By: Benjamin Morgan
500 261 174
From the assigned reading it becomes clear that there are a number of symptoms which suggest that beverage manufacturer and distributer Cerjugo SA is a company in crisis. The main signal that Cerjugo is not living up to its expectations is that its forecasted sales and profit targets, for its juice division, have not been met for two consecutive years this is especially troubling for a company which in the past boasted a 98% share of the beer market in Latin America. Beyond the lack luster sales numbers there are many other symptoms that Cerjugo’s juice division is ailing, such as reports that potential customers are not aware of the “freshness” and high quality of the product and the brand reputation is suffering accordingly, this is particularly problematic because the “freshness” of Cerjugo’s juice is their main value proposition. Fault lines are also starting to show on the personnel front, with increased turnover rates in their sales force as well as stresses between top executives at the company, which often has them battling one another. Recently, Cerjugo President Manuel Perreria heard that his Manager of Juice Manufacturing, George Novedads will be resigning to take a position with a rival company, a clear sign that things have gone amiss. Root Cause
A key problem at Cerjugo appears to be their attempt to add a juice division to their previously successful business model and organizational structure without making many alterations. An addition of a juice product line requires a new approach to that part of the business, because as Cerjugo already admits, the markets for juice and beer are quite different. This attempt to integrate the juice business into their current organizational structure has created ample amounts of workplace stress on everyone from high level managers down to the sales staff. The organizational structure places Guzman, the...