Case Study 01
Blendtec Goes Global … Again
Harvey Scott, vice president of international development, was in charge of Blendtec’s global expansion effort. He and his team had been gathering data and meeting with international partners and contacts for months to help determine which global markets to enter, when to enter them, and how. Scott had to decide how to leverage Blendtec’s existing network of international partners and distribution channels, or whether to scrap them and start over. He understood that in many international markets, if Blendtec didn’t get things right, it wouldn’t get a second chance.
Blendtec began in 1975 when founder Tom Dickson created a revolutionary wheat mill. Dickson next turned his attention to commercial kitchen appliances, and his blenders were an unqualified success, reducing average blending times from around fifty seconds to just thirteen.
Product performance made Blendtec the primary appliance supplier to big-name companies like Starbucks and Jamba Juice. The company also partnered with Costco to sell Blendtec blenders directly to consumers. These relationships initially stayed domestic, and Blendtec was positioned to service a predominantly U.S. market. Starbucks and Costco, however, had plans for global expansion.
Going Global When Starbucks and Costco moved international in the early 1990s, Blendtec wasn’t an international company, so it had no network in place to provide service and support to its big customers. It promised to build a global supply and support network, but it faced new and different problems in each market, which required additional innovation. For example, in Australia, the power grid could fluctuate widely in terms of voltage. Most U.S. appliances would burn up under that kind of power variation. Blendtec had to find a partner to explain how to build a power regulation system that would protect appliances from those fluctuations.
Mixing Things Up After a few years abroad, the company wanted to enter other foreign markets using a more strategic focus, not just in reaction to customers’ demands. To ensure its future, Harvey Scott needed to determine Blendtec’s strategy. Future growth depended on his decision, and he wouldn’t get a second chance to make a first impression on new markets and consumers.
Case Discussion Questions
1. Which markets are most likely to be most receptive to a greater presence from Blendtec? Why? What differentiates those markets from other markets?
2. Should Blendtec sell to local retail stores or rely on global retailers such as Costco?
3. Should Blendtec set up production facilities in foreign countries? For example, would it be better to manufacture units in Brazil for that market or better to ship product there and pay applicable import tariffs? Does that determination vary from market to market?
