Menu

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Case Study Solution

Case Study Solution And Analysis


Home >> Chicago Booth >> Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success >>

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Case Study Analysis

Business is currently one of the greatest food chains worldwide. It was founded by Henri Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success in 1866, a German Pharmacist who initially released "FarineLactee"; a combination of flour and milk to feed infants and reduce death rate.
Business is now a multinational company. Unlike other multinational companies, it has senior executives from different countries and attempts to make choices thinking about the entire world. Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success presently has more than 500 factories around the world and a network spread across 86 countries.

Purpose

The purpose of Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Corporation is to boost the lifestyle of individuals by playing its part and providing healthy food. It wants to help the world in shaping a healthy and much better future for it. It also wishes to encourage people to live a healthy life. While making sure that the business is prospering in the long run, that's how it plays its part for a much better and healthy future

Vision

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success's vision is to supply its customers with food that is healthy, high in quality and safe to eat. Business imagines to develop a well-trained workforce which would help the company to grow
.

Mission

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success's mission is that as currently, it is the leading company in the food industry, it believes in 'Excellent Food, Excellent Life". Its objective is to supply its customers with a range of choices that are healthy and best in taste. It is focused on providing the best food to its consumers throughout the day and night.

Products.

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success has a broad variety of products that it uses to its clients. In 2011, Business was listed as the most gainful organization.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has actually put down its objectives and goals. These objectives and goals are noted below.
• One objective of the business is to reach zero landfill status. It is pursuing no waste, where no waste of the factory is landfilled. It motivates its staff members to take the most out of the by-products. (Business, aboutus, 2017).
• Another objective of Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success is to lose minimum food throughout production. Most often, the food produced is lost even prior to it reaches the consumers.
• Another thing that Business is working on is to enhance its product packaging in such a way that it would help it to lower the above-mentioned issues and would likewise guarantee the shipment of high quality of its products to its customers.
• Meet international requirements of the environment.
• Develop a relationship based upon trust with its consumers, service partners, workers, and federal government.

Critical Issues

Recently, Business Business is focusing more towards the method of NHW and investing more of its revenues on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW technique. Nevertheless, the target of the business is not accomplished as the sales were expected to grow higher at the rate of 10% each year and the operating margins to increase by 20%, given up Display H. There is a need to focus more on the sales then the innovation technology. Otherwise, it might lead to the declined profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based on the idea of Nutritious, Health and Wellness (NHW). This strategy handles the idea to bringing modification in the consumer choices about food and making the food stuff healthier concerning about the health problems.
The vision of this technique is based on the secret technique i.e. 60/40+ which simply indicates that the items will have a score of 60% on the basis of taste and 40% is based on its nutritional worth. The items will be produced with extra dietary worth in contrast to all other products in market gaining it a plus on its dietary content.
This technique was embraced to bring more yummy plus nutritious foods and beverages in market than ever. In competitors with other business, with an intent of keeping its trust over clients as Business Business has acquired more relied on by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual quantity of costs shows that the sales are increasing at a higher rate than its R&D spending, and enable the company to more invest in R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is declining. This sign likewise shows a green light to the R&D costs, mergers and acquisitions.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of debts. This increasing debt ratio position a threat of default of Business to its investors and might lead a declining share rates. Therefore, in regards to increasing financial obligation ratio, the firm should not spend much on R&D and needs to pay its present financial obligations to decrease the danger for investors.
The increasing risk of financiers with increasing debt ratio and decreasing share costs can be observed by huge decrease of EPS of Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of consumers. This slow growth likewise prevent company to more invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of computations and Charts given in the Exhibits D and E.

TWOS Analysis


2 analysis can be used to obtain numerous methods based upon the SWOT Analysis given above. A short summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business ought to introduce more innovative items by big quantity of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the business. It might also offer Business a long term competitive benefit over its rivals.
The global growth of Business ought to be focused on market capturing of establishing countries by growth, drawing in more customers through consumer's loyalty. As developing countries are more populated than developed countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisCleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success needs to do cautious acquisition and merger of organizations, as it could impact the client's and society's understandings about Business. It ought to obtain and combine with those companies which have a market track record of healthy and nutritious companies. It would improve the perceptions of customers about Business.
Business must not only invest its R&D on innovation, rather than it must also focus on the R&D costs over examination of expense of various nutritious products. This would increase expense efficiency of its products, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business must move to not just establishing but likewise to developed countries. It must broaden its circle to different countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It ought to acquire and merge with those countries having a goodwill of being a healthy company in the market. It would likewise make it possible for the company to use its possible resources effectively on its other operations rather than acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on four elements; age, gender, earnings and occupation. For example, Business produces several items connected to children i.e. Cerelac, Nido, and so on and related to grownups i.e. confectionary products. Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success products are rather inexpensive by practically all levels, however its significant targeted clients, in terms of income level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is composed of its presence in practically 86 countries. Its geographical segmentation is based upon two primary elements i.e. average income level of the consumer along with the climate of the region. For example, Singapore Business Company's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the personality and lifestyle of the consumer. For example, Business 3 in 1 Coffee target those clients whose life style is rather busy and don't have much time.

