Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme Case Study Help

Case Study Solution And Analysis

Home >> Chicago Booth >> Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme >>

Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme Case Study Help

Business is presently one of the biggest food chains worldwide. It was founded by Henri Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme in 1866, a German Pharmacist who first released "FarineLactee"; a mix of flour and milk to feed babies and reduce mortality rate.
Business is now a global business. Unlike other international companies, it has senior executives from different nations and attempts to make choices thinking about the whole world. Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme presently has more than 500 factories around the world and a network spread across 86 nations.


The function of Business Corporation is to improve the quality of life of individuals by playing its part and offering healthy food. While making sure that the business is succeeding in the long run, that's how it plays its part for a much better and healthy future


Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme's vision is to supply its consumers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and simultaneously comprehend the requirements and requirements of its clients. Its vision is to grow quickly and provide products that would please the needs of each age. Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme imagines to develop a trained workforce which would help the company to grow


Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme's mission is that as currently, it is the leading business in the food industry, it thinks in 'Good Food, Great Life". Its mission is to offer its consumers with a variety of choices that are healthy and best in taste. It is focused on offering the best food to its consumers throughout the day and night.


Business has a large range of products that it uses to its clients. Its products include food for infants, cereals, dairy products, snacks, chocolates, food for pet and bottled water. It has around four hundred and fifty (450) factories worldwide and around 328,000 staff members. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Remembering the vision and mission of the corporation, the company has actually laid down its goals and goals. These objectives and goals are noted below.
• One goal of the business is to reach zero land fill status. It is pursuing absolutely no waste, where no waste of the factory is landfilled. It encourages its employees to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme is to waste minimum food throughout production. Frequently, the food produced is lost even prior to it reaches the clients.
• Another thing that Business is working on is to enhance its packaging in such a method that it would help it to decrease those issues and would likewise guarantee the delivery of high quality of its products to its consumers.
• Meet worldwide standards of the environment.
• Construct a relationship based on trust with its consumers, organisation partners, workers, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the technique 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. The target of the company is not attained as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, offered in Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business technique is based on the concept of Nutritious, Health and Health (NHW). This method deals with the idea to bringing change 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 key approach i.e. 60/40+ which just implies that the items will have a score of 60% on the basis of taste and 40% is based upon its nutritional value. The products will be produced with additional nutritional value in contrast to all other products in market getting it a plus on its nutritional material.
This technique was adopted to bring more tasty plus healthy foods and drinks in market than ever. In competitors with other companies, with an objective of maintaining its trust over consumers as Business Business has actually gotten more trusted by clients.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing real quantity of spending reveals that the sales are increasing at a greater rate than its R&D spending, and enable the company to more invest in R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This indicator likewise shows a green light to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of debts. This increasing financial obligation ratio posture a danger of default of Business to its financiers and might lead a declining share prices. In terms of increasing financial obligation ratio, the firm needs to not invest much on R&D and should pay its current financial obligations to reduce the threat for investors.
The increasing threat of financiers with increasing debt ratio and decreasing share rates can be observed by huge decrease of EPS of Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This slow development likewise impede business 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 up the Exhibitions D and E.

TWOS Analysis

TWOS analysis can be used to obtain various methods based upon the SWOT Analysis provided above. A quick summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business must present more innovative items by big quantity of R&D Costs and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the business. It might also supply Business a long term competitive advantage over its competitors.
The global growth of Business need to be concentrated on market catching of establishing countries by growth, attracting more customers through client's loyalty. As developing nations are more populous than industrialized countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisGold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme must do mindful acquisition and merger of organizations, as it could affect the client's and society's understandings about Business. It must obtain and merge with those business which have a market track record of healthy and nutritious business. It would enhance the perceptions of customers about Business.
Business should not only invest its R&D on development, instead of it should likewise concentrate on the R&D costs over examination of expense of various healthy products. This would increase expense efficiency of its items, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just establishing however likewise to developed nations. It needs to broadens its geographical expansion. This wide geographical expansion towards establishing and established nations would minimize the threat of prospective losses in times of instability in numerous countries. It ought to broaden its circle to various countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It ought to obtain and combine with those nations having a goodwill of being a healthy business in the market. It would likewise allow the business to utilize its prospective resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based upon 4 aspects; age, gender, income and profession. For example, Business produces numerous products associated with infants i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme products are rather budget-friendly by practically all levels, however its significant targeted customers, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its presence in practically 86 countries. Its geographical segmentation is based upon 2 primary factors i.e. average earnings level of the consumer as well as the climate of the area. Singapore Business Business's division is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and lifestyle of the client. Business 3 in 1 Coffee target those customers whose life design is rather hectic and don't have much time.

