ARCOR Group’s Internationalization and the ARCOR Foundation in Brazil

This case discusses ARCOR Group’s marketing, manufacturing and social intervention expansion process across national borders. This Argentine company’s path to internationalization has been illustrated by the strategy it pursued in the Brazilian market over the 1990s. As a result, ARCOR successfully took its brands and products to over 100 countries in all five continents. Starting with its first plant in Brazil, set up in 1981, the Group began to manufacture candy locally to complement its imports from Argentina.

In the late 1990s, after some initial bumps on the road, ARCOR’s business expanded with a newly built, state-of-the-art chocolate factory that turned its Brazilian operations into the group’s leading business outside its homeland, Argentina. In addition to serving its domestic market, Arcor do Brasil became Brazil’s top candy exporter. ARCOR tried to secure specialization advantages through its Brazilian operations, complementing Argentine exports with exports from Brazil’s affiliates. ARCOR manufactured candy, chocolates, cookies and food products, with a daily output of 1,500 tons and over 12,000 employees. It exported a wide range of products and was the Argentine company serving more global markets.

Created in 1991, the ARCOR Foundation had become renowned for  its child-centered social programs and its professional, large-scale approach to social engagement. The product of a corporate strategic planning process undertaken in 2004, the Foundation intended to gain recognition in Latin America for its superior quality, childhood-oriented social initiatives.

Virtually since inception, the Foundation focused primarily on education to help children, devoting 70% of its budget to finding and supporting educational opportunities for very young kids (ages 0 to 8). To that end, the Foundation not only concentrated on developing intervention schemes but also sought to mobilize other actors, advance knowledge  and influence public policies. Its strategic approach also hinged on community work, engaging organizations and, primarily, institutional networks to enhance resources, mobilize actors, and coordinate cross-sector efforts.

While ARCOR’s affiliate in Brazil had, from early on, embarked on several educational, social and environmental efforts, it was only in the late 1990s that the Group decided to have the Foundation drive corporate community initiatives to support its Brazilian affiliate’s growth. Among other initiatives, the case describes the Foundation’s collaboration with the World Childhood Foundation Institute and Fundación Vitae to address local childhood issues. The Foundation also replicated its Argentine programs, including “My School Grows.” The case also describes a survey conducted to assess current corporate social practices, as its findings revealed a rather inconsistent, philanthropic approach. In closing, the case introduces a dilemma that revolves around Arcor do Brasil’s future corporate social strategy to face a changing local scenario.

This case may be used in courses on international business; corporate strategies, including an analysis of company positioning strategies in international markets, or courses exploring the ties between businesses and communities.