Clayton Industries Essay

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A Case Analysis

Table of Contents Executive Summary 1 Company Background 3 Problem Statement 5 Internal Factors 5 External Factors 6 Analysis 7 Industry 7 SWOT 7 Alternatives 9 Revitalize Clayton SpA 9 Absorption Chillers 11 Recommendations 13 Considerations of Peter Arnell 13 Reduce Capital Use 14 Reduce Costs 14 Rationalize Product Line 15 Align for Growth 16 Conclusion 18 References 19 Appendix 20

Executive Summary
In the midst of a global recession, Clayton Industries is challenged by a diminishing demand for their product and rising variable costs. These issues are further compounded by stiff market competition that …show more content…

The 10/10/10 plan called for all European companies to reduce receivables and inventories by 10 days and to reduce personnel by 10 percent. For “Top Four in Four”, each country manager was to prepare a plan to show how the product for which they had European-wide responsibility would hold a top four share of the European market in four years (Bartlett et al., p.3). In June of 2009, Buis fired Paolo Lazzaro, president of Clayton SpA since 1998, for his attitude that Italy should “weather the storm” of what he felt was just a low in the commodity cycle and not developing a plan of action. Peter Arnell, named successor of Italy in July, was tasked with turning Clayton SpA around and meeting corporate initiatives.
Clayton Industries was struggling due to the recent recession. However, Clayton SpA was particularly faltering - losing approximately one million dollars a month in mid-2009. Since 2004, Italy had been behind other European countries in revenue growth. Sales declined 5.3% in 2008 and in the first half of 2009 dropped by 19.4% (Bartlett et al., p.3). Accomplishing either corporate initiative set by Buis would be difficult for Clayton SpA. Inventory and receivables were both above 120 days and a reduction of 10 days would be difficult. Several factors, both internal and external, lead to the situation Italy faced at the time.
Internal Factors
Paolo Lazzaro had previously

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