Case Analysis of Euroland Foods S.A. plus a new implement strategy Nowadays, we can see the huge disasters around the world that some of them are natural disasters such as earthquake, tsunami and so on and others are artificial ones for instance, financial crisis, energy crisis, revolution and so on. When we are faced the problem or the case the following should be our reaction: 1) f the case or the problem is related to our life directly, we should assume that it is a case of another person and we are a consultant to solve her!his problem. ") f the case is related to other people, we should consider that it is our problem p roblem directly and proceed to solve this case. When we receive a case or problem, we should mush pit into the pool and only utili#e from references and other people e$periences focused on case. t means that we do not need read all of pages of book to analysis the case. %t the the first, we should consider that we are the leader of the world and we are able to solve each problem. &herefore, we do not need to be a skilled person on a special field such as finance, 'conomic, 'con omic, (hysics, athematics or engineering and so on. think that t is actual concept of *% course. n the case of 'uroland +oods, +oo ds, we face to the constriction of capital spend ing initial investment) equal 'uro 1"- million for 11 proects. /ow can we cope with this investment0 Which proects should be chosen0 y analysis is based on two categories as follows: 1) Quantitative Analysis (Internal Analysis)
used from apital *udgeting &echniques below cited: 2Sensitivity Analysis consider 33 as independent variable, N(4 at minimum 353 and 'quivalent %nnuity as functions ust like (olynomials function in ath) for each 1- proects because proect 6 'ffluent 7 water treatment at four plants) definitely should be done.
%ccording to this analysis found the location o f abruptions and ranked proects by higher 33.
2 Profitability Index t can be calculated by using of W% 1-.68) and free cash flows.
2 Reinvestment Rate Comparisons for projects at ACC and IRR t has been done by using of Conflictin! Ran"in! concept and ranked by higher 33 and N(4
2 Annuali#ed $et Present %alue (A$P%) Approac& t has been ranked in accordance with %N(4.
2 'ouble 'iscountin! ec&niue %ccording to this technique, ++ of all of proects have been discounted and changed to the least years of ++. &hen, all proects are ranked by 33 and N(4. %ll above techniques have approved the proects as follows: 2(roect ". % new (lant 9ion, +rance) &his proect ") will be compulsory, if we choose proect ) 2(roect . ;outhward arket '$pansions 2(roect 11. ;trategic %cquisition 2(roect 6. 'ffluent 7 water treatment *ut since there is not enough initial investment, we have to take a decision between two options as follows:
5ption 1): 2'$panded (lant Nuremberg,
n fact, we can distribute total investment to the proects which have intangible benefits. 5n the other hand, by distribution of investment, we will run many proects instead of one proect 11). n the result, the least profit is to decrease unemplo yment rate, customer satisfaction, environment sustainability, the development of technology and so on. %s a matter of fact, by using a *alance ;corecard framework, we can measure the performance of proects better than using from financial inde$es alone. /ere are my choices: Project1, Replacement and expansion of t&e truc" fleet
2% 1? percent increase in cubic meters of goods hauled on each trip 2&he new tractors would also be more fuel and maintenance 7 efficient 2&he increase in the number of trucks would permit more fle$ible scheduling and more efficient routing and would cut delivery times possibly inventories) 2&o support geographical e$pansion over the long term Project-, Plant automation and conveyer systems
2;ystems reduce the chance of inury b y employees more than '@3 1?--- per year cost saving) 2&o be improved throughout speed Project., 'evelopment and introduction of ne/ artificially s/eetened yo!urt
2;ignificant cost saving to food and leverage 2
Project10, $et/or"ed computer2based inventory2 control system
2;horter delays in ordering and order processing 2*etter control of inventory 23eduction of spoilage 2+aster recognition of changes in demand at the customer level &otal initial investment is equal to '@31-A.? million). Now, let me leave financial case analysis and have a debate about a new strategy in food industry. When you do a strategic analysis for so many big companies in the field of food industry, you will perceive that hori#ontal integration, market penetration, market development an d product development will be the best strategies in action in accordance with B;( in which all these strategies are led to cost leadership as a
think it will be the nomination and definition of 4alue for food. n fact, if the analysis of energy on food packages is changed to the value, the people will definitely consider it as an approach to buy goods. mean that food companies should bear in mind quantitative factor ust like to qua litative factor. What is quantitative factor0 t is weight of pack. &herefore, to obtain the value of a good, we have: (: price ': energy W: weight Now, we should define the value as a function of above variables. 4alue = f (, ', W) Now, the question is: /ow can we find the rational relationship among value and variables0 &he answer is: t depends on the type of food industry. /ere, have brought you some e$amples as follows: n the case of ;nacks and *iscuit, we have (! ' and '!W in which '!W is very important because customers usually care about the compaction and distribution of energy on the weight. t means that they will be able to store energy with increase of weight. &herefore, one of the best formulations can b e as follows: 4alue = W . ') ! ( n contrast, the approach for hocolate industry is difference, maybe the similar to below formula: 4alue = ' ! W . () ;ometimes we have to find an inde$ by drawing the diagram of (! ' and ' ! W.
*esides, it is possible that food companies consider (artial +ractions as follows: 4 = f ') and 4 = g ') f ') ! g ') = (') C +1') C +" ') CD..+k ') Where: ( '): (olynomial +1 ') D..+k '): (artial fraction decomposition +urthermore, some companies maybe consider below formula for v alue: 4 = ( ! ') ! ( ! ') E ' ! W) ! ' ! W) Where: ( ! ') and ' ! W) are average whole of industry 5f course, to implement this strategy, all food companies need to help of third part y to standardi#e the value of food such as +9%, +;;, ode$ %limentarius ommission and +ood ;tandards %gency @F). Nowadays, we can see three items of (rice, Weight and 'nergy per 1--gr on all foodGs packs. think that the 4alue as the fourth item can be a new strategy for all food companies. n the matter of fact, customers need to see the value ranking of foods on packages by using of the colors or numbers.
