A Tale of Two Empires
This case is an example of a Singaporean company attempting to establish an international presence in an emerging economy, Russia. It discusses the decision points faced by Sudeep Nair, executive director of Food Empire Holdings Ltd, in the aftermath of the Asian economic crisis in 1998 and also the Russian crisis where the country’s economy is facing a treasury loan default, a marked devaluation of the ruble, lower GDP, and a loss in foreign direct investment. In addition, the new democracy is struggling. Nair needs to consider if the economy will recover, if a new middle-class segment will emerge and, most urgently, if the initial success of the product, MacCoffee, can continue. The questions facing Nair and his team are not only how to operate under these conditions, but also if Food Empire should continue to operate in Russia.
The case can be used to depict a Singapore company trying to expand internationally, and to help the student understand the commitment, operations, and decisions required in such a situation in general, and in emerging and volatile economic environments in particular.
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