Summary of Johnson Limited Pte Ltd.

SYNOPSIS

The case is about a company based in the southern Indian region, named Johnson Pte Ltd. (JPL). It is a non-public listed subsidiary of a fast moving consumer goods (FMCG) that manufactured and distributed a range of products such frozen chicken, noodles, pastries, bread products, yeast and fat. It also traded in commodities such as oil. It owned a chain of restaurants and retailing outlets. Previously, JPL was wholly owned by the Indian Government for 20 years before the Hong Kong group of companies acquired 80% of the shareholdings and become the parents of the company. The objective of the acquisition is to increase its international expanded and geographically dispersed customers based in the Middle East and the Indian subcontinent states.

However, in the subsequent years of the acquisition, the company experienced declining in sales and increasing in operating cost. The chairman was appointed Azmi to become the Chief Executive Officer (CEO) of Johnson Pte Ltd. (JPL) by assigned him a task to plan and execute a turnaround programme for the company before the company’s situation get worsen.

Johnson Pte Ltd. (JPL) have to compete with Nestle and Unilever since they dominating the market. In 2007, the company had controlled 30% of the market share while Nestle and Unilever shared the balance. These rival companies invest a lot of resources for research and development, advertisement and promotion. They also spent in the range of 2-3% of their turnover to improve their market shares.

Azmi has reckoned was due to the mismanagement of inventory and account receivables as well as the poor management. Therefore, he need to find the best choice and convince the other boards on how to solve the problem.