1. What is your evaluation of each of the three businesses? What is your evaluation of the managers who run them?
The case in hand, Compagnie Du Froid, S.A., analyzes the company’s three regions (France, Italy and Span) and their regional manager’s business performance against the set profit plan for FY 2009. Additionally, the case also raises the question of whether the traditional approach of paying 2% of corporate profit as bonus will work or not. The situation is that the thee different regions have three different actual return figures and there are several first time situations that Jaques Trumen, CEO and major shareholder of Compagnie du Froid, S.A., is facing. The points in FY 2009 that grabbed our attention are: a) Spain
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Despite this it ha exceeded its revised growth target of 4.9% (adjusted for temperature drop) by 1.9% and achieved 6.8% growth (calculation based on exhibit 1, 4 and 6 of the given case). On production end, Spain had several challenges. Firstly, it had to acquire new machineries, and secondly, Spain was forced to get 603 thousand litres of ice cream from France. This transfer, as mentioned above, was executed based on cash plus 5% profit causing an impact to Spain’s already challenged business situation.
According to our observation, the significant variables in FY 2009 that need further investigation are (Exhibit 1, 4 and 6): * 0.08 cents reduction in Ice-cream price due to competition * 0.01 cents reduction in specialties price * Lower than planned usage of ingredients (510 liters lower) for ice-cream and 21 liters for specialties (Other ingredients were in 100 grams, which was converted to liters for the calculation of total ingredients) * Lower labor usage in specialties and ice-cream production * ‘Other Cost’ posted 21 thousand euros higher costs, especially in supervision, energy and maintenance * The selling and administrative expenses accounted 130 thousand euros higher than the projected S&A expenses
France:
According to the information provided in our case, French region posted an EBIT amount of 1242 thousand euros in FY 2009, although
c. Did anything surprise you about the company's values? Why or why not? (1-3 sentences. 1.0 points)
Therefore, we think Deutsche Brauerei have to do something to ensure that Oleg does not leave to a competitor. According to old compensation package, he will receive EUR40,000 base salary and incentive payment which is calculated by 0.5% of the annual sales increase in Ukraine. Uncle Lukas proposed his base salary up to EUR48,500 and also increase incentive payment up to 0.6% of the annual sales increase. In our opinion, we agree with increasing in base salary up to EUR48,500 (21.25% increase), but we prefer to retain the incentive payment at 0.5% of the annual sales increase because we think that this plan(increasing incentive payment up to 0.6% of the annual sales increase) may fail to maximize shareholders’ wealth. The reason is that when subject to this formula, Oleg Pinchunck may tempt to accelerate sales as much as he can without concerning about cost such as extending more credit or spending more advertising to boost sales. We would like to recommend giving him more bonus if he can reduce the accounts receivables and inventories or using Economic Value Added to tie his compensation to the firm residual income instead of tie his compensation with sales growth.
1. Imagine yourself as the manager of a struggling local suburban regional shopping mall. What do you think the mall should do to improve its performance?
The income over the last three years has been fluctuating.. This tells us the company has an initial growth period. Sales also drop between years 7 and 8 and the gross profit margin decreased as well. This may be due to operating expenses. This leads to the prospect of stable future sales. The stakeholders are continuing to back the company and the company does predict sales will remain stable. The modest increase in sales does not show enough to recover without making adjustments to free capital.
2) Rank the three countries using each of the following measures of performance: Profit, ROI and EVA
For 2004, Fixed expenses = 436 (in million €). Also, CM ratio = 653/ 1686 = 0.387
Question 2: From a qualitative viewpoint, discuss the pros and cons of launching this venture.
1. How would you characterize the business risk of Bed Bath & Beyond? Review their financial performance.
Frumherj is a car inspection company in Iceland. They are one of the largest in the country, but they want to continue to grow and to outpace their competitors. However, there are some inefficiencies in their process that must be addressed before they can meet their goals. One of their first problems is maintaining an even flow in their process environment. Due to the nature of the inspections and the cold weather in Iceland, they are much more busy in the summer that they are in the winter. This makes it difficult to keep the right amount of employees. There is little they can do to avoid this problem, but rather they should examine their historical data to determine how many employees they will need in order to meet expected
3. What is your assessment of the competitive strength of Kraft Foods’ different business units?
What is your evaluation of each of the three businesses? What is your evaluation of the managers who run them?
Traditionally, the business performance of each regional manager is measured against a set profit plan, with Jacques rewarding his managers a fixed payout of 2% of corporate profits as a bonus. However, the organization is facing many business firsts, which when
2) What are the key success factors in the casual dining portion of the restaurant industry? 3) Do a SWOT analysis of Outback Steakhouse. What does it suggest?
By reducing the introduction of new products, cost such as product development, R&D and advertising can be avoided.
In the story Perceval edited by Roger Sherman Loomis and Laura Hibbard Loomis, Perceval the main character has many adventures, in which he learns many lessons about life.