A global business research paper on the Australian wine company, Southcorp Limited.
Written in 2007; 3,172 words; 38 sources; APA; $ 91.95
Paper Summary:
This paper evaluates Southcorp Limited. It discusses the difficulties experienced by Southcorp in many areas of its management, and as a result, its large financial losses. The paper examines Southcorp's business activities and looks at the reasons for Southcorp's expansion and analyzes the problems associated with expansion. The paper explains that in an attempt to improve its results, Southcorp has re-organised its management, which includes removal of one level of middle management, and the appointment of John Ballard as Chief Executive Officer. The paper shows how Mr Ballard has implemented Project Veraison, which is designed to improve Southcorp's performance by reducing costs in 50 key areas of the business. The paper includes pie charts, maps, tables and appendices.
Outline:
General information about Southcorp Limited.
Business Activities
Reasons for Expansion: Minimising Competitive Risk, Development of Global Consumer Markets, Creating Economies of Scale, Changing Government Regulations, Technology.
Methods of Expansion: Expansion, Diversification, Foreign Direct Investment.
Issues/Problems Associated with Expansion: Social/Cultural Issues, Political Issues, Legal Issues, Economic Issues.
Success/Failure of Southcorp's Expansion Program
Financial Management: Methods of Payment, Credit Risks, Hedging, Derivatives, Insurance, Obtaining Finance
Conclusion
From the Paper:
"Southcorp began operations as an independent company in 1993, after it separated from its parent company, South Australian Brewing. Southcorp became Australia's largest wine producer in 2002. During the mid 1990s, Southcorp diversified its operations into industries such as electrical goods, water heating and packaging. These diverse operations were a financial disaster and costly to the business, and in the late 1990s Southcorp began do divest itself of all its non-wine related businesses. In February 2001 Southcorp announced an AU$1.5 billion merger/takeover with Rosemount Estates, "the most successful wine company in the world in terms of [the size of its] return on equity"3. However, the merger has been described as "nothing short of a disaster" after disappointing financial results. The Rosemount Estate brand name, for example, was revalued at only AU$340 million (AU$240 million down from before the merger), and, partly because of this, the company recorded an AU$922.9 million loss for the Financial Year ending June 30, 2003 (FY2003)."
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