Behavioral Segmentation

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success behavioral division is based upon the mindset understanding and awareness of the customer. Its highly nutritious products target those consumers who have a health conscious mindset towards their usages.

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand, there are two options:
Option: 1
The Business should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the business, increasing the wealth of the business. Nevertheless, costs on R&D would be sunk cost.
2. The company can resell the gotten units in the market, if it stops working to implement its technique. However, quantity spend on the R&D could not be revived, and it will be considered entirely sunk expense, if it do not provide prospective outcomes.
3. Spending on R&D provide sluggish growth in sales, as it takes very long time to introduce an item. Acquisitions provide fast outcomes, as it supply the business already established item, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the company to deal with misconception of customers about Business core values of healthy and healthy items.
2 Large spending on acquisitions than R&D would send out a signal of business's inefficiency of developing innovative items, and would lead to consumer's dissatisfaction too.
3. Large acquisitions than R&D would extend the product line of the company by the items which are already present in the market, making company unable to introduce new innovative products.
Alternative: 2.
The Business needs to invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the company to produce more ingenious items.
2. It would supply the company a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted clients by presenting those products which can be used to an entirely new market section.
4. Ingenious items will offer long term benefits and high market share in long term.
Cons:
1. It would decrease the earnings margins of the company.
2. In case of failure, the whole costs on R&D would be considered as sunk expense, and would affect the company at big. The risk is not in the case of acquisitions.
3. It would not increase the wealth of business, which might supply a negative signal to the investors, and might result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to present brand-new ingenious products with less threat of transforming the spending on R&D into sunk expense.
2. It would offer a positive signal to the financiers, as the general assets of the company would increase with its considerable R&D costs.
3. It would not impact the profit margins of the business at a big rate as compare to alternative 2.
4. It would provide the business a strong long term market position in regards to the business's general wealth as well as in terms of ingenious products.
Cons:
1. Risk of conversion of R&D spending into sunk cost, greater than alternative 1 lower than alternative 2.
2. Risk of misconception about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less variety of ingenious products than alternative 2 and high variety of ingenious products than alternative 1.

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Conclusion

RecommendationsIt has institutionalized its strategies and culture to align itself with the market modifications and consumer habits, which has eventually enabled it to sustain its market share. Business has developed considerable market share and brand name identity in the metropolitan markets, it is recommended that the business needs to focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by developing a particular brand name allotment technique through trade marketing strategies, that draw clear distinction in between Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success items and other competitor items.

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Exhibits

PESTEL Analysis
P
Political
E
Economic
S
Social
T
Technology
L
Legal
E
Environment
Governmental assistance

Changing criteria of global food.
Boosted market share.
Transforming assumption towards healthier products
Improvements in R&D and QA divisions.

Introduction of E-marketing.
No such influence as it is beneficial.
Problems over recycling.

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest since 6000
Highest after Company with less development than Organisation 1st Cheapest
R&D Spending Highest possible because 2007 Highest possible after Business 9th Most affordable
Net Profit Margin Highest possible given that 2008 with quick development from 2008 to 2012 Due to sale of Alcon in 2018. Nearly equal to Kraft Foods Consolidation Virtually equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as wellness aspect Highest variety of brands with lasting practices Largest confectionary and also refined foods brand on the planet Biggest dairy products and mineral water brand worldwide
Segmentation Middle and top center degree consumers worldwide Individual consumers together with family team All age and Earnings Consumer Groups Center and also top middle level customers worldwide
Number of Brands 7th 1st 5th 1st

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 46198 635317 924316 564818 349381
Net Profit Margin 3.68% 2.85% 46.99% 9.98% 46.59%
EPS (Earning Per Share) 93.79 4.75 4.22 8.94 46.12
Total Asset 251229 876671 216831 713252 96339
Total Debt 23241 82616 78862 91395 42722
Debt Ratio 98% 15% 21% 92% 98%
R&D Spending 6553 2927 9835 2248 9659
R&D Spending as % of Sales 4.17% 8.22% 7.82% 4.79% 4.22%

Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Executive Summary Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Swot Analysis Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Vrio Analysis Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Pestel Analysis
Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Porters Analysis Cleveland Cliffs Inc And Lurgi Metallurgie Gmbh The Circored Project B Turning A First Of Its Kind Iron Ore Reduction Plant Into A Commercial Success Recommendations