Pan-Europa Foods Case Analysis Executive Summary Pan Europa foods is a European producer of yogurt, ice cream, bottled water, and fruit juice. With stagnant gross sales and decreasing stock value, the company needs to increase its net income and increase confidence in its shareholders to avoid a takeover. With this in mind, the company decides to allocate $80 million Euros out of its $656 million asset base to capital spending in investment projects. There are currently 11 proposals on the table totaling $208 million from which the Senior Management Committee must choose from. Currently the company has two financial measures to determine if projects are economically sufficient for the firm, minimum acceptable IRR and maximum acceptable payback years. Considering these and other non-quantitative tools, the management committee will decide between these 11 projects proposed by various upper level managers within the firm. 1.) Strategically, in order for Pan Europa foods to not become victim of a hostile takeover, it must take steps to increase their stock price. In order to do so, they have to focus on becoming more profitable, which would mean increasing their sales and gaining more market share. Critically Important Categories in Exhibit 2: - Net Income - Earnings per Share - Market Value of Shareholder’s Equity After winning the price war, Pan Europa foods made serious gains in their market share. After doing so, it should now be time for the firm to hone-in on these new market gains to increase gross sales, which have remained flat for the past couple years. With these goals in mind, Ponti, Morin, and Humbolt should be leading the way for Pan Europa Foods.
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