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Case from journal
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Reference no. NAC1901
Published by: NACRA - North American Case Research Association
Published in: "The Case Research Journal", 1999
Length: 21 pages
Data source: Field research

Abstract

Alcoholes de Centroamerica (ALDECA) is a family-owned firm operated by Sr Emin Barjum and his son Tony in Tegucigalpa, Honduras. In August 1995, ALDECA held nearly 50 percent of the Honduran market for aguardiente, a clear, very strong liquor favored by workingmen, but the Barjums faced several important decisions. First, a Guatemalan conglomerate had recently begun test marketing several aguardiente brands in preparation for an aggressive entry into the Honduran market. How should ALDECA respond to this new competition from outside the country? Second, eighteen months earlier another Honduran distillery, owned by a Nicaraguan conglomerate, had approached ALDECA seeking a merger, and they wanted an answer. The merged company would offer ALDECA more capacity and possibly lower production costs, but would give Sr Barjum less control over strategic direction. Further, Honduran preferences were shifting, albeit slowly, from hard liquors like aguardiente to softer wines and beers.

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Abstract

Alcoholes de Centroamerica (ALDECA) is a family-owned firm operated by Sr Emin Barjum and his son Tony in Tegucigalpa, Honduras. In August 1995, ALDECA held nearly 50 percent of the Honduran market for aguardiente, a clear, very strong liquor favored by workingmen, but the Barjums faced several important decisions. First, a Guatemalan conglomerate had recently begun test marketing several aguardiente brands in preparation for an aggressive entry into the Honduran market. How should ALDECA respond to this new competition from outside the country? Second, eighteen months earlier another Honduran distillery, owned by a Nicaraguan conglomerate, had approached ALDECA seeking a merger, and they wanted an answer. The merged company would offer ALDECA more capacity and possibly lower production costs, but would give Sr Barjum less control over strategic direction. Further, Honduran preferences were shifting, albeit slowly, from hard liquors like aguardiente to softer wines and beers.

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