Charles River Lab Case
As a global market leader, Charles River Laboratories (CRL) is considering a joint venture with ALPES, a family-owned franchise and sole producer of specific pathogen-free (SPF) eggs in Mexico. Charles River Lab is serving over 15 countries worldwide with production and supply of laboratory animal models for research, development and testing of new pharmaceuticals. With the increasing demand of SPF eggs worldwide, Dennis Shaughnessy can easily envision the long-term growth of CRL and profitable opportunity with the joint venture. However, Jim Foster, Chief Executive Officer of CRL and the board members have to consider this proposal as a growth opportunity that could easily be available to their competitors in the market.
Analysis
Charles River Laboratories had a strategic growth objective of 12 per cent to 15 per cent annually and its entire business …show more content…
As ALPES is major supplier to INTERVET, a Netherlands based world largest poultry vaccine manufacturer purchases 80 per cent of SPF eggs from ALPES. INTERVET also projected double demand of SPF eggs to four million units within one year. Furthermore, the changes in European and Asian vaccine regulations points to an increase in demand of SPF eggs in Mexico more than 10 million units per year. With more than 1 billion in revenues and operations in 55 countries, INTERVET is a major customer for SPF eggs. Another Mexican subsidiary to Boehringer Ingelheim of Germany was responsible for most of the remaining ALPES sales. Both companies invested millions of dollars in Mexico establishing new plants for the increase demand of vaccine in Europe and Asia. However, due to the increasing demand, both companies began importing SPF eggs from the United Sates. CRL has to realize the long-term growth opportunity and strategically position themselves with the given opportunity of the Joint
Analysis
Charles River Laboratories had a strategic growth objective of 12 per cent to 15 per cent annually and its entire business …show more content…
As ALPES is major supplier to INTERVET, a Netherlands based world largest poultry vaccine manufacturer purchases 80 per cent of SPF eggs from ALPES. INTERVET also projected double demand of SPF eggs to four million units within one year. Furthermore, the changes in European and Asian vaccine regulations points to an increase in demand of SPF eggs in Mexico more than 10 million units per year. With more than 1 billion in revenues and operations in 55 countries, INTERVET is a major customer for SPF eggs. Another Mexican subsidiary to Boehringer Ingelheim of Germany was responsible for most of the remaining ALPES sales. Both companies invested millions of dollars in Mexico establishing new plants for the increase demand of vaccine in Europe and Asia. However, due to the increasing demand, both companies began importing SPF eggs from the United Sates. CRL has to realize the long-term growth opportunity and strategically position themselves with the given opportunity of the Joint