1. What should be Francisco Alvarez’s position at the directors’ meeting? As Francisco Alvarez reclined in the Gran Clase cabin of the Iberia A320 flight to London on the morning of 11 January 2000, he began to recount the events of the past several months. This was Blue Ridge Spain’s second directors meeting in six months, and Alvarez was beginning to think that his US joint venture partner, Delta Foods, wanted to end the partnership.

But why? The past year had been profitable, and Blue Ridge Spain was poised to enter its most successful expansion year ever. Besides, he believed that it was his company, Terralumen S.A., that had contributed the most to the success of the joint venture, and that Delta would have a very difficult time running the company on its own.

Terralumen S.A.

Terralumen began as a family-owned agricultural company that later expanded into consumer products.

Hernando Hidalgo, the founder, believed that the fastest way to acquire managerial expertise and brand equity was to establish joint ventures with US companies that were world leaders in consumer products.

Over the years, Hidalgo had been very successful in gaining managerial control over the company’s joint ventures. In his opinion, as long as a joint venture exceeded revenue expectations, most Americans were quite willing to cede control.

The joint venture In 1983 a Barcelona banker, and friend of the Hidalgo family, contacted Terralumen to request a meeting on behalf of Gene Bennett. Bennett had come to Spain to evaluate opportunities establishing restaurant operations for Blue Ridge Restaurants Corporation, a highly successful US fast food company.