Douwe Egberts versus Jacobs

Thwarted Invasion of the Dutch Market (1991).
The coffee producer Douwe Egberts (Sarah Lee Inc) has dominated the Dutch market for more than sixty years and her market share is a whopping 60%. Jacobs is the largest coffee producer in Germany (Kraft Foods Inc.) and is expanding in several other European markets. Many European companies are eyeing the
Dutch market because the Dutch consume large amounts of (strong) coffee. Douwe Egberts (DE) watched the movements of its European rivals carefully. In 1991 it discovered that Jacobs was successfully invading the French market with a deluxe coffee ‘Carte Noir’
in a special vacuum packaging. The introduction in the French market was supported by advertising using a romantic theme.
This type of deluxe coffee did not yet exist in the Dutch market. DE assumed that Jacobs would one day also invade the Dutch market with this unique product which was so successful in France. Therefore as a precaution and to plug the gap in its product range DE started to develop a comparable deluxe product ‘Cafuego’. Because of its good relations with the retail trade, DE discovered that its suspicions were correct; Jacobs was indeed on the verge of entering the Dutch market with its ‘Carte Noir’ coffee. Because of the precautionary measures DE took, it was able to introduce, just in time, and almost at the same moment, its equivalent product ‘Cafuego’ onto the market. With this frontal counterattack it was able to block a successful roll-out by Jacobs into the Dutch market. Within a year Jacobs had withdrawn from the Dutch market.
According to Sun Tzu, Jacobs entered ‘Key Ground’. DE launched a successful counterattack on its home ground. Because of its diligent scouting of what was happening in adjacent markets, DE was able to timely anticipate the enemy attack.



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