Case Analysis
JOHNSON TURNAROUND CASE
Problem Statement
Johnson Pte Ltd is experiencing decline sales and increasing operating cost.
Background of the case
The case is about a company based in southern Indian region, named Johnson Pte Ltd, (JPL). It a non-public listed firm operating in Fast Moving Consumer Goods Industry, (FMCG). The company manufactures and distribute products which include frozen Chicken, Noodles, pastries, bread products, yeast and fat. Also the company owned a number of restaurants and retailing outlets and it deals in trading of oil products as well. It was initially owned by Government of India, has operated 20years in this industry (FMCG), before Hong Kong group of companies acquired 80 percent equity share to become its parent company. The acquisition was in line with the Hong Kong group of companies’ strategic objective of expanding their business operations globally and to reach it targeted customers in Middle East and Indian subcontinent states.
In subsequent years after the acquisition, the company experienced steady decline in sales and increasing operating cost. In November 2009, Encik Azmi was employed as the chief executive officer (CEO) of JPL. His appointment was facilitated by the Chairman of the group with the task of salvaging the company by constituting a turnaround strategy that will facilitate the revitalizing and sustainability of the company’s before the situation get worsen.
JPL is among the major players in FMCG industry in India, with other contenders like Nestle and Unilever dominating the market. In 2007, JPL controlled 30% market share while Nestle and Unilever shared the balance. These rival companies invest lot of resources for research and development, advertisement and promotion. Also they spend 2% to 3% of their revenues to maintain their market. The industry is flooded with multiple labels due to low entry barriers, also the consumers are knowledgeable as they patronise quality products and this has led the
Problem Statement
Johnson Pte Ltd is experiencing decline sales and increasing operating cost.
Background of the case
The case is about a company based in southern Indian region, named Johnson Pte Ltd, (JPL). It a non-public listed firm operating in Fast Moving Consumer Goods Industry, (FMCG). The company manufactures and distribute products which include frozen Chicken, Noodles, pastries, bread products, yeast and fat. Also the company owned a number of restaurants and retailing outlets and it deals in trading of oil products as well. It was initially owned by Government of India, has operated 20years in this industry (FMCG), before Hong Kong group of companies acquired 80 percent equity share to become its parent company. The acquisition was in line with the Hong Kong group of companies’ strategic objective of expanding their business operations globally and to reach it targeted customers in Middle East and Indian subcontinent states.
In subsequent years after the acquisition, the company experienced steady decline in sales and increasing operating cost. In November 2009, Encik Azmi was employed as the chief executive officer (CEO) of JPL. His appointment was facilitated by the Chairman of the group with the task of salvaging the company by constituting a turnaround strategy that will facilitate the revitalizing and sustainability of the company’s before the situation get worsen.
JPL is among the major players in FMCG industry in India, with other contenders like Nestle and Unilever dominating the market. In 2007, JPL controlled 30% market share while Nestle and Unilever shared the balance. These rival companies invest lot of resources for research and development, advertisement and promotion. Also they spend 2% to 3% of their revenues to maintain their market. The industry is flooded with multiple labels due to low entry barriers, also the consumers are knowledgeable as they patronise quality products and this has led the