Euro land Foods S.A Harvard Case Solution & Analysis

Introduction

Euro land is a pioneer name in the business of food and beverages and it has a strong brand equity and strong public image. The company is headquartered in Belgium and due toits business in the northern and Western Europe, the company’s core business pertains to food and beverages and it includes ice cream, yogurt, mineral water and fruit juices in its product line. The company is a multinational and global manufacturer of these items also the company has a strong market reputation. Moreover, the market image the company is working to make and retain its market position for many years and it showed itself as a very successful business.

The company was founded by a European farmer in order to make the processing and sales of its dairy products and also for his other products’ processing.The company later on turned into a very profitable business and then become public limited in 1982. The name of the farmer was Theo Verdin, however the company’s CEO or PDG president Director General is his Granddaughter namely Wilhelmina Verdin.

The company is a large business and covered a big market share, the company’s annual revenue is around 1.6 billion € in 2000,which consisted of ice cream as 60%, Yogurt 20%, bottled water 10% and Fruit juices 10%. The company’s major focus was on the ice cream segment and yogurt segment. It was expected that the yogurt segment will increase it sales and will make large contribution as ice creams because of the increasing demand of flavored yogurts and increasing awareness and demand of low fat yogurt by health conscious people.

The company was making a huge revenue and making big profit as indicated by the case as the company was focusing to increase its sales and consumer reach and to focus to increase its global position in the market and other European regions where they were lacking.

The company was facing some issues, hurdles and problems regarding its marketing, sales and operational planning, controlling and implementation of the strategies, while the company was facing some other competitive problems. All of the problems, which the company was facing, will be discussed in the problem statement.

Problem Statement

The company was facing many problems regarding its sales, marketing, planning and implementing the strategies as discussed above.The major problem that the firm was facing was that the company’s sales were constant which means the sales were not increasing and due to this the management was worried about it since the demand of the products was increasing and the company was unable to meet that demand which is why they were losing sales.

The other problem regarding marketing was that there was a lack of integration between the marketing and the manufacturing departments since the marketing department introduced new products and the manufacturing department was unable to meet the demand and fulfill timely orders.Also, there was a big problem regarding the company’s location of plants and distributors as the plants were far enough from the distributors which made the lead time longer and led to losses.

The other problem was regarding with the vigorous competition in the market whereas, new producers of ice creams were competing against euro land on the basis of quality.Euro land was efficient enough to cover this competition however, the other threat arose later on that the competition in the industry was begun on prices which lead the Euro land to decreased profitability.
The most major and dangerous financial threat that the firm was facing was that the company’s shares value was decreasing and the company’s leverage was 125%, which was high as compared to the industry players. Moreover, the company was relying too much on debt financing and was facing a disturbed capital structure. The firm was changed its capital dynamics by considering the threat that the firm was rejected by its bank to take more loans without reducing its current debts.............................

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