Compagnie Du Froid S.A. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Compagnie Du Froid S.A. Case Solution

Problem Statement

The problem Mr. Jacques was facing is related with the poor performance of its three different regions, the shareholders as well as the top management of the company was forcing Mr. Jacques to develop the bonus plan according to the performance of the individual business segments and not the traditional method of fixed 2% irrespective of their performance.

compagnie du froid case solution

Performance of the three different regions

In order to evaluate the performance of the three different regions of Compagnie Du Froid, (France, Spain, and Italy) as well as their regional managers to propose an optimal bonus plan for them, other than the 2% which is the traditional approach of Mr. Jacques. The different regions of the company represent different return figures and generating those issues that have not previously dealt by the company. Some of the major points gathered from the year 2009 are as follows:

Italy Region successfully met with the targeted sales goal and focused on the further expansion of its business.
France Region has shown a growth over 20% as compared to its past performance.
Spain has shown a dismal performance that negatively affects the overall corporate performance.
Due to the issues with the Spain division, it had to import some goods from France Region. Mr. Jacques proposed a transfer pricing of a cost plus method by charging additional 5%.
France Region had been engaged in another distribution business which is not the core business of the company.

Italy Region:

It can be seen that the Italy Region has achieved a favorable result in each of its different major factors like revenues, cost of goods sold and earnings before interest and taxes as compared to the proposed profit plan of the company. The region achieved 58 thousand Euros in EBIT more as compared to the proposed EBIT. In addition to this, the revenues that were proposed in the profit plan were also beaten up by about 1.28%. As far as the production is concerned, due to the company got the old machinery which was delivered from France which somehow affects its performance. In addition to this, the region had to face higher wages for its labors to suit local market situations. The actual revenue figure 2480 thousands liters was higher from the 2453 thousand liters of sales volume for ice cream, also the volumes generated from the specialties products was also higher which strongly suggest that a flexible budget is required to be made which could help in actual comparing the actual result with that of the budgeted and could also help in assessing the performance of its regional manager. From that budget some of the conclusions derived are as follows:

Favorable results have been acquired in the sales figure for its ice cream product but not for the specialties.
Reduction in Specialties price is about 0.04 cents.
Ingredients for ice-cream production were 33.1 thousand liters higher than the projected amount.
The planned usage of ingredients for specialties is much lowering as compared to previously planned.
The labor usage in specialty production is much lower than planned.
The labor usage in ice cream production is higher than planned.
03 cents lower diary product price.
Other cost relating to supervision, energy and maintenance is lower to about 07 thousand Euros.
The selling and administration costs rose by 27 thousand Euros that that of profit plan................ This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.