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J.F. Lurton : A French company in Argentina

Antonio Ferreira Neto Pierre Thabault José Besnier Tim McGarr. J.F. Lurton : A French company in Argentina. Best in France Case Study 24 December 2003 . J F Lurton. J F Lurton was set up in 1998. J F Lurton produces and sells a global range of wines. Turnover: 15,226,536 Euros (2002)

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J.F. Lurton : A French company in Argentina

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  1. Antonio Ferreira Neto Pierre Thabault José Besnier Tim McGarr J.F. Lurton:A French company in Argentina Best in France Case Study 24 December 2003

  2. J F Lurton • J F Lurton was set up in 1998. • J F Lurton produces and sells a global range of wines. • Turnover: 15,226,536 Euros (2002) • Profit: 29,886 Euros (2002) • Direct employees: 32

  3. Why J.F. Lurton went to Argentina • J F Lurton’s approach is to own vinyards in all the countries it opperates in. • As part of this strategy J F Lurton own Vinyards in: Argentina, France, Spain, Australia, Chile and Uruguay. • In Argentina, J F Lurton purchased 225 hectares of vinyards and planted another 125 hectares.

  4. Company values • What are the core values of the company that may or may not fit with preceived Argentinian values? Values that fit: Firm’s loyalty (argentinian workers are loyal supporters of the “company team”). Values that do not fit: Punctuallity (argentinian society does not care too much about it). • How did company manage to instill its values in the Argentinian unit? By exporting our production method and training local people. Expatriated Executives perform an outstanding role in this subject.

  5. Company Products • What products are produced in Argentina? Wines Bonarda, Cabernet Sauvignon, Malbec, Chardonnay, Chenin Blanc, Pinot Gris, Torrontes and Rosado. • Why are these products produced in Argentina (and not elsewhere for example)? We set out the basis that it possible to make goods wine anywhere vines grow under normal conditions. And Argentina gather all the ideal conditions for produce high quality wines, as soil, climate, water and without any input of chemicals.

  6. Company Products • Are there expansion/reduction plans for these product lines? Currently we are working in the direction that our products gain the maturity to become first quality wines. We have already realized efforts to expand our product lines by acquiring wineyards in Argentina, Chile and Uruguay in Latin America.

  7. Company's clients • Who are the company's clients? Different traders from Japan, USA, UK, Canada, Ireland, Spain and other countries all around the world. • What are their expectations? Have first quality products for highly demaning local markets, at competitive prices.

  8. Company's clients • How will a French presence help or hurt the company's ability to satisfy client demands? Belong to a French wine company is useful to open markets, and gives a brand name to our products worlwide. Additionally, the knowledge curve in France for wine production gives another strengths on this market.

  9. Constraints in Argentina • What are the principle constraints that the company foresaw before going to Argentina? The principal constraint we have foresawed in Argentina is the low developed financial market. • Did they discover any others? The burocracy involved in each entrepreneurial effort. Argentina is characterized for has a large state, which does not care much on efficiency.

  10. Constraints in Argentina • How do these constraints differ with their other locations? In the different locations of our units some constraints change, depending on the local culture and degree of development. But, most of them are the same in all countries (i.e. finding qualificated people, etc).

  11. Adaptation to Argentina • What kinds of adaptations did/is the company making to its people management systems? • Recruitment/Selection : We have recruited people with experience in the latin wine market. Specially in high management level. • International Transfers, Use of Expatriats: We have establish strong connection links between France and foreign filiate units, by transfering French Executives.

  12. Adaptation to Argentina • What kinds of adaptations did/is the company making to its people management systems? • Training: We have carried on trainning programs oriented to export our production model.

  13. Key Constraint Costs • What are the key costs to going to Argentina that are more or less than operating in other locations? • Less cost: Any human resources type costs (as compensation packages, hiring, training and dismissing). • Less cost: Terroirs, real estate, travels and taxes. • Communication constraints: Language and infrastructure.

  14. Key Constraint Costs • What are the key costs to going to Argentina that are more or less than operating in other locations? • Integration: The integration of French managers into local organisation did not cost more than use local managers because we have selected people with local experience. • Financial Market: Undeveloped, in process of recovering after Argentinian Crisis.

  15. Key Benefit Numbers • What are the key benefits of being in Argentina? • Product of very good quality at lower cost. • Higher profit per unit of terroir. • Growth potential in undeveloped markets. • Launch platform for export to other countries.

  16. Essential Advice • What advice do you offer to other french companies in this sector concerning use of Argentina as a location? Profit from local producers experience. Argentina has very good conditions to produce high quality wines if you know how. Thus, try to establish joint ventures and be prepared to face an undeveloped financial market.

  17. We Thank • Manager 1: Andrés Heiremans HEC MBA 2002, Director. Adress: Esteban Echeverría 1744 (5501) Godoy Cruz, Mendoza, Argentina, aheiremans@bodegalurton.com, Tel: 54 261 4248400

  18. Bibliography • Company Report year 2002, non consolidated. • Liberty and development Institute (Chile), Programs, Argentinian Papers, 2002. • Pyme Journal (Argentina), “Better locations to do business”, 2003. • CenterGroup (Brasil), “Como Facer Negocios com Argentina”, 2002.

  19. Our Team • Antonio Ferreira Neto, Chambre No. 14, Résidence Expansiel, 1, rue de la Libération, Jouy-en-Josas, 78350, France. • Pierre Thabault, Chambre No. 122, Résidence Expansiel, 1, rue de la Libération, Jouy-en-Josas, 78350, France. • José Besnier, Chambre No. 11, Résidence Expansiel, 1, rue de la Libération, Jouy-en-Josas, 78350, France. • Tim McGarr, Chambre No. 10, Résidence Expansiel, 1, rue de la Libération, Jouy-en-Josas, 78350, France.

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