Alpes Case Analysis
ALPES S.A.: A Joint Venture ProposalGroup 2Sindi Mucollari Santina LippaAnwar AlfadliDafang DongDana Kulia04-75-498-01Dr.LeeNovember 2, 2015Key Issues CRL must determine whether it is a beneficial strategic move to enter into a Mexican joint venture with ALPES given the significant uncertainties of operating in a foreign country. CRL must weigh out the risks of investing in a country like Mexico, where there is a very uncertain market and the country is plagued with endemic corruption and economic instability. CRL must ultimately determine if agreeing to a joint venture with ALPES will exploit opportunities in Mexico and offer attractive financial returns for both partners.Internal AnalysisTHE VRINE MODEL (See Exhibit I)Value – The Joint Venture between ALPES and CRL is valuable as demonstrated by the following resources and capabilities; The beneficial combination of CRL and ALPES with regards to ALPES’S existing assets and ALPES’s exclusive customer base paired with CRL’s presence as an industry leader. The JV would create a valuable entity between CRL and ALPES by increasing the production and sanitation for Alpes at a low-cost high-reward benefit for CRL.  ALPES’s current position as a major supplier to Intervet and Anchor, as well as the formal management strategies for CRL create increased value for the JV.
Rarity – ALPES’s exclusive distribution, as well as being the exclusive importer for SPAFAS eggs in Mexico creates a rare position for ALPES in the Mexican market that can be further enhanced through CRL’s injection of funds. CRL’s unique growth strategy, as an industry leader paired with ALPES’s low-cost infrastructure will create a business organization that is certainly scarce relative to the demand for SPAFAS eggs. This is evident in that ALPES cannot currently meet production demands but with a JV from CRL can move into a unique space to fill the massive demand requirements of the industry.  An additional note is the commitment and integrity of the Mexican culture in business that creates a rare competence not normally seen in U.S. joint ventures.Inimitability/ Non-Substitutability – The pairing of low-cost manufacturers in Mexico and large investment funds in the U.S. can certainly be imitated. However, in the case of this proposed JV, CRL and ALPES will have first mover advantage as CRL being the first firm to take advantage of the Mexican market.  ALPES’s dominant position in Mexico combined with CRL’s position as an industry leader makes the conjunction of these two firms a very difficult entity to imitate (which would unquestionably take competitors serious lag time to accomplish). ALPES’s exclusivity in contracts with suppliers makes them very difficult to imitate or substitute because of the difficulty for competitors to enter the market and provide a product as unique as ALPES does. Another difficulty for competitors to compete with is the existing customer base and loyalty that would be found in the JV. It would take competitors years to build up the assets and reputation in order to substitute or imitate the JV of CRL and ALPES ability. Joint Ventures that are outside of NAFTA (US, Canada, Mexico) would not enjoy free trading at ease of conducting business that the JV of ALPES and CRL would.