Compagnie Du Froid Essay

1187 Words Mar 5th, 2015 5 Pages
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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As mentioned earlier in our report, France produced 603-thousand litre ice cream for Spain and that considerably improved its overall performance. On the other hand, France’s sales volume changed from 4101 (planned) to 4618 (actual) liters for ice cream and specialties dropped from 445 liters to 405 liters (Exhibit 2). The significant variables that caught our eyes for France in FY 2009 are (Exhibit 2 and 6): * Prices for all 4 ingredients increased significantly * Significant increase in labor cost * Labor hours were higher in ice-cream production * Higher usage of other ingredients in both ice-cream and specialties * ‘Other Cost’ posted an amount of 118 thousand euros lower than the planned other costs, which includes supervision, energy and maintenance * The selling and administration expenses accounted 97 thousand euros higher that that of projected
According to the information provided in the case, the Italian region achieved 58 thousand euros of EBIT above the planned EBIT. It had also beaten its growth target by 1.28% and achieved 13.28% against a target of 12% (Exhibit 3 and 6). On production end, Italy’s profit plan was adjusted for lower efficiency to cater for the old machineries that were moved from France. Italy’s plan was adjusted for higher wages to suit local market situation. As the sales volume for ice cream has changed from 2453 thousand

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