The Break-Up of the RPG-DFI Joint Venture
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Case Details:
Case Code : BSTR229
Case Length : 15 Pages
Period : 1999-2006
Organization : RPG Enterprises And Dairy Farm International
Pub Date : 2006
Teaching Note :Not Available
Countries : India
Industry : Retailing
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"RPG Retail is now poised to give shape to its integrated retail business."
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- Sanjiv Goenka, vice chairman, RPG Enterprises, commenting on the future of the company's retail business after its split with Dairy Farm International in 2005.
Introduction
RPG Enterprises (RPG), one of the largest diversified conglomerates in India, was also one of the pioneers of organized retailing in the country.
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RPG set up the FoodWorld (FW) chain of supermarkets2 in the early 1990s when organized retailing was at a nascent stage in India. The FW outlets sold food and grocery items in clean and air-conditioned stores and provided a quality shopping experience to customers.
At that time, the concept of supermarkets had yet to catch on in India, and the FW outlets were very different from the small and often unattractive neighborhood grocery stores where Indian families had been shopping for decades.
After a while, the FW supermarkets, with their wide range of products and good ambience, became popular with shoppers.
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In 1999, RPG entered into a joint venture with Hong-Kong based retailing giant, Dairy Farm International (DFI), to extend the operations of FW supermarkets. However, within a year of the joint venture being formed, there were reports of dissonance between the partners. Finally, in May 2005, RPG and DFI parted ways, citing issues of control over the joint venture as the reason for this.
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Background-RPG
In the 1820s, Ram Dutt Goenka, a businessman from Rajasthan, traveled to Kolkata in search of new business opportunities. In Kolkata, he entered into business with the East India Company.3
As the business grew, more people from the Goenka family joined him. Over the years, the Goenka family business diversified into various fields such as textiles, jute, tea, and banking.
RPG Enterprises was incorporated in 1979 by Rama Prasad Goenka4 to consolidate the family's diversified business interests under one company. |
The Break-Up of the RPG-DFI Joint Venture
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