Disco Supermercado

Salient Problem:

Disco requires development of a marketing strategy to determine the next step when considering growth of the Disco supermarket chain. Consequently a decision needs to be made as to whether to reinforce existing operations in Argentina and Uruguay where the company already has an established foothold. Or whether to expand regionally and if so through which mode, possibilities exist in the form of an acquisition of Santa Isabel or a joint venture with Royal Ahold.

Recommendation:

Disco is recommended to concentrate on operations within Argentina and Uruguay through the joint venture with Ahold. The stable economy, increasing population and increasing GDP in Latin America make the continent an attractive expansion destination for foreign investment. With Argentina being one of the more attractive destinations within the continent Disco should anticipate imminent competition from rival international supermarket chains. Therefore, an alliance with a multinational corporation such as Ahold will provide protection from such competitors through the greater resources available.