Deal with the hands-on management of a difficult situation, the subsidiary of a multinational corporation (Tetra Pak) in a developing country (Argentina). The situation arises from a large economic, social and institutional collapse that threatened the existence of the subsidiary. Argentina default on sovereign debt crisis and the peso depreciated by over 200%, but it differentiates the treatment of FX transactions are applied at different rates, depending on the jurisdiction of the creditors and … Read more »

Deal with the hands-on management of a difficult situation, the subsidiary of a multinational corporation (Tetra Pak) in a developing country (Argentina). The situation arises from a large economic, social and institutional collapse that threatened the existence of the subsidiary. Argentina default on sovereign debt crisis and the peso depreciated by over 200%, but it differentiates the treatment of FX transactions are applied at different rates, depending on the jurisdiction of creditors and debtors. Local dollar-denominated loans and liabilities were converted on a 1:1.40 ratio, while commitments with foreign companies continue to be held enforceable at the new rate of 1:3. The crisis led to the impoverishment of a large part of the Argentine population, and to an institutional collapse, where the law of the country was shaken to face challenges related not only to the current situation, but also to the future of the company. The crisis contributed consequences for Tetra Pak Argentina at both ends of the value chain, with suppliers and customers. Tetra Pak continues to grow in developing countries where it feels there is room for a valuable business, and it achieved a leading market position. Shows how the foreign company must be difficult home situations where the levers of control are to cope outside its reach. The existence of the value after the crisis turns out to be a relevant consideration. His
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from
Tarun Khanna,
Krishna G. Palepu,
Gustavo A. Herrero
Source: Harvard Business School
17 pages.
Release Date: 6 September 2007. Prod #: 708 402 PDF-ENG
Tetra Pak Argentina HBR case solution

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