Rasio’s Strategic Diamond Model
before Stanol Ester
Diamond Model - ARENA
- Grain milling company
(cereals, vegetable oil)
- Animal feeds
- Malt production
- Potato starch
- Soviet Union
- Considerable entrepreneurial initiative technical ingenuity.
- Plan construction with innovative improvisation.
- Active program of R&D
Diamond Model - VEHICLES
- Expand to animal feeds
- Malt production
- Potato starch
- Paper Industry (1960). Joint Ventures:
In 1987 Raisio group (Vehna oy)
merged with oil factor
Oy Kasxioljy-Vaxtoljhe Ab.
Diamond Model - DIFFERENTIATORS:
Market Leader in flour, pasta and Musli in all area of Russia and Estonia.
Diamond Model - STAGING & PACING:
Speed of expansion:
- From 1987-1991 increase income average 10%.
- R&D extensive research on fat metabolism and plant sterol.
Diamond Model - Conclusion:
Before the Stanol Ester, Raisio was a company with
good food products and a great potential but it
missed a real differentiation which could help
avoiding threats, its extension, international
exportation and make it a leading branch of its kind.
Financial performance of the Raisio group
in the period 1987-1996
Value chain of the Benecol Business
Unit in years 1997-2000
Poter’s Value Chain: Support activities
Separate department for Benecol unit
headed by Jukka Kaitaranta.
Human ressource Management
Scientists employees for the lab.
R&D, laboratories, Patents for protect its
Purchasing and construction of new plants
Poter’s Value chain: Primary activities
Inbound logistics Cooperation with UPM-Kymmene for extraction and
productions of plant sterols.
Operation • Production of stanol ester from plant sterols to
• Conducting Researches in metabolism fat and
Outbound logistics Special own-label packaging, delivery to countries.
Marketing and sales Marketing cooperation with Johnson & Johnson for
USA. Strategies for different markets.
Services Regular services with distributors costumers.
* In order to calculate ROA we used balance sheet total as total Asset.
** In order to calculate Net income. We did ROE x Shareholders Equity.
DuPont Analysis - ROA
Years 1996 1997 1998 1999 2000
ROA(%) 2.11 3.6 4.2 0.16 -5.1
Net Income 13.095 23.244 29.167 1.216 - 38.74
1995 1996 1997 1998 1999 2000 2001
Superfluous Strengths Key Strengths
Zone of Irrelevance Key Weaknesses
strategic importance vs. relative strength
Dynamic capabilities Raisio’s Capabilities
• being aware of new developments in
• identifying customers needs
• Organizational learning
• Raisio Group aimed at studying the effect of rapeseed
oil on blood cholesterol level and came up with the
new cholesterol lowering margarine.
• determining your business model
• understanding resource needs
• making decisions
• pertaining to investing in technology and other
• leading others to make the appropriate changes
• Signing partnership contracts with the leading firm-
• An agreement for achieving a major increase in its
sterol production supply, with a French company
• Joint venture
• Following the J& J deal, Raisio began construction of
a Stanol Ester plant at Charleston, South Carolina.
• Benecol was introduced as a dietary supplement,
which was rejected.
• Maintain competitiveness
• reconfiguring the business enterprise’s
intangible and tangible assets
• J&J shifted the emphasis of its marketing strategy
from consumer advertising
• Raisio made safeguarding long term availability of
• Replacing CEOs
• Making a new contract of new relationship with J&J
• Benecol acquired global rights to sell and market
• Although having timing advantage compared to the other companies, the
opportunity wasn’t seized as expected.
• Making the agreement with J&J was Raisio’s main problem
• Replacing the CEO and a new contractual relationship with J&J helped
Raisio to re enter the market.
• Benecol acquiring of global rights helped them with saving the potential of
Raisio’s Groups dynamic capabilities we’re not enough to manage its
innovative products at first when they had the opportunity, but after the year of
2000, they had better chances to succeed world wide.
Reasons for Raisio’s failure after the year 2000:
Dynamic capabilities of the Raisio’s group:
• Making the wrong contractual deals with inexperienced companies.
• Inability to adapt fast to changes and reconfigure competencies.
• Inability to get ahead of competition although the advantages.
• Difficulty to move fast due to delay of supply and problems of
• Inability to sense the market:
limited themselves to a unique product- margarine and ineffective
partnership with J&J.
• The unavoidable competition
• The communication was minor about the future of their key
ingredient, the sterol and what to do about it in the market.
• The limited resource of its ingredient and the poorness of
the brand equity
Additional Reasons to Raisio’s failure: