Case Study Global Product Roll Out

1. What is required for global product roll-out, including who expends which capital , takes which risk and reaps which reward ?
Benecol could be claimed as an important nutritional innovation in the world. It is a unique compound composed of plant stanol esters, which have scientifically proven to help lower cholesterol in humans. High cholesterol is one of the major issues affecting a large number of people, heart diseases and mortality associated with high cholesterol is also high. This is why Raisio, the proud owner of this product (a Finish grain and chemical company) wanted to go global. Bringing Benecol, Raisio’s unique product with enormous market potential to the global market was time sensitive to reap the first movers advantage.

To address this a panel was formed consisting of executives from Nestle, Craft and Heinz etc. to provide valuable insight into food products. Their strategy focused on international licensing for which they needed a global partner for market penetration. Johnson & Johnson was this partner. The input of capital was geared towards keeping supply constant as the control of stanol ester production would be maintained by Raisio. To increase the production, they built more production facility in Finland and also went into join venture with companies in France, Chile and US. Johnson & Johnson using their McNeil production group proposed production, promotion and distribution strategy. McNeil would purchase stanol ester exclusively from Raisio, make products then promote and send these to the market. They budgeted over $80million for promotional expenses. Their agreement covered 2 other item concerning payments that would be made to Raisio. Raisio would receive loyalties on the sales

They didn’t want to lose out on any profits by going global. Since they were new to this line of business they partner with J&J’s McNeil division. J&J were an excellent choice to partner with to introduce Benecol to the global market. The only hurdles stopping Benecol to be introduced into the world were regulatory issues. It would be difficult to bring Benecol to the market as quickly as possible in Europe and even more so in US. The strategy McNeil chose was to introduce Benecol as a dietary supplement which was the fastest route to the market, but the FSA didn’t approve of it. Qualifying it as a pharmaceutical would have yielded larger value margins as Benecol was shown to have as much, if not more efficacy than the cholesterol reducing drugs in the market. This could however take more time but could be the path they choose for