Compagnie Du Froid Essay

1179 Words Feb 1st, 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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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

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