Expanding

I. – Underline the plans that are mentioned by the managing director.

“Well, I think you all know that we’re hoping to expand in China and we are going to move our headquarters from Hong Kong to Shanghai. We’re planning to manage an executive complex in Dalian and we’re also hoping to open a 240-room hotel next year in Zhongshan. We’re expecting to make a profit within 5 years although we’d like to break (пробиваться) even a bit earlier if possible. Within 10 years we want to become the major international hotel group in South-East Asia.”

– Match the verbs to their meanings.

1. hope	a. believe something will happen
2. expect	b. decide in detail what you going to do
3. plan	c. wish something will happen

II. Get information about the company and prepare a presentation of your

Investment plan, with reasons for your choices.

Valentino Chocolates

Valentino chocolates are made in Turin, Italy. They are recognized as luxury products with a delicious and unique taste. Some of Valentino’s finest chocolates are handmade and have won many international awards.

The company started by selling raw chocolate to other chocolate manufacturers. These manufacturers then used it to make their own products. Later, Valentino began selling packaged chocolates directly to the public and created the Valentino brand.

The company expanded fast. It now has almost 300 employees, 75 company-owned shops, and a turnover of 90 million. However, in the last two years, sales growth has slowed down and costs have risen. This has caused a fall in profits. The reasons for falling profits are the following:

• there is widespread price cutting in the industry;

• factory machines often break down;

• demand for its Classic Bar is falling; Valentino’s new products, biscuits and cakes, are not selling well.

The company’s owners want Valentino to become an international business. They believe it makes the finest chocolates in the world. This year they have set aside 1,5 million euro to invest in their company. Their problem is to decide how to spend the money so that the company will continue to expand. A well-known business journal did a profile of the company. It ended as follows: “Valentino can continue to grow, but only if it develops new products and finds new markets”.

The ways in which Valentino could invest the 1,5 million are listed in the chart below.

	Option	Benefit
1	Extend the factory	Increase the factory’s capacity by 30%
2	Buy new machinery	End the delays caused by the old machines breaking down
3	Invest in more research and development	Develop new products such as a low-fat chocolate drink, new biscuits/cakes
4	Buy out a local competitor	Reduce local competition
5	Establish a factory abroad	Manufacture chocolates in a new market
6	Launch a marketing campaign	Increase sales of all products
7	Finance a market survey and research trips to foreign countries	Assess the market potential for Valentino products.
8	Invest in an existing group of cafes	Become a partner in cafes which sell and promote Valentino chocolates
9	Set up online sales	Increase sales and profits