Internal inefficiencies such as supplying products from plants located in different cities than from ones in same cities (because of low capacity), reduced throughput speed and increased accidents, spillage, inventory spoilage, shrinkage and breakage and production tie ups cause frequent disruptions in delivering products to the buyers that later weaken the sales.
The major external factor that has resulted in stagnation of Euroland Foods’s core business is low population growth in northern Europe. In fact, there has bee no genuine increase in the demand of products offered by Euroland because of negligible increase in market size. The sales had been static since 1998, which is attributed to market saturation in some areas besides northern Europe. Secondly, the competitors have introduced new products in the market, hence attracting more customers and taking away the share from Euroland Foods.
Euroland Foods’s, at present, apparently has adopted a Market Penetration growth strategy since it believes in selling its existing products Ice-cream, Yogurt, bottled water and fresh juices to existing market segments. It can be concluded that this strategy has not resulted in any real growth in terms of monetary and volumetric sales as it remained stagnant over years, which has adversely affected its brand equity and market valuation.
If Euroland Foods were to take Darrochs advice, it would prioritize a proposal about “replacement and expansion of truck fleet” which is aimed at substituting new trucks and delivery vehicles with new ones as well as adding new fuel-efficient excessive capacity trucks to reduce its maintenance costs and improving the ability to transport more products at a time. Also, it could accept proposals related to expanding Nuremberg plant capacity by 20%, to increase automation of the production lines at six of the companys