Mustika Ratu - Navigating Through Social and Economic Crisis

Mustika Ratu is a leading Indonesian manufacturer of health and beauty products and traditional herbal supplements that began as a modest enterprise and had grown to become one of Indonesia's most successful consumer products companies. However, in May 1998, in response to the social, political and economic chaos Indonesia was experiencing (sparked by the Asian financial crisis of 1997), the capital erupted in a sea of violence. The rioting affected almost every business operating in Indonesia. Mustika Ratu's managing director must decide whether to design and implement a new strategic marketing plan in light of the external environment and a potential decline in revenue growth or to remain true to the strategies that had garnered success in the past. The case will help students appreciate the importance of remaining true to a successful strategy, yet flexible enough to respond to the realities of the external environment, especially during times of crisis, when managers will be most tempted to deviate from their strategy. It also will help students understand how opportunities can arise from crisis, including fast-tracking international expansion plans, better positioning current products or launching new product lines, making acquisitions, or investing in capital intensive projects in times when inputs can be procured at a lower cost.