Essay about Groupe Ariel

2120 Words Nov 12th, 2014 9 Pages
Groupo Ariel: A Project Analysis
On June 23, 2008, a Monday morning, Francois Belliard arrived at his office in Groupo Ariel’s corporate headquarters in Toulon, France. The prior week, Belliard had requested additional financial information about an investment proposal from Ariel-Mexicana, a wholly-owned subsidiary that operated a manufacturing facility and a regional sales office in Jalisco, Mexico. The information had arrived late Friday, too late for Belliard to analyze due to the weekend. He sat down this morning to examine the proposal, as it was Belliard’s job to evaluate cross-border projects for Ariel, a global manufacturer of printing and imaging equipment. This type of cross-border proposal was not unusual as Ariel was in the
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The difficulty inherent in the increased business was the “by-hand” nature of the refurbishment process employed, using hand tools, and a simple extraction/injection device. The local plant manager became aware of an automated process, and submitted a proposal to the main office in France to buy and implement this new methodology. Centering on an extraction/injection machine from a German manufacturer that cost 3.75 million Pesos (about Euro 235,000) fully installed, the machine would require less labor and materials to operate. Though a relatively low cost project, Groupo Ariel required all such investments in their foreign subsidiaries to be submitted and evaluated at headquarters. Belliard had been assigned this evaluation, and needed to complete it quickly so that his supervisors could make a “up or down” decision shortly.
Groupo Ariel Background
Groupo Ariel was a global manufacturer of printers, copiers, fax machines, and other document production equipment. The company also manufactured recycled and refurbished related supplies and parts for their products. The company provided consulting and document production outsourcing services that generated about 18% of the total company revenue. Company sales for 2008 were projected to be Euro3.35 billion, down from 2007 due to the global recession. Operating Profit was expected to be Euro61.2 million in 2008, and the company projected a small loss for the year. Exhibit 1 presents selected

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