How can a local company face the competition of a multinational company? Industrias Ramo vs. Bimbo de Colombia

• Main Authors: Juan José Lombana Roa, Aida Ximena León Guatame
• Format: Article
• Language: English
• Published: Universidad de Chile 2020-05-01
• Series: Estudios de Administración
• Online Access: https://estudiosdeadministracion.uchile.cl/index.php/EDA/article/view/56968
• ISSN: 0717-0653; 0719-0816

The company Productos Ramo S.A.S. «Simplified Joint-Stock Company», leader in the pastry and bakery sector in Colombia since 1956 and with special emphasis on the city of Bogotá, had competed in a relatively stable environment for many years, with no major competitors until 1995, when the Mexican multinational Bimbo de Colombia S.A. enters the market. This company started its operation generating a differentiation in the market by positioning as premium brand in the bread product line. Additionally, it launched a broad portfolio of products and through an efficient distribution process, managed to permanently alter this market, obtaining a growth in an accelerated way, coming to assume the leadership of it. For the year 2006, Bimbo de Colombia recorded more sales or income than Productos Ramo, with a difference of 7 percent and for 2018, the difference in revenue was 45 percent more (while Productos Ramo sold US $247 million, Bimbo sold US $ 360 million in Colombia). In such a situation, the General Manager of Productos Ramo wondered: What strategy should he implement in order to face Bimbo and regain its leadership in the Colombian market? The case is divided into four parts, which are: first part of the case, the history of the company Productos Ramo S.A.S. is presented; second part, it addresses the entry of Bimbo into the Colombian market; third part presents the response or reaction of Productos Ramo to the entry of this new competitor and fourth part, which raises some strategic concerns about the future for Productos Ramo company.