Case Analysis Raisio Group And The Benecol Launch A

1. Problem Originated from a grain-milling company in Finland, the 57-year-old Rasio Group developed a substantial export business which accounted for 39% of its sales by 1996. Its main products including margarine, pasta and other food products were manufactured, sold locally and exported. In 1995, a blockbuster product Benecol, cholesterol-lowering margarine, attracted the interest of food processors and supermarket groups throughout the world and fueled a surge of investor interest. Stanol ester is the active ingredient that provides the lower cholesterol benefit. There was huge marketing potential and profit opportunity for Raisio. However, its limited production capacity, limited supply of stanol ester, few facilities, limited experience outside Finland, different product formulation requirements, different marketing channels and complicated regulations in different countries challenged its further strategy.
2. Analysis and assessment of strategy to date for commercializing the innovations A largely self-sufficient strategy/a strategy of vertical integration: Raisio had fabricated stanol ester itself in its own plant using its own technology. Its stanol ester was used only in its own branded margarine, Benecol, which was produced in its own factories and marketed and distributed through its own sales and distribution system. This strategy enabled Raisio to have control over the technology, reduce transactions costs of market contracts and maintain superior coordination through the value chain, but it failed in meeting market demand home and broad due to limited production capacity and limited supply of raw material. Besides the demand, it would take a long time for Benecol to fully market in other countries. That would be risky, as it only had 18- to 24-month lead time over its competitors. It's impossible to open all markets by acquisition which entails