Hartmann: Scope, theories and models

Résumé du document

Hartmann A/S specializes in egg packaging, but also produces industrial and other moulded-fibre packaging products. Hartmann is the dominant producer of egg packages in Europe, with a 40% market share. It has the potential to benefit from economies of scale in production and distribution, but so do its one of the biggest competitor like paper and pulp manufacturer Huhtamaki in Europe.

After top management and the chairman were replaced in 2010, and the new team was given a brief to reorganize the organization structure, the company set up a new 3 year consolidation strategy, Hartmann is aiming to strengthen market offer, operational excellence, maintain competitive cost level and to increase high value market share and capacity until 2013.

As egg demand is typically very stable, Hartmann's bottom line is mostly affected by costs and cost reduction. A major part of the production cost is the price of recycled paper, which has increased significantly recently, not least due to a high demand from China. Since the company is heavily reliable on raw material prices, loyal customers and suppliers, it is most important to keep track of the costs and ensure an efficient enterprise.

Extraits

[...] More companies are becoming aware of their responsibility towards nature and people. Hartmann is offering environmental advantages which can be integrated into our customers' marketing strategy, like having environmentally friendly symbol on the package. Hartmann moulded fibre packaging is based on recycled paper and can itself be recycled after use. Question Solvency: Hartmann's solvency ratio is calculated as 0,5 which indicates that the company is able to pay the debt to creditors even though half of the assets are lost. That is an indication of stability. [...]

[...] Acid test: Hartmann have a better relationship between current assets and current liabilities and Huhtamaki. This make Hartmann more short-term stable and have a higher chance of paying debt without selling from inventory. The profitability analysis is made on both companies and compared with each other. Through the analysis one thing keeps coming up, we can see that Hartmann is more efficient that Huhtamaki. ROA and ROS are rated higher on Hartmann and they have almost doubled ROA from the prior year. When comparing asset turnover between the two companies, Hartmann has +0,2. [...]

[...] Hartmann: Scope , theories and models Contents 1. Introduction of the company Interpretation of the questions Scope Theories and Models 5 Answers to the questions 5 Appendix 9 Introduction of the company Hartmann A/S specializes in egg packaging, but also produces industrial and other moulded-fibre packaging products. Hartmann is the dominant producer of egg packages in Europe, with a 40% market share. It has the potential to benefit from economies of scale in production and distribution, but so do its one of the biggest competitor like paper and pulp manufacturer Huhtamaki in Europe. [...]

[...] If this product where produced they would be allocating too many resources and as a result loose efficiency because the resources could be used somewhere else. The second example is a product where overhead fixed cost is and still with out any overhead variable cost. In this case the profit is negative. The mark up on 10% is in the not enough and would have to be extended. It is very problematic to have a standard setting of cost on products when a company is working with different products (simple and complex) Bibliography Literature: Management Accounting ? Anthony Atkinson, Robert Kaplan and more. [...]

[...] Getting rid of few products that provide lowest profitability, it frees up resources for products that are more profitable. The company will probably lose some of the customers but they will be also more in charge of the costs as they want to avoid from having variable costs as much as possible. After reducing 2 of the products, the company can focus its sales on the products that gives them competitive edge. Usually unique products command greater profits. Question Two examples of products are made. [...]