Clayton industries
CLAYTON INDUSTRIES
1º Executive summary:
Clayton Industries has been beaten by the current economic situation. But there is one European subsidiary that is suffering more than the rest. The Italian plant is having deep losses and needs to be re-established. The European head has appointed a new plant director in Italy to make this factory profitable or to take another decision to face the current scene and the possibility of growing in few years.
2º SWOT Analysis:
Strengths:
Support from the direction.
Strong political relationships in Italy.
New facilities.
Weakness:
The current strategy delivers losses more than 1 million per month.
Receivables and inventories are both above 120 days sales.
Not flexible production lines.
Threats:
The Labour Union won’t be receptive to layoff plus tough local laws.
The current stall in real estate and no suitability to new buildings.
Decreasing demand of compression chillers.
Low prices by competitors and more advanced technologies.
Opportunities:
Likely market growing in future.
3º Statement of the challenge:
The manager has to offer a suitable solution to generate profits and win share market. He also has to find the way to compete with more technological and cheaper competitors in his own market and European market. Is the chiller compressor a bid for the future?
4º Development of alternatives:
The Italian subsidiary has different ways to tackle these issues. The manager has to decide between three strategies well differentiated.
1. Boosting the plant efficiency and revitalize the chiller line:
The Italian managers bet for this option, but the company would have to invest about $5 million, and most of that amount would be spent in the first twelve months. The trend for this line of products is decreasing, so likely, it not faces a long-term growing strategy.
2. Restructuring the plant to face the growing demand of absorption chillers:
The Spanish manager thinks that it
1º Executive summary:
Clayton Industries has been beaten by the current economic situation. But there is one European subsidiary that is suffering more than the rest. The Italian plant is having deep losses and needs to be re-established. The European head has appointed a new plant director in Italy to make this factory profitable or to take another decision to face the current scene and the possibility of growing in few years.
2º SWOT Analysis:
Strengths:
Support from the direction.
Strong political relationships in Italy.
New facilities.
Weakness:
The current strategy delivers losses more than 1 million per month.
Receivables and inventories are both above 120 days sales.
Not flexible production lines.
Threats:
The Labour Union won’t be receptive to layoff plus tough local laws.
The current stall in real estate and no suitability to new buildings.
Decreasing demand of compression chillers.
Low prices by competitors and more advanced technologies.
Opportunities:
Likely market growing in future.
3º Statement of the challenge:
The manager has to offer a suitable solution to generate profits and win share market. He also has to find the way to compete with more technological and cheaper competitors in his own market and European market. Is the chiller compressor a bid for the future?
4º Development of alternatives:
The Italian subsidiary has different ways to tackle these issues. The manager has to decide between three strategies well differentiated.
1. Boosting the plant efficiency and revitalize the chiller line:
The Italian managers bet for this option, but the company would have to invest about $5 million, and most of that amount would be spent in the first twelve months. The trend for this line of products is decreasing, so likely, it not faces a long-term growing strategy.
2. Restructuring the plant to face the growing demand of absorption chillers:
The Spanish manager thinks that it