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Eurobrand Challenge
Team Captain Crunch
Chen Hou / House Zhang / Rudy Tjong / Samuel Sutanto / Yvonne Baker
Background
100 years old company
Over $9 Billion of Sales Worldwide
European Industry Structure
Compound Annual Growth Rate (CAGR):
3.50% in the past 5 years
Ready to eat segment is the most...
UC European Operations
More than 50 years (since 1952)
UC established national subsidiaries, led
by Country Manager (CM) –...
Competitors
Kellogg’s (26%)
Cereal Partners (17%)
Weetabix (7%)
United Cereal (20%)
Key Issues
Shall we launch Healthy Berry Crunch?
Shall Healthy Berry Crunch become UC’s
first Eurobrand?
How to ensure Eur...
What if we don’t launch the product?
Opportunity Cost
Sunk Cost
Discouraged Entrepreneurial Spirit
What if we launch the product?
Cons
Corporate
Culture Clash
High risk in
marketing
High Initial
Investment
Pros
Cost savin...
Proposed Solutions
Stage by Stage Launch as Eurobrand
France as the First Stage
Already tested in the France Market
Yearly...
Benefit of Eurobrand
Staff reductions
Cut product development time and
marketing cost by 10% to 15% over three
years
2009 ...
Proposed Reorganization
European VP
Admin &
Finance
Engineering
Manager
European
Sales
Manager
R&D
Manufa
cturing
Marketin...
Proposed Marketing Plan
Target Market:
Parents with Children
Health Conscious Adults
Positioning:
Healthy
Premium
Environm...
Proposed 4P’s
Price
Premium
Product
Produced Locally
Packaging:
Post Consumer
Recycled Material
Serving Size:
Regular & On...
Coolest Breakfast Ever!
Pro Forma Financial Statement
Europe France
Growth Rate
3.50%
France
Year 3
Growth Rate
3.50%
France
Year 3
Sales $1,850,8...
Pro Forma Financial Statement
$20 Million Initial Investment
SG&A Savings: 10% - 15%
by the third year
Compound Annual Gro...
Recommendation
Launch the Healthy Berry Crunch
Cut the operations cost 10% - 15%
Improve Lateral Communication
Maintain th...
Thank You
Berry Much!
Team Captain Crunch
UC_CaseCompetition_R4
UC_CaseCompetition_R4
UC_CaseCompetition_R4
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UC_CaseCompetition_R4

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UC_CaseCompetition_R4

  1. 1. Eurobrand Challenge Team Captain Crunch Chen Hou / House Zhang / Rudy Tjong / Samuel Sutanto / Yvonne Baker
  2. 2. Background 100 years old company Over $9 Billion of Sales Worldwide
  3. 3. European Industry Structure Compound Annual Growth Rate (CAGR): 3.50% in the past 5 years Ready to eat segment is the most lucrative: 87% of total market overall
  4. 4. UC European Operations More than 50 years (since 1952) UC established national subsidiaries, led by Country Manager (CM) – ‘Mini UC’ Customer Oriented UC owns 20% of the European market: $1.8 Billion
  5. 5. Competitors Kellogg’s (26%) Cereal Partners (17%) Weetabix (7%) United Cereal (20%)
  6. 6. Key Issues Shall we launch Healthy Berry Crunch? Shall Healthy Berry Crunch become UC’s first Eurobrand? How to ensure Eurobrand is an effective implementation? How are we going to launch it?
  7. 7. What if we don’t launch the product? Opportunity Cost Sunk Cost Discouraged Entrepreneurial Spirit
  8. 8. What if we launch the product? Cons Corporate Culture Clash High risk in marketing High Initial Investment Pros Cost saving 10 – 15% in 3 years Economy of Scale Increase Barrier of entry for other products
  9. 9. Proposed Solutions Stage by Stage Launch as Eurobrand France as the First Stage Already tested in the France Market Yearly sale $388 M Net profit margin 13% Second stage: UK and Germany Third stage: Rest of Western Europe
  10. 10. Benefit of Eurobrand Staff reductions Cut product development time and marketing cost by 10% to 15% over three years 2009 European SG&A: 35.1% of sales
  11. 11. Proposed Reorganization European VP Admin & Finance Engineering Manager European Sales Manager R&D Manufa cturing Marketing Services Logistic & Purchasing Brand Manager Brand Manager Brand Manager Brand Manager Operations Manager UK Division South Europe Division North Europe Division CM France CM Germany CM Italy Juice & Dairy Cereal Snacks Frozen Foods R&D R&D
  12. 12. Proposed Marketing Plan Target Market: Parents with Children Health Conscious Adults Positioning: Healthy Premium Environmentally Friendly
  13. 13. Proposed 4P’s Price Premium Product Produced Locally Packaging: Post Consumer Recycled Material Serving Size: Regular & On-the-go Place Grocery Store (Supermarket & Hypermarket) E-Commerce Promotion Mobile Promotion Social Media Promotion
  14. 14. Coolest Breakfast Ever!
  15. 15. Pro Forma Financial Statement Europe France Growth Rate 3.50% France Year 3 Growth Rate 3.50% France Year 3 Sales $1,850,866.00 $388,682.00 $430,938.68 $430,938.68 COGS $889,134.30 $186,718.27 $207,017.88 $207,017.88 SG&A $573,768.46 $120,491.42 SG&A Saving -10% $108,442.28 SG&A Saving - 15% $102,417.71 Depreciation and Amortization $74,034.61 $15,547.27 $17,237.54 $17,237.54 Operating Income $313,928.63 $65,925.04 $98,240.98 $104,265.55 Interest Expense $9,254.20 $1,943.38 $2,154.66 $2,154.66 Other Income $3,701.60 $777.34 $861.85 $861.85 Income Before Taxes $300,972.83 $63,204.32 $95,224.47 $101,249.04 Income Taxes $84,000.01 $17,229.75 $19,102.93 $19,102.93 Net Income $216,972.82 $45,974.57 $76,121.54 $82,146.11 Total Assets $1,260,000.14 $264,600.12 $271,192.53 $271,192.53 Total Common Equity $350,280.04 $73,558.83 $81,555.99 $81,555.99 Net Income Ratio 11.72% 11.83% 17.66% 19.06% Basic Earning Power 24.91% 24.91% 33.49% 38.45% Return on Assets 17.22% 17.38% 25.95% 30.29%
  16. 16. Pro Forma Financial Statement $20 Million Initial Investment SG&A Savings: 10% - 15% by the third year Compound Annual Growth Rate: 3.50% Net Profit Increase 65.57% - 78.68% in the third year
  17. 17. Recommendation Launch the Healthy Berry Crunch Cut the operations cost 10% - 15% Improve Lateral Communication Maintain the CM’s Authority Lean Management
  18. 18. Thank You Berry Much! Team Captain Crunch

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