Deutsche Brauerei

* Purpose, who requested analysis

* Define the issue

* Recommendations

* Analysis (qualitative and quantitative factors)

* Plan of action (how recommendations will be implemented

DEUTSCHE BRAUEREI

* Company was owned by 16 family members (Schweitzer)

* ON THE AGENDA IN JANUARY 2001

1. Approval of the 2001 financial budget

2. Declaration of the quarterly dividend

3. Adoption of a compensation scheme for Oleg Pinchuk (the company’s sales and marketing manager)

* Deutsche Brauerei produced 2 beers (light and dark)

* Sales in 2000 were 92.1 million EURO and profit in 2000 was 2.9 million EURO (shown in Exhibit 1)

* Founded in 1737, within Schweitzer family for 12 generations

* Sold 1.173 million hectoliters in 2000, able to produce 1.2 million hectoliters per year

* Opened in Ukraine in 1998, by 2001 Ukrainian consumers accounted for 28% of sales

* Ukraine accounted for most of the growth in sales over 3 years

* In Germany Deutsche served markets through independent distributors

* IN GERMANY: Detsche paid distributors/manufacturers who paid stores/restaurants/hotels to sell their product

* Lukas Schweitzer, was on the production side (brewmaster) and recently became general manager (he knows little about management)

* Hired Pinchuk because they had very little knowledge in marketing or financing

* Many opportunities had risen in Eastern Europe due to the collapse of the Berlin wall and dissolution of the Soviet Union

* Pinchuk organized 5 distributorships, 0-211 customer accounts and set up warehousing arrangements in 30 months

* Pinchuk was helpful in putting together a financial plan in 2001 (profits and sales both increased)

* Exhibit 5: as volume increased above the Break Even Volume as did profits

* For 2002, Pinchuk has proposed that they invest in state of the art warehouse and distribution center in Ukraine; otherwise he won’t be able to sustain growth in...