Case

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Background

Aquino Quimica Do Brasil S.A is the Brazilian subsidiary of Berre Chimique. The operation serves the four Mercosur markets — Brazil, Paraguay, Uruguay, and Argentine. The economic volatility in the region requires extraordinary focus on resource utilization and profit measurement. The highlights issues about D’Aqiono are dealing with marketing unit performance, product line profitability, profit impact of marketing programs, and sales strategy. In addition, by linking events to the Mercosur context, the case offers an opportunity to explore the economic and political circumstances that surround the customs union.

Journey of D’ Aquino Quimica Do Brasil S.A.
Berre Chimique is play as an international player in the chemical production and distribution industry. It started its operation in 1954. Actually, Berre Chimique is a French Chemical company based in Berre, France. Its chemical operation is popular worldwide. Its chemical production surrounds an enormous mixture of functions. Berre Chimique’s South American operations are based on Brazil and its main focus on commercial, industrial, and residential specialty cleaning products. D’Aquino Quimica do Brasil S.A. is a subsidiary company of Berre Chimique. And D’ Aquino actually started in the year march 1974.They were doing twenty years of exporting to Brazil and after twenty years of exporting Beere Chimique opened a subsidiary production facility where they have enough potential to meet the growing South American Consumer demand for this Beere Chimique product. When they started their operation they have the small production facility in Santo Andre, Sao Paulo. All creation was done using the patented chemical formulas approved from the French home office and identical production procedures: * Process the base chemicals according to the formula.

* Package the finished goods.
* And distribute the product to the warehouse facilities.

Competition Faced by D’Aquino
Now many brands were competing with D’Aquino to be the market leader. But D’Aquino has enough ability to compete against them and it competed nationally in the industrial chemical products market against brands such as: Lever Brothers in floor finishes and waxes, SC Johnson in disinfectants, Procter & Gamble in soap liquids. D’Aquino were tried to expand their business up to the highest limit and they have done it successfully. At the start their business was actually

based on manufacturing and distributing specialty chemical product. But later they expand their business to selling and servicing floor buffing machine equipment for cleaning and maintenance, and providing technical assistance in the form of product application procedures.

Formation of the Organization which brings the Success in the Business The company had a good number of employees who were effective and efficient workers of the organization which plays a vital role for the organization to bring the success and to make a profit. The company had 283 employees, 33 commercial representatives and 330 distributors who are the asset for this company. With the help of them by 2003 the company produced about 150 chemical products and over 540 stock keeping units (SKUs). D’ Aquino confirmed that they had an operating profit of about US $1.5 million on sales of almost US $14 million and the total gross profit margin was about US $3.8 million and from the view of common size income statement it had the operating profitability of 10.68% of total sales revenue.The 2003 financial reports sent from the Berre Chimique’s Brazilian subsidiary was the first comprehensive re-view of the figures since the new general manager, Philippe Migault, had conquested in November 2002.

The time passed by Mercosur and the member
LAFTA promote the concept of free trade & one market place: Latin American Free Trade Association in 1960 (LAFTA) encouraged the concept of free trade and one market place for South America. For that...
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