Pan-Europa Company should consider following the suggestion of its board of directors and reduce their underlying capital spending rather than reducing the dividends of the shareholder as a way of ensuring that the stock price of the company is not devalued. By so doing, it will be possible for the company to increase the prices of their stock rather than reducing them. More importantly, achieving high stock prices will mean that the company will essentially attract more potential buyers than when the prices are relatively low. Thus, the company has a lot of obligations to fulfill to ensure that the company is successful and competitive in the market (Bruner & Opitz, 1993).
Far from that, Pan-Europa Company has also been advised by the bank to reduce its debt. Consequently, they should consider making the decision to ensure that the debt they have been incurring because of high debt to equity ratio is substantially reduced. Instead, the company should consider using the competitive advantage and goodwill that it has in the market to prevent the possibilities of running into huge debts because during money wars situations. In short, the company should reconsider its underlying approaches towards the decisions that are at hand to make things moving and boost their profit margins (Bruner & Opitz, 1993).
Morin should be entrusted to lead Pan-Europa Company to fulfill its goals and objectives because he has the innovative mindset that the company requires at the moment. Perhaps, Morin has both technical expertise and leadership creativity that will essentially lead Pan-Europa Company into the achievement of its core primary goals. On the contrary, other stakeholders in the company should also provide Morin with the support that may be required to cement competitive advantage of the company in the market. More importantly, the company should consider conducting financial analysis of all its projects and prioritize venturing into the investment activities that is likely to increase their profit margins (Bruner & Opitz, 1993).
- Bruner, R. & Opitz, C. PAN-EUROPA FOODS S.A. Darden Business Publishing (1993). Available at http://homes.ieu.edu.tr/eada/ba400_files/PAN-EUROPE%20FOODS%20S.A.ppt
