Bachelor of International Sales and Marketing Management/

Professionsbachelor International Handel og Markedsfring

FOSS

Written re-exam after 1st semester

Skriftlig re-eksamen efter 1. semester

The basis for the companys sale

Virksomhedens salgsgrundlag

8 February 2012 / 8. februar 2012

08.30-14.30

This exam case consists of 4 assignments carrying the following indicative weights in the total
assessment of the paper:

Dette opgavest bestr af 4 opgaver, der indgr i bedmmelsen af den samlede

opgavebesvarelse med flgende vejledende vgte:

Assignment/Opgave 1: 20 %

Assignment/Opgave 2: 25 %

Assignment/Opgave 3: 40 %

Assignment/Opgave 4: 15 %

Re-exam/re-eksamen Page/Side 1
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Assignments: (In Danish below)

Assignment 1 (20%)

Assignment 1.1 (8%)

In the section Financial Information you will find the table FOSS A/S selected figures.
Please analyze the level and the trend in FOSS A/S selected figures and list the positive
and negative trends. For the negative trends you have to come up with some improvements
suggestions.

Assignment 1.2 (6%)

FOSS has more than 40.000 customers in 25 different countries as well as they produce and
market more than 20 products. What kind of risks can that mean to FOSS and what demand
will that give to management of their profitability?. (Justify your answer).

Assignment 1.3 (6%)

Last in the section Financial Information FOSS mention Sins of the past and point specific
that the sins have been Obsolescence for 40 mio. DKK. (products going out of fashion,
going old etc.). And they are questioning Customer Value and EBITA. (IBITA = Company's
earnings before the deduction of interest, tax and amortization).

How can FOSS improve Obsolenscence, Customer Value and EBITA and how can FOSS
measure Customer Value? (Justify your answer)

Assignment 2 (25%)
As a new executive assistant, you have been asked to draft a memorandum to the Executive
Director of FOSS. The note must be a structured analysis and assessment of FOSS
skills/competences. Make an internal memo.

Assignment 3 (40%)

Question 3.1 (15%)

It is a known fact that measures are central to any strategy. Please develop a balanced
strategic analysis for FOSS. Your analysis should be supported by information in the case as
far as it is available. You may make reasonable assumptions.

Question 3.2 (10%)

Argue for how FOSS can achieve growth with the current development opportunities. Use case
information to develop your analytical assessment. You may make reasonable assumptions.

Question 3.3 (15%)

Most companies marketing effort is focused on getting customers with little attention to
keeping them Adrian Payne.

Using part of your analysis in assignment 3.1, information available in the case and Appendix
1, outline the key issues that FOSS must focus on in order to develop its customer base and
justify why these issues are important.

Re-exam/re-eksamen Page/Side 2
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Assignment 4 (15%)
VINFRAN an organization of French wine farmers - ordered in the March 2011 1000 pieces of
FOSSs WineScan - a machine made to help wine farmers to make quality control on their
wine production. In the agreement between the parties the delivery clause was stated as DDP
Lyon (Incoterms 2010). (Lyon is a town in France). The delivery date was agreed upon as on
Saturday the 23rd April 2011. The WineScan machines were placed on a lorry in Denmark on
the 20th April 2011 but because of traffic jams in the Easter Holiday the delivery was delayed.
Delivery was made on the 25th April 2011.

During the beginning of May as the WineScan machines were installed at the farmers
premises it turned up that approximately one half of the machines were partly damaged so
they did not functioned as expected. After some investigations it was clarified that the defects
have occurred during the transportation on the lorry. Accordingly VINFRAN wanted to cancel
the whole sale, but FOSS refused.

As the dispute was not settled by agreement between the parties VINFRAN filed a court case at
the district court in Lyon. FOSS wanted as the defendant the court to dismiss the case because
such a case according to FOSSs opinion should be raised in Denmark.

Question 4.1 (3%)

Is it possible for VINFRAN to raise a court case in Lyon or should the French judge dismiss the
case?. Please give a legally justified answer to this question.

Question 4.2 (12%)

Regardless the answer in question 4.1, please give a legally justified answer how the dispute
should be solved.

Sprgsml p dansk:

Opgave 1 (20%)

Opgave 1.1 (8%)

I afsnittet Financial Information er finder du tabellen FOSS A/S selected figures. Du
bedes analysere niveauet og udviklingen i FOSS A/S selected figures samt opliste positive
og negative tendenser. Til de negative tendenser bedes du fremkomme med
forbedringsforslag.

Opgave 1.2 (6%)

FOSS nvner, at de har mere end 40.000 kunder fordelt p 25 lande, og at de producerer og
markedsfrer mere end 20 produkter. Hvilke risici kan det indebre for FOSS, samt hvilke
krav stiller det til styringen af lnsomheden i FOSS? (begrund dine svar).

Opgave 1.3 (6%)

Sidst i afsnittet Financial Information nvner FOSS Sins Of the past og angiver specifikt, at
synderne har vret Obsolescence (forldelse, ukurans) p 40 mio. DKK. samt stiller

Re-exam/re-eksamen Page/Side 3
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

sprgsmlstegn ved Customer Value og EBITA. (IBITA = Company's earnings before the
deduction of interest, tax and amortization).

Hvordan kan FOSS forbedre obsolescence, Customer Value og EBITA og hvordan kan FOSS
mle Customer Value? (Begrund dine svar)

Opgave 2 (25%)
Som nyansat direktionsassistent er du blevet bedt om at udarbejde et notat til den
administrerende direktr for FOSS. Dit notat skal vre en struktureret analyse og vurdering af
FOSS kompetencer. Lav et internt notat.

Opgave 3 (40%)
Sprgsml 3.1 (15%)
Det er et kendt faktum, at resultatml er centrale for enhver strategi. Du bedes udvikle en
balanceret strategisk analyse for FOSS. Din analyse br understttes af oplysninger fra casen
for s vidt de er tilgngelige. Du kan foretage rimelige antagelser.

Sprgsml 3.2 (10%)

Argumenter for hvordan FOSS kan opn vkst med de nuvrende udviklingsmuligheder. Brug
oplysningerne fra casen til dine analytiske vurderinger. Du kan foretage rimelige antagelser.

Sprgsml 3.3 (15%)

"De fleste virksomheders markedsfring indsats er fokuseret p at f kunder med lidt
opmrksomhed p at holde dem" Adrian Payne.

Ved brug af din analyse i opgaven 3.1 samt oplysningerne i casen og bilag 1 bedes du udpege
de ngleomrder som FOSS m fokusere p for at udvikle sit kundegrundlag og begrund
hvorfor de nvnte omrder er vigtige.

Opgave 4 (15%)
VINFRAN - en organisation af de franske vinbnder - bestilte i marts 2011 1000 stykker af
FOSS er WineScan - en maskine lavet for at hjlpe vinbnder til at foretage kvalitetskontrol
p deres vinproduktion. I aftalen mellem parterne var leverance klausulen angivet som "DDP
Lyon (Incoterms 2010)". (Lyon er en by i Frankrig). Leveringsdato blev aftalt som "lrdag den
23. april 2011". WineScan maskinerne blev placeret p en lastbil i Danmark den 20. april
2011, men p grund af trafikpropper i pskeferien blev leverancen er forsinket. Levering blev
foretaget den 25. april 2011.

I begyndelsen af majl viste det sig efterhnden som WineScan maskiner blev installeret hos
landmndene, at cirka halvdelen af maskinerne var beskadiget, s de ikke fungerede som
forventet. Efter nogle undersgelser blev det fastlagt, at manglerne var opstet under
transporten p lastbilen. Derfor nskede VINFRAN at ophve hele salget, men FOSS afslog.

Da uenigheden ikke blev lst ved aftale mellem parterne, indgav VINFRAN en retssag ved
byretten i Lyon. FOSS nskede som sagsgt, at retten skulle afvise sagen, da en sdan sag

Re-exam/re-eksamen Page/Side 4
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

efter FOSS opfattelse skulle rejses i Danmark.

Sprgsml 4.1 (3%)

Er det muligt for VINFRAN at rejse en retssag i Lyon, eller skal den franske dommer afvise
sagen. Giv et juridisk begrundet svar p dette sprgsml.
Sprgsml 4.2 (12%)
Uanset svaret i sprgsml 4.1 giv et juridisk begrundet svar p, hvordan uenigheden skal
lses.

FOSS in brief1

About 1.200 employees world wide

Sales and service companies in more than 20 countries
More than 75 dedicated distributors around the world
Headquarters in Denmark
Revenue close to 200 mill. EUR last year
98 percent of FOSS business is generated outside Denmark

Source to the following presentation: www.top1000.dk

About FOSS
FOSS is the worlds leading provider of analytical instruments for the food, agricultural,
chemical and pharmaceutical industries. Today, 85% of the worlds milk production, 80% of
grain traded on the world market and 75% of the worlds beer production is tested using FOSS
analytical solutions.

A cornerstone of the companys vision statement is: To contribute to the rational use of our
planets natural resources and thus to the nutrition and health of the world.

An international and dynamic working environment with good opportunities to develop

professionally and personally. At FOSS we value our employees. Cooperation based upon
confidence, straightforward communication and clear objectives gives job satisfaction and good
colleagues. We wish to motivate our employees to take responsibility and have influence over
their work. We recognise the significance of our role in creating truly sustainable products. We
embrace our responsibility as a company, as a leader and as an innovator to contribute to
a brighter future for all.

History
FOSS was founded in 1956 as N. Foss Electric A/S by Nils Foss. The business idea was to
automate otherwise time-consuming analytical methods and thereby offer a fast and cost
efficient method of analysis a principle that still holds true today.

The Family owned FOSS group is the world leader as supplier of dedicated, high tech analytical
solutions which measure and control the quality and production of agricultural, food,
pharmaceutical and chemical products, which supports the best utilization of food products

1
Source: www.foss.dk

Re-exam/re-eksamen Page/Side 5
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

and at the same time ensures a high standard of foods safety and quality. Headquarter is
domiciled in Hillerd, Denmark. The products are marketed by 23 FOSS sales and service
companies around the world together with an extensive global net of distributors. FOSS works
diligently with innovation and development as basis for its growth. It is reflected in the fact
that the company has taken more than 100 international patents and that more than 200 of
the 1200 employees in FOSS work within Research & Development departments in Scandinavia
and USA.

The first instruments were developed to test moisture in grain. These were followed by
analytical solutions for the dairy industry a major business area for FOSS alongside a
growing range of other application areas, including the analysis of meat, edible oils and wine.

In 1997, FOSS acquired Perstorp Analytical AB, which included TecatorAB and NIRSystems Inc.
This added substantial strength in reference analysis methods and in grain, flour, feed, beer
and pharmaceutical segments. The merger positioned FOSS as a leader in analytical solutions
within the food, agriculture, pharmaceutical and chemical industries.

Organisation
The organisation structure is rather flat and consists of the following departments:
1. Management
2. Sales & Support
3. Customer Support
4. Marketing
5. Administration

Sales & Support

The sales team consists of Area Sales Managers, Product Specialists, Application Specialists
and Sales Support. In close cooperation with the customer the Product Specialists and
Application Specialists will look for a specific solution that suits the customer best in order to
tackle the customers problem. In this process they can rely on an impressive range of
techniques, for example: Fourier Transform Infrared Spectroscopy, Near Infrared
Spectroscopy, Flow Cytometry, Enzymatic Assays, differential pH-metry, Microbiology and
Automated Wet Chemistry for parameters like fat, protein, nutrients and fibers.

After delivery we take care of a successful implementation and training of the FOSS solution.
Once the customer starts working on his own, our Application Specialists and Service team are
ready for effective support.

Our Sales Support provides you with information, documentation and quotations of the
product(s) of your interest.

Service
Our customers need the highest levels of service and support in order to be able to realise
their objectives in this competitive world.

To meet our customers demands we have a highly trained team of Service Engineers
available, who is eager to install, maintain and repair your FOSS products.

Re-exam/re-eksamen Page/Side 6
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Services:
Preventive Maintenance Repairs
Delivery of spare parts, consumables and accessories
Maintenance agreements
Revisions

Marketing
Proactively driving new product launch and promotion activities, including representing FOSS
at international Feed/NIR congresses and exhibitions.

Foss Marketing is leading a global FOSS competence team of Feed & Forage industry sales
people.

The department is developing FOSS' Feed calibration strategy, incl. establishing strategic
customer partnerships.

Development and maintenance of FOSS' global Feed sales training programs.

Working with key customers and managing relationships with Feed industry opinion leaders.

Customers
More than 40.000 customers world-wide including nearly all top 100 global companies within
food and agriculture as well as mid-size and smaller businesses. For instance, a leading food
company uses FOSS NIR analysers for consistent analysis of chemical constituents across 27
manufacturing sites, ensuring that their brand name products taste the same world-wide.

From FOSS A/S annual report 2010:

Re-exam/re-eksamen Page/Side 7
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Business areas

Analytical laboratories
Wet chemistry forms the basis of greatly improved reference methods of analysis developed by
FOSS. The radically improved Kjeldahl2 wet chemistry reference methods perform dual roles
and dramatically cut laboratory time and costs.

Beer
FOSS is your partner when you need excellence in routine analysis of beverage production.
Applications range from classical wet chemistry Kjeldahl protein to fully automatic analysis of
all the basic parameters of wort/beer or spirits.

Biofuel
World demand for fuel ethanol is skyrocketing and biofuel producers are adding capacity at a
ferocious rate. In a situation where demand exceeds supply increased efficiency and yield
translate directly into higher profits.

2
Method for analyzing nitrogen in organic substances.

Re-exam/re-eksamen Page/Side 8
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Chemicals
Analytical solutions for Chemicals, Nutraceuticals, Petrochemicals, Pharmaceuticals, Polymers
& Plastics, Pulp & Paper, Textiles and Tobacco.

Confectionery
For confectionery producers, FOSS has analytical solutions all the way from quality check of
raw products to finished and semi-finished products and of course microbiological tests all
along the value chain.

Feed and forage

All around the world today, government bodies and consumers alike are increasingly
demanding higher standards in all aspects of feed production. To meet these demands while at
the same time ensuring continued profitability feed producers needs to have ready access to
precise, reliable data to control their processes.

Flour
Like every other industry, milling is subject to increased market pressures. Customers demand
consistent quality and product variety while production efficiency must be maintained if not
improved. A FOSS solution can prove an important ally in walking such a tightrope.

Grain
FOSS is your partner when you need excellence in grain analysis. Our experience and expertise
in automated grain quality analysis is long and proven.

Meat
FOSS has been partner for meat companies around the world for many years. Our goal is to
support meat companies in optimizing their production by focusing on control and quality
assurance from raw material to finished products.

Microbiology
In a food processing plant, microbiological testing is an essential factor to assure and
document the best possible safety and quality of consumer products.

Milk and dairy

FOSS has been partner for dairies and milk testing laboratories around the world for more than
30 years. Our common goal has been to optimise the dairy business by focusing on control and
quality assurance at all stages along the "Milky Way".

Pet food
An increased focus on our pets health and welfare makes it essential that the pet food
complies to specifications ensuring good nutrition as well as prevention and treatment of cat
and dog diseases.

Pharmaceuticals
Analytical solutions for Chemicals, Nutraceuticals, Petrochemicals, Pharmaceuticals, Polymers
& Plastics, Pulp & Paper, Textiles and Tobacco.

Vegetable oils and fats

Whether you work in oil crushing, the edible oils refinery business or with traditional
production of olive oil, FOSS solutions provide information on key parameters of your

Re-exam/re-eksamen Page/Side 9
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

vegetable oil helping you to control production for optimal quality and profit.

Water and soil

FOSS supplies a complete range of water and soil analysis systems that offer a unique degree
of application flexibility. Partially to fully automated systems can be tailored exactly to your
analyte range, workload and budget while maintaining the potential of expanding as your lab
grows.

Wine
Over-production of wine in many regions has led to increased competition and a growing
demand for quality wine at the right price. Improving initial grape-quality and optimising the
production process have become key objectives for wine producers seeking to keep their
competitive edge.

Cooperation with universities

Foss takes pride in a long tradition of collaboration with a number of prestigious universities in
Scandinavia including:

Faculty of Engineering, Lund University

Stockholm University

Technical University of Denmark (DTU)

Faculty of Life Sciences, University of Copenhagen

IT university of Copenhagen

Copenhagen Business School (CBS)

Re-exam/re-eksamen Page/Side 10
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Financial information

FOSS is a privately-owned company with a solvency ratio of 75% FOSS has been awarded
the AAA diploma rating for the highest credit rating in D&B's rating scale.

Re-exam/re-eksamen Page/Side 11
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

FOSS A/S selected figures

in 1.000 EUR Year
Income statement: 2006 2010 index
Revenue 183.362 201.060 110
Production costs 48.971 50.451 103
Gross profit 134.391 150.609 112
Other external expenses 36.796 34.510 94
Staff expenses 65.853 78.039 119
Depreciation 5.677 3.017 53
EBITA 26.065 35.043 134

Balance:
Total assets 193.774 258.735 134
Inventories 22.307 26.644 119
Trade receivables 44.453 40.426 91
Trade payables 7.949 8.670 109
Equity 147.240 193.602 131

Number of Employees 1.084 1.136 105

Re-exam/re-eksamen Page/Side 12
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Re-exam/re-eksamen Page/Side 13
 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Sins of the past, a slide from Fosss latest company presentation:

Customer Service Packages (Appendix 1)

FossCare

Reliable service and support is an investment that quickly repays itself as you gain from having
a perfectly running FOSS solution, day after day and year after year.

Choose the right level of support from a range of packages and enjoy a consistent level of care
without risk of unexpected costs.

PM plans = Optimize uptime and performance

Priority Repair Services = Increased instrument availability

Certified Parts = Increased instrument life time and peak performance

Remote connection = Mosaic asset management solution

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 Bachelor of International Sales and Marketing Management/
Professionsbachelor International Handel og Markedsfring

Platinum Gold Silver Bronze

Duration 1-3 Yrs 1-3 Yrs 1-3 Yrs 1-3 Yrs

Scheduled PM visits* 2 2 2 1

Additional PM visits Optional Optional Optional

On-site response time 24h 48h 72h Priority

Travel expenses for unplanned visits Yes Yes

On-site labour for unplanned visits Yes Yes

Service spares for repairs Yes

Phone support (business hours)** Unlimited 6h 4h 3h

Software maintenance support Yes Yes Yes Yes

Instrument safety checks Yes Yes Yes Yes

Each FossCare contract includes standard elements. These can be provided by all FOSS
subsidiaries worldwide. In addition, each of our subsidiaries offers local complementary
FossCare services for selected instruments depending on local market requirements.

For further information about the right service agreements for your FOSS solution, please
contact your local FOSS representative.

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