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  • October 2020
  • Case
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Surviving Venezuela's Hyperinflation: Automercados Plaza's

By: Alberto Cavallo, Mariana Cal and Carla Larangeira
  • Format:Print
  • | Language:English
  • | Pages:29
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Abstract

Under the rule of presidents Hugo Chávez and Nicolas Maduro, Venezuela experienced one of the worst economic and political meltdowns in modern history, culminating with a massive hyperinflation. Remarkably, during this dramatic times Automercados Plaza's had grown to become one of the most successful supermarket retailers in the country. Its management team had faced all kinds of challenges, including price indexation, price controls, scarcity and stockouts, informal competitors, and an ever-shifting set of government interventions. Showing resourcefulness and the flexibility needed to quickly adapt, Plaza’s had managed to survive and even thrive. The future, however, looked very uncertain. Could Plaza’s keep growing in an ever-shrinking economy? Would the (now larger) company manage to continue to avoid clashing with the government? Cheap financing in bolívares was no longer available, and other companies had learned to operate under high inflation conditions as well. While additional growth could help fend off new rivals if the economy improved, it was not clear when (or even if) that would happen. Despite increasing domestic and international pressure, President Maduro refused to resign. Even if he did, could Venezuela’s economy recover after more than two decades of Chavismo?

Keywords

Hyperinflation; Populism; Inflation And Deflation; Macroeconomics; Management; Strategy; Organizational Change And Adaptation; Business And Government Relations; Retail Industry; South America; Venezuela

Citation

Cavallo, Alberto, Mariana Cal, and Carla Larangeira. "Surviving Venezuela's Hyperinflation: Automercados Plaza's." Harvard Business School Case 721-014, October 2020.
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About The Author

Alberto F. Cavallo

Business, Government and the International Economy
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