Pan Europa Project Management Case Study

1418 Words Sep 13th, 2013 6 Pages
Pan Europa Foods

* Question 1 * a. Strategically, what must Pan-Europa do to keep from becoming the victim of a hostile takeover?
Answer: Pan Europa should not decrease the dividends of the shareholders to not devalue the stock price of the company. Instead should just decrease capital spending as what they board of directors have decided. In short, they should adopt strategies that should increase stock price not push it down to discourage buyout.

b. What rows categories in Exhibit 2 will thus become critically important in 1993? What should Pan-Europa do now that they have won the price war?

Answer: As suggested by their bank they should reduce their debt due to the high debt to equity ratio incurred during the price wars and
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Answer: Projects that have nonquantitative costs and benefits would include: * Projects that impact the company’s regulator compliance such as effluent treatment (environment) and warehouse automation (safety). * Several of the projects could impact the company’s image. For example, the snack food rollout could be positive because of its wholesome connotations while the acquisition of the schnapps brand could be negative. The effluent project could be positive by showing the company’s willingness to act on environmental concerns early. Similarly the automation project could be cast a positive step towards increased safety. The plant expansion project may be positive or negative depending on whether the community reacts to new jobs or factory encroachment. * * Question 5
Considering all the above, what screens/factors might you suggest to narrow down the set of most desirable projects?

1) I would recommend four screens be applied using the following factors:

* Does the project incurr a high cost?
Exceeds Tolerable Cost Value * Is the project a “Mandatory”?
Options – Yes/No * Does the project meet minimum IRR?
Options –Ok/Not Ok * Does the project meet maximum payback period?
Options –Ok/Not Ok * Does the project incur high risk?
Options –Ok/Not Ok * Does the project meet the current corporate strategy?
Options –Ok/Not Ok

What criteria would you use to evaluate the projects on these various factors? 2)

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