 1987 to include cereals, vegetable oil, animal feeds, malt production, potato starch, and margarine. Raisio built its own margarine plant to stimulate the demand for its own brand of rapeseed oil. A patent application was filed by the R&D manager in 1991 for the research Raisio performed in turning plant sterol into fat soluble stanol ester for the use in food production. In 1996, the Raisio group launched the Benecol product which was marketed as a cholesterol reducing margarine. This was the beginning of the intensive research performed by Raisio to offer cholesterol reducing affects within food products. The Raisio group then entered an agreement with Johnson & Johnson to globally market the stanol ester ingredient within other food products (Grant, 2010b).

Relevant Factual Information about the Problems or Decisions the Organizations Face

The Raisio Benecol product launched in 1996 and despite the elevated price the demand was high. Raisio had to ration the product to meet supply and demand. The main issue with the shortage of supply was the limit of plant sterols which is used to produce the active ingredient in Benecol...