Ahold: A royal Dutch disaster
The case traces the history of Ahold, the world’s third largest food retailer, describing in detail the events in the 10 years leading up to its collapse. After the new CEO, Cees van der Hoeven, took over in 1993, Ahold embarked on a programme of rapid expansion with a target of 15 per cent growth in earnings per share per year. The strategy took the form of penetrating new geographic markets and diversification into related industries. While van der Hoeven appeared to be achieving his targets, in reality, he was sowing the seeds of his own destruction. While the apparent reason for Ahold’s downfall was the discovery of fraud at one of its US subsidiaries, the actual causes were much more complex. The company itself survived, thanks in part to the existence of a “poison pill”, but was radically restructured over the next two years with many of van der Hoeven’s ventures being dismantled. The case offers the opportunity to discuss many of the common causes of company failure: 1) poor strategic decisions, 2) over-expansion, especially through ill-judged acquisitions, 3) a dominant CEO driven by greed and hubris, 4) weak internal controls, particularly in regard to remote operations, 5) ineffective boards. The case can also be used to comment on the existence and effect of “poison pills” and other restrictions on ordinary shareholder power; corporate governance and the many reforms now in place or being proposed; and how distant operations can be effectively controlled.
Ahold
1993-2005
Cranfield University
Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]
Harvard Business School Publishing
60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]
NUCB Business School
1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]
IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.
Research Information & Knowledge Hub for additional information on IMD publications
The payment processing industry in Europe had operated in largely the same way for decades. A standard system of financial processing and clearing ...
In this study, we analyze three decades of return data from listed private equity (LPE) companies, focusing on the return averages and volatilitie...
Fatbergs and grease waste from industrial kitchens are hardly the most enticing topics for a business school case study. Yet ZhanaSolutions, the st...
Forecasting Bitcoin’s returns continues to be a challenging endeavor for both scholars and practitioners. In this paper, we train a random forest m...
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
in I by IMD Magazine June 2024, no. 14, pp. 33-35
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Case reference: IMD-7-2520 ©2024
Research Information & Knowledge Hub for additional information on IMD publications
in Journal of Financial Transformation June 2024, no. 6, pp. 126-133
Research Information & Knowledge Hub for additional information on IMD publications
in I by IMD 31 May 2024
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
in Digital Finance 1 May 2024, ePub before print, https://doi.org/10.1007/s42521-024-00110-7
Research Information & Knowledge Hub for additional information on IMD publications