Behavioral Segmentation

Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme behavioral division is based upon the mindset knowledge and awareness of the customer. For example its extremely nutritious products target those customers who have a health conscious attitude towards their consumptions.

Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme Alternatives

In order to sustain the brand in the market and keep the consumer undamaged with the brand, there are two options:
Option: 1
The Company must spend more on acquisitions than on the R&D.
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the company. However, spending on R&D would be sunk expense.
2. The company can resell the gotten systems in the market, if it fails to implement its strategy. Amount spend on the R&D could not be revived, and it will be thought about entirely sunk cost, if it do not provide prospective outcomes.
3. Investing in R&D provide sluggish growth in sales, as it takes long period of time to present an item. Acquisitions supply quick outcomes, as it provide the company already developed product, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the company to face mistaken belief of consumers about Business core worths of healthy and nutritious products.
2 Big costs on acquisitions than R&D would send out a signal of business's ineffectiveness of developing innovative items, and would results in consumer's frustration too.
3. Big acquisitions than R&D would extend the line of product of the company by the products which are currently present in the market, making company not able to introduce brand-new innovative items.
Alternative: 2.
The Business should spend more on its R&D rather than acquisitions.
1. It would make it possible for the business to produce more innovative products.
2. It would supply the company a strong competitive position in the market.
3. It would allow the company to increase its targeted consumers by presenting those products which can be used to a completely brand-new market segment.
4. Ingenious products will supply long term advantages and high market share in long term.
1. It would reduce the earnings margins of the business.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would impact the business at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which could provide a negative signal to the investors, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with considerable costs on in R&D Program.
Vrio AnalysisPros:
1. It would allow the company to present new innovative items with less risk of transforming the spending on R&D into sunk cost.
2. It would provide a positive signal to the investors, as the general possessions of the business would increase with its considerable R&D spending.
3. It would not affect the earnings margins of the business at a large rate as compare to alternative 2.
4. It would provide the company a strong long term market position in regards to the business's overall wealth as well as in regards to innovative items.
1. Danger of conversion of R&D spending into sunk expense, higher than alternative 1 lower than alternative 2.
2. Threat of misconception about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less variety of innovative items than alternative 2 and high variety of ingenious items than alternative 1.

Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme Conclusion

RecommendationsIt has actually institutionalized its methods and culture to align itself with the market changes and customer behavior, which has ultimately enabled it to sustain its market share. Business has developed considerable market share and brand name identity in the city markets, it is recommended that the company needs to focus on the rural areas in terms of developing brand name commitment, awareness, and equity, such can be done by developing a specific brand name allotment technique through trade marketing strategies, that draw clear difference between Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme items and other rival items.

Gold Seal Engineering Products Pvt Ltd Challenges Facing A Developing Country Sme Exhibits

PESTEL Analysis
Governmental support

Changing requirements of worldwide food.
Boosted market share. Altering assumption towards healthier items Improvements in R&D and also QA departments.

Intro of E-marketing.
No such effect as it is favourable. Concerns over recycling.

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 5000 Highest after Company with less growth than Service 4th Lowest
R&D Spending Highest possible considering that 2003 Highest possible after Organisation 8th Cheapest
Net Profit Margin Highest considering that 2007 with fast development from 2004 to 2012 As a result of sale of Alcon in 2012. Practically equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health and wellness variable Greatest variety of brands with lasting methods Largest confectionary and also refined foods brand on the planet Largest milk products as well as bottled water brand name in the world
Segmentation Center and also top center degree customers worldwide Individual clients together with house team Any age as well as Income Customer Groups Middle as well as top center level consumers worldwide
Number of Brands 5th 1st 5th 5th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 75919 684441 771117 186636 325391
Net Profit Margin 6.72% 6.65% 93.49% 5.63% 83.95%
EPS (Earning Per Share) 82.78 6.97 2.69 7.84 52.95
Total Asset 647936 313232 431189 428653 77794
Total Debt 62424 83992 71344 26154 93141
Debt Ratio 99% 89% 15% 54% 41%
R&D Spending 7727 7296 8651 4825 5436
R&D Spending as % of Sales 8.66% 2.63% 5.27% 9.88% 7.89%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations