Performance Measurement At Thomas J. Lipton

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MEMORANDUM TO: Senior Management RE: Performance Measurement at Thomas J. Lipton DATE: April 20, 2012. Background The Thomas J. Lipton Company was originally founded in the year 1915, in New York City as a tea importing business. It was sold to Unilever by the estates of the founder- Sir Thomas Lipton, after his death in 1931. The product portfolio of the US Lipton consists of dozens of product in tea, soups, ice cream, snacks, seasonings and salad dressing. These are divided into 3 main operating divisions, namely beverages, food and General management. Tea continually contributed to over 40% of total revenues. The company plays actively in the convenience e food and instant foods markets, and went into successful collaboration with Pepsi; offering bottled, canned and fountain teas. Executive Summary The Thomas J. Lipton Company has remained high amongst the most profitable Unilever subsidiaries. The business strategy of the Thomas J. Lipton Company entails reinforcing its position as a market leader in the tea trade, and other industries where it trades. It also ensures to maintain at least its present sales levels, in sectors where growth possibilities are minimal. Sales growth has been projected to grow by 10.5% yearly and Net Profit after Tax margin is forecasted to increase to 6%. It strives to achieve a 15% after tax return on average capital invested (denoted as Assets – current Liabilities). Some of its other objectives include maintaining AA bond ratings, minimizing interest expenses on debts, and maximizing future possibilities of borrowing to enable continual growth. ANALYSIS To fully appreciate the present scenario and the implications of the restructuring exercise at the Thomas J. Lipton Company, we will give a brief recap of the product, function and organizational structure of the company. Each product line

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