Gavin Price, Margaret Sutherland
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South Africa, Medium
Market Entry; International Business; Supply Chain Management; Strategic Positioning, General Management/Strategy, International, Marketing, Wholesale Trade
Bio-Oil is a multi-purpose skin care product that has gone from being sold only in South Africa to being the No. 1 scar treatment product in 16 of the 17 countries that it is distributed. Retail sales have jumped from R3 million per annum to R1 billion from 2000 to 2008. Justin and David Letschert made key decisions to eliminate all of the other 119 products that were being manufactured by the company that they took over in 2000, and focused on the mainstay product of Bio-Oil. Union-Swiss accomplished its successful sales through the use of a hybrid distribution model that compelled its distributors in each country to communicate and share knowledge with each other. Union-Swiss also ensured that it remained focused on building the brand through limiting its activities in the value chain to that of marketing. It did this to such an extent that it created a separate entity to run the distribution of Bio-Oil in South Africa.