Extract

After a long and sleepless night, Juan Miguel Sánchez, Vice-President of Sánchez & Co., felt all the responsibility of the company’s future on his shoulders. In less than an hour, he was to present his action plan for a major turnaround to the board of directors. The company and the family were not new to changes and turmoil in their business and social environment. As his father and president of the board, Juan José, was proud to repeat: ‘the history of Sánchez & Co. was evidence of the firm’s considerable capacity for re-inventing itself. In over 90 years, the nature of the company’s business had changed each time circumstances required it, shifting from coffee and cocoa exporters, to foodstuffs importers, to electronics retail and franchising, all without impairing the firm’s progress’. In the last month, Juan Miguel and his managerial team had gone over different scenarios from radically innovating the franchising concept of Video Magic, the group’s home video rental chain, to proceeding to a strong disinvestment strategy in Venezuela. Video Magic was facing major changes in the video rental industry: with the introduction of digital technology, movies became available on the internet, radically changing consumer habits. By 2008, Video Magic franchisees were closing one after the other, at an alarming pace. Hence, will Juan Miguel be able to continue the success story of his father and grandfather, or will he be the first to fail when facing a hostile environment?