The case describes the champagne house Krug turnaround process. The house in the late ’90s had a troubled financial situation. Acquired by the French conglomerate LVMH in the late ’90s, and despite the efforts and investments, the house did not seem to recover and, by 2008, was once more suffering financial distress.
In 2009, Margareth Henríquez arrived as CEO. Based on her previous turnaround expertise in larger firms, Krug seemed like a less challenging project. However, her first year at Krug, with continuous declining sales, proved that Krug’s situation was more complicated than anticipated. The case allows a discussion of the real complexity in setting the strategic rationale of a turnaround. It describes the initial missteps and the search for guidance on the roots of the house, which brought Maggie on a journey of discovering the visionary approach of its founder, Joseph Krug.
The case is rich in detail across all firm facets to allow a discussion on all the transformation measures taken and its rationale. Then the case is well suited to a debate on strategy implementation. Likewise, it might also be appropriate to discuss the adjustment of the marketing policies on a turnaround.
Lastly, the case emphasizes the role of Maggie as a transformational driving force. A woman from a different culture on a selective, and to a certain extent, conservative market. Her strategic approach and her decisive leadership in challenging classic policies are also fundamental pillars of the transformation.