Making ketchup in the Ukraine may sound like an unusual business proposition, but two young Swedish entrepreneurs who set out in the mid 1990's managed to build a large and growing food manufacturing operation doing just that. The Chumak group of companies provides a strikingly clear illustration of several issues associated with building business in a foreign culture, among them: the challenge of leadership in an alien culture, the need to develop the industrial network around the company, the new challenges as the company and the market develops over time. Chumak is a startup that breaks away from the almost formulaic model of new business creation many MBAs are familiar with by being decidedly 'old economy', and clearly demonstrates what can be achieved through a credible, long-term personal commitment of the founders.
The aim of the case is to make students aware of some of the challenges faced in developing a new business in a foreign culture, including - Learning to cope with and be effective in the local business environment - Cultivating a network of suppliers, distributors and other partners in undeveloped economies - Developing relationships with strong backers in the home country - Coping with the increasing demands as an industry matures Further, the Chumak case would illustrate to MBA students that there are alternatives to the conventional high-tech startup model, and a tradeoff to keeping all career options open, as MBAs typically do. The founders worked for several years before they got their big break and financing for their business. The company built factories in an 'unsexy' industry in an unattractive location, and the founders committed to staying in that location for an extended, indefinite amount of time.
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