Diversification Strategies Case Study

Indian Soft Drink: Concentrate Major Rasna Diversifies into Fast Food Retailing: Will it Payoff?

OR

Abstract:
The INR 30billion (approximately $683 million) Indian soft drink concentrate (SDC) major, Pioma Industries' brand Rasna had been a market leader, with 93% share in the Indian SDC market in 2007. Besides SDC and fruit syrups, the company also expanded its product base and portfolio by including ethnic instant curry bases, pickles, chutneys (spicy condiments) and a snack range. The changing lifestyles, increase in consumer spending on food and the onset of modern retailing formats also offered excellent growth opportunities in the food retail segment coming from ready-to-eat foods. Looking at these opportunities, the company launched its Devil's Workshop, a related diversification into fast food retailing. The case facilitates discussion on whether the success of a flagship brand could be leveraged on a related diversification or not.

Pedagogical Objectives:

• To diversification, diversification strategies and the dimensions of related diversification
• To changes in Indian consumer lifestyles leading to newer business opportunities
• To the diversification strategy of Rasna.

Keywords : Pioma Industries; Rasna; Devil's Workshop; Diversification; Related diversification; Soft drink concentrate market; Fast food retailing; Consumer lifestyles; Social trends; Newer business opportunities; Modern retailing formats; Franchisee; Kiosks; McDonald's; Pizza Hut