Practice exam 2

Brouwerij De Zwarte Zwaan (the Black Swan Brewery) is a craft brewery in an old building in Utrecht. Its website contains the following text about the future.

'We brew with passion and craftsmanship. Our ideal is beer with character, made from grain, hops and water from the region. Our team believes in honest craft. By 2030 we want to hold 8% of the Dutch market for craft beer, with a turnover of 40 million euros. We supply cafés, restaurants and specialist shops in the Netherlands and Flanders, and therefore not supermarkets. Whoever orders our beer gets beer with local ingredients, brewed in our own brewery, and a tasting in our brewery taproom where you can discover all the seasonal beers.'

In 2022 one of the brewers, outside the plan, brewed an alcohol-free beer for a colleague who had to drive. The colleagues liked it, and a supermarket chain asked whether the beer could go on its shelves. The alcohol-free beer now accounts for 30% of turnover, and a large part of it is sold in supermarkets.

The director wonders how the market will develop up to 2035. He wants a scenario analysis for the Dutch beer market and is considering as two key drivers 'stricter rules on alcohol advertising' and 'growing health awareness among consumers'. His marketing manager remarks that those two drivers 'usually go together'.

BrewBox sells coffee machines for the home that work on capsules. The machine goes over the counter for 59 euros, about cost price. The profit is in the capsules: BrewBox sells them for 40 cents, while they cost 12 cents. Customers buy the capsules in an app shop of BrewBox, which also keeps track of the orders and offers a subscription.

The market for capsule machines grew for years by 25% a year. Last year it was only 2%. The weakest brands have meanwhile disappeared and five large suppliers are left. The product is standardised: the machines closely resemble each other and mainly the price determines what the customer chooses. Large electronics chains can easily switch brand and force ever lower purchase prices.

Besides BrewBox, fifty independent coffee roasters and a few large brands make capsules that fit the machine. Many customers choose the BrewBox machine mainly because of the large range of flavours. The BrewBox format is not yet protected. The company is considering patenting it and admitting only its own capsules.

A competitor, Aroma, produces fully automated. At 100,000 machines produced, Aroma's cost price per machine is 80 euros. Each doubling of the cumulative volume lowers the cost price per machine by 20%. Aroma has meanwhile produced 400,000 machines.

Groenhart is a regional chain of twenty-two organic supermarkets in Gelderland. Prices are on average eight percent above those of regular supermarkets. Groenhart buys from 140 local growers. With twelve of them there are exclusive contracts for products that are sold nowhere else; those relationships have been built up over fifteen years on the basis of mutual trust, and employees know the growers personally. The company's own distribution centre with cold chain supplies fresh products to all stores every day. The ability to align orders, transport and store inventory every day is well developed. The financial administration is solid, but not better than that of other chains.

Large national supermarkets are now launching their own organic assortments, and meal delivery services and online platforms are entering the market. A competitor copied Groenhart's bestseller, an organic soup range, in two months. The exclusive products of the twelve growers have not been copied.

Groenhart noticed in the data of its own customer app that customers increasingly combined products that together form a meal. A team therefore tested meal boxes in three stores. When these sold well, the whole chain had them within a year, and the distribution centre was rearranged for this, with new packaging lines and adjusted delivery routes. Recording what the team had learned did not happen; the project leader has since left.

The app was built by an external IT supplier. Part of the staff on the shop floor finds the new way of working difficult. The board is considering focusing on home delivery or on more exclusive contracts.

Noorderlicht Holding from Groningen owns four companies. Noorderlicht Energie installs solar panels on the roofs of homes. Fixpunt IT builds planning software. Bakkerij Tafelbrood supplies bread products to supermarkets. Hotel De Zwaan is a hotel in the centre of Groningen. The head office has twelve employees and mainly arranges financing, central purchasing and the administration. The chief executive, whose bonus depends on the holding's revenue, took over Tafelbrood and the hotel in the past five years.

Noorderlicht Energie buys the panels from two suppliers, one of which also supplies the mounting system that was designed specially for those panels. The system does not fit other panels. The technology of the panels changes fast, and suppliers have raised the price twice within a quarter since last year. Noorderlicht Energie is considering building a factory for mounting systems itself, but has no experience with that.

The holding took over Fixpunt IT because the planning software can also improve the scheduling of Noorderlicht Energie's installation crews and both companies can use the same customer database.

Bakkerij Tafelbrood has a relative market share of 1.8 in a market that grows one percent per year. Hotel De Zwaan has a relative market share of 0.3 in a market that grows two percent per year. The head office can help the hotel with cheaper purchasing. The success factors of the hotel, however, are hospitality and local reputation, and the head office has no experience with those. For the bakery the head office has nothing special to offer, but the bakery also has no specific requirements that the head office cannot meet.

The chief executive wants to set up a central academy that trains managers of all companies, with its own series of lessons on leadership and entrepreneurship. He expects the head office to grow to thirty employees as a result.

Optivue is a Delft-based maker of precision lenses that are built into inspection machines for chip factories. The company has 300 employees and revenue of 120 million euros. The customers are mainly in Taiwan, South Korea and the United States. China accounts for 20 percent of revenue. Optivue supplies a handful of large machine builders and holds patents on its own grinding technique that competitors cannot yet copy. Production is entirely in Delft and the lenses go to customers by air freight.

Customers now ask for service and assembly closer to their factories. The management is investigating a location in Penang (Malaysia), where many suppliers of the chip industry are based, or in Hsinchu (Taiwan), close to the largest customers. In Malaysia wages are lower, a lot of English is spoken and the authorities offer tax benefits. In Taiwan the customers are there and knowledge is highest, but wages are higher and the region is sensitive to tensions with China.

The United States has tightened export rules for chip technology to China. The Netherlands follows with its own export licences. China responds with restrictions on exports of raw materials that Optivue needs. The management wants to secure profit and keep serving the customers at the same time.

CEO Pieter Aarts wants to quickly take over a local assembly company in Penang: "Then we will be operational within a year." Technical director Lin Zhao is hesitant. The Malaysian company works with different quality processes and a different management style, and Optivue's grinding knowledge sits mainly in the heads of the employees in Delft.

Meridiaan Logistiek is a Rotterdam transport company with 1,200 employees, organised in three functional departments: Operations, Sales and Finance. The company has grown in recent years through acquisitions in Germany and Poland. Each department decides for all countries, and customer requests from Poland often take weeks because Operations and Sales cannot find each other. From Poland comes the complaint that the head office people "do not understand the market".

The management set a target of a 12 percent operating margin. Revenue is 80 million euros and operating profit 6 million euros. CEO Annelies Bos wants a divisional structure with three country divisions. The investment is 6 million euros and according to the plan yields 2 million euros of extra profit per year. The French owner does ask whether the reactions of customers and unions have been investigated. Operations director Hasan Demir argues for a matrix with countries and functions, because knowledge then stays shared.

Inside the company nobody is worried. Profit is stable and the mood is good; the latest financial year ran without a crisis. Only the Polish managers notice the problems. Bos wants to implement the change in three months, with a short message in the newsletter.