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Clayton Industries

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Clayton Industries
DATE: February 23, 2012

TO: Clayton Industries Management

Dan Briggs - CEO Clayton Industries

Simonne Buis - President Clayton Europe

FROM: Peter Arnell - Manager Clayton SpA

RE: Action Plan for Clayton SpA to Increase Sales & Profitability in the Italian Sector

EXECUTIVE SUMMARY:

Clayton SpA, the Italian subsidiary of Clayton Industries, faces numerous obstacles that are causing the company to lose profitability as well as its standing in the market it once had. Declining sales, a global recession, stiff competition from Asian manufacturers, inflated operational costs, and decreasing demand for the product are all reasons why Clayton SpA is forced to reevaluate the Brescia Italy plant and make a sound business decision as to its fate. After discussions and meetings with other plant management and personnel, three options were proposed: invest additional monies into the Italian division and revive operations, target production towards absorption chillers rather than the compression chillers, or wait about six months and observe the activity of the economy before making any type of financial decision. Targeting production towards absorption chillers is the best option for Clayton in order to regain its position financially and its competitive position in the market.

INTRODUCTION

Clayton Industries, a business based on sales of window mounted air conditioning units sold in residential and small commercial units, was formed in 1938 in Milwaukee, WI. In the 1980's, the company decided to expand into commercial operations in North America and saw an opportunity for growth in the European market. It achieved this growth through the acquisition of four other companies, including Corliss - a company that manufactured HVAC units and AeroPuro - an Italian manufacturer of compression chillers. Clayton did an organization restructure in order to accommodate the global expansion and developed a new entity, Clayton Europe,

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