December 2011
Case
HBS Case Collection

Roger Caracappa: Package Deals for the Estée Lauder Companies

Format:Print
| Language:English
| Pages:2

Abstract

Roger Caracappa must negotiate a cost-saving, innovative proposal from a potential French supplier that could displace the otherwise satisfactory, long-time incumbent supplier. Shortly after being promoted to executive vice president of the Estée Lauder Companies with global packaging as a key responsibility, Caracappa had to assess a recent proposal he had received from a small French company that had patented a packaging innovation. The innovation could save the Estée Lauder Companies some $4 to $5 million per year if Caracappa championed it, negotiated a deal to use it, and if it were adopted by Lauder's key brands. If the new packaging functioned as promised, the consumer would not perceive any change in the high quality, stylish packaging that was essential to the luxury image of the firm's brands. But if the new packaging caused production, delivery, or quality problems, the supposed savings would be quickly forgotten and Caracappa would bear a heavy responsibility both for the problems and for disrupting an otherwise satisfactory relationship with the long-time incumbent supplier.