Clayton Industries Case Study

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Case Analysis Report

Clayton Industries: Peter Arnell, Country Manager for Italy (HBS Case # 4199)

1. Evaluate Peter Arnell’s first two months as general manager of Clayton SpA. What are the main challenges he faces? How well is he dealing with them?

The biggest challenge Peter faces is the stagnant growth that Clayton SpA has experienced in recent years, especially with a 5.3% decline in 2008 and 19.4% drop in the first quarter of 2009 for Italy. This lack of sales directly affects receivables and inventory. Coupled with a strong union in Italy (FILM), these two forces directly contribute to the difficulty of fulfilling the 10/10/10 plan. Based on these trends, a “top four in four” years is unlikely unless SpA can …show more content…

From the company’s perspective, was Arnell the right choice to be a country manager for Clayton SpA? Why or why not?

* Arnell was the correct immediate choice for country manager. In other words, Clayton Italy needed drastic changes right away and Arnell was just the man. However, the jury is still out on whether he will have the foresight and patience needed to maintain a consistent long term plan. His military background may lead him to fast but rash decisions that may have repercussions in the future.

1. Understand the company and the situation, pay special attention to sequences of events and factual data provided in the case.

2. Identify a set of problems that are central and/or urgent to address, and possible opportunities that might have been created because of the events.

* 10/10/10 and Four for Four * Low sales in Europe and inefficient operation * Market focused on chillers in Italy with good margin only due to contracts and relationships * Must focus on commercial and residential products in Europe overall to expand market * International (American) brand image issue * Expensive vs Asian competitors * High COGS * Unionized workers – difficult to make sweeping HR decisions * Morale and PR issues

3. Identify 2-4 management and organizational behavior perspectives (e.g., perception, motivation, structure, change,

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