IB Case Study
Lenta of St. Petersburg Study Questions
There is only one question for this case: where should Oleg lead Lenta? There are five options. Pick one of the five and justify why it is the best alternative: (IB Case Study)
- Slow down/stop growth and consolidate Lenta’s position in the St. Petersburg market.
- Grow, but only in St. Petersburg.
- Grow, by entering the nearest cities surrounding St. Petersburg.
- Grow, and especially target the largest and wealthiest city in Russia: Moscow.
- Grow, and especially target large but underdeveloped cities in southern Russia or western Siberia.
It’s a good idea to consider all aspects of the business: marketing, operations, finance, human resources, and strategy. Remember to be specific and use numbers/data to support your statements.
Title: IB case study
Oleg should first have Lenta slow growth and strengthen its position in St. Petersburg City market. This is because there are still huge unexploited opportunities in St. Petersburg City and the company is more familiar with City’s dynamics. The relatively unstable financial base of the company also makes its unqualified to venture into other cities’ market. It only after Lenta has substantively solidified its financial status that it should consider penetrating Moscow City’s market, and other underdeveloped cities in Southern Russia or Western Siberia.
It is important to point out that when expanding into Moscow City’s market, Lenta should go for high end shopping regions, and not undeveloped regions as it may have focused in St. Petersburg City. What is more, the firm should look for local funding alternatives, so as to reduce risks associated with foreign exchange rate risks.
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