Multinational Company
Summary of the case
The case is about multinational company Pan-europa food S.A. which was founded in 1924 by Theo Verdin, and its headquarter was in Brussels, Belgium. Its main products were ice cream which accounted for 60 percent of the company’s revenue, yogurt which contribute about 20 percent; bottle water which accounted for 10 percent and the fruit juicy accounted for another 10 percent. And its main marketing target is European area. In order to increase their marketing value, they decided to develop new products; they make 11 projects which will cost over 208 million euro which is over the limit that the board gave. Base on the budget and main situation of the company, the challenge of the senior managers is to allocate the money among the range of projects such as the introduction of product, acquisition and marketing expanding; how to improve the process efficiency, preventing the maintenance, and how to control the safety the future pollutions. Sales were static, because the low population growth of northern Europe, and the failure in new product introduction.
Questions
The trading price of Pan- Europa is lower than other comparable companies. This is because they were failure to deliver new product which reduced the profit. As the senior director of Venus said the company should cut the dividend. So the company needs to set up strategies that could increase their stock price, increasing the net income and gross sales. And the company also needs to decrease the capital budget as the board decided.
Pan-Europa needs to use what they have earned to increase the market share. Nigel Humbolt and Fabienne Morin could lead the way for Pan-Europa.
Project 5, Plant automation and conveyor systems, Project 6, Effluent water treatment at four plants. Because the safety and environment could influence the image of the company and their shareholders.
The element of the projects might imply riskiness such as expanding the truck fleet, the size of the project, the complexity of the project and the how long it will return. The technology changes will increase risks. And also the automation and develop new product will also increase the risks.
There are synergies between the expansion of a plant, plant automation and conveyor systems, truck upgrade and the geographical expansion.
The projects have nonquantitative benefits or costs that should be considered in an evaluation include: Project 5 Plant automation and conveyor systems, Project 6 Effluent water treatment at four plants. Those projects could influence the public image of the company. Because these Project are involved in safety and pollution issues which the most concerned by the public.
Is a “must do” project out of the control of the company?
Does