Log On America Case Study Analysis

Log On America is presently one of the most significant food chains worldwide. It was founded by Chicago Booth in 1866, a German Pharmacist who initially released "FarineLactee"; a combination of flour and milk to feed infants and decrease death rate. At the same time, the Page brothers from Switzerland also found The Anglo-Swiss Condensed Milk Company. The two became rivals in the beginning but later on combined in 1905, leading to the birth of Log On America.
Business is now a transnational business. Unlike other multinational companies, it has senior executives from different countries and tries to make choices considering the whole world. Log On America presently has more than 500 factories worldwide and a network spread throughout 86 countries.

Purpose

The function of Business Corporation is to improve the quality of life of people by playing its part and supplying healthy food. While making sure that the company is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Log On America's vision is to offer its consumers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and at the same time understand the needs and requirements of its consumers. Its vision is to grow quick and provide items that would please the requirements of each age group. Log On America envisions to develop a trained labor force which would help the business to grow
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Mission

Log On America's objective is that as presently, it is the leading company in the food industry, it believes in 'Great Food, Good Life". Its mission is to provide its consumers with a variety of options that are healthy and best in taste. It is focused on offering the best food to its customers throughout the day and night.

Products.

Business has a vast array of products that it provides to its customers. Its products include food for infants, cereals, dairy items, snacks, chocolates, food for pet and bottled water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 employees. In 2011, Business was noted as the most rewarding company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the business has set its objectives and objectives. These goals and objectives are listed below.
• One objective of the business is to reach zero landfill status. It is pursuing zero waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Log On America is to squander minimum food during production. Most often, the food produced is wasted even prior to it reaches the customers.
• Another thing that Business is working on is to improve its product packaging in such a method that it would help it to reduce the above-mentioned problems and would likewise guarantee the shipment of high quality of its products to its clients.
• Meet global standards of the environment.
• Build a relationship based upon trust with its customers, organisation partners, workers, and government.

Critical Issues

Just Recently, Business Company is focusing more towards the method of NHW and investing more of its revenues on the R&D innovation. The nation is investing more on acquisitions and mergers to support its NHW method. The target of the business is not attained as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business technique is based upon the concept of Nutritious, Health and Wellness (NHW). This method handles the concept to bringing modification in the consumer preferences about food and making the food things healthier concerning about the health issues.
The vision of this method is based upon the secret technique i.e. 60/40+ which merely implies 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 manufactured with additional nutritional value in contrast to all other products in market getting it a plus on its nutritional content.
This technique was embraced to bring more yummy plus healthy foods and drinks in market than ever. In competition with other companies, with an objective of retaining its trust over clients as Business Company has gained more trusted by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing actual quantity of spending reveals that the sales are increasing at a higher rate than its R&D costs, and allow the company to more spend on R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is decreasing. This indicator also reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing financial obligation ratio posture a threat of default of Business to its investors and could lead a decreasing share costs. In terms of increasing debt ratio, the company ought to not spend much on R&D and ought to pay its existing debts to decrease the threat for financiers.
The increasing risk of investors with increasing debt ratio and declining share rates can be observed by huge decrease of EPS of Log On America stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This sluggish growth likewise prevent business to additional spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of calculations and Charts given in the Exhibitions D and E.

TWOS Analysis

2 analysis can be utilized to obtain different strategies based on the SWOT Analysis given above. A short summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative products by large amount of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the profit margins for the business. It might also provide Business a long term competitive benefit over its rivals.
The worldwide growth of Business should be concentrated on market capturing of establishing countries by growth, attracting more consumers through customer's commitment. As developing nations are more populated than developed countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Log On America ought to do mindful acquisition and merger of organizations, as it could affect the consumer's and society's understandings about Business. It must obtain and merge with those companies which have a market track record of healthy and nutritious business. It would improve the understandings of customers about Business.
Business should not only spend its R&D on development, rather than it ought to likewise concentrate on the R&D costs over examination of expense of numerous nutritious items. This would increase cost efficiency of its items, which will lead to increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not just developing but likewise to developed countries. It must expand its circle to various nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine with those countries having a goodwill of being a healthy business in the market. It would also enable the business to use its possible resources effectively on its other operations rather than acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on four elements; age, gender, income and occupation. For instance, Business produces numerous items associated with babies i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Log On America items are rather budget-friendly by almost all levels, but its significant targeted consumers, in regards to earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its existence in practically 86 nations. Its geographical segmentation is based upon two main aspects i.e. average income level of the consumer along with the climate of the region. For instance, Singapore Business Business's segmentation is done on the basis of the weather condition of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and life style of the customer. Business 3 in 1 Coffee target those clients whose life design is rather hectic and do not have much time.

Behavioral Segmentation

Log On America behavioral division is based upon the mindset understanding and awareness of the customer. Its highly healthy products target those clients who have a health conscious attitude towards their consumptions.

Log On America Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand name, there are two options:
Option: 1
The Business needs to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the business. Spending on R&D would be sunk expense.
2. The business can resell the gotten units in the market, if it fails to execute its strategy. Amount invest on the R&D could not be revived, and it will be considered entirely sunk expense, if it do not give potential outcomes.
3. Investing in R&D offer sluggish development in sales, as it takes long period of time to present a product. However, acquisitions provide fast results, as it supply the company currently established product, 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 business to face mistaken belief of consumers about Business core worths of healthy and nutritious items.
2 Big spending on acquisitions than R&D would send out a signal of business's inadequacy of developing innovative products, and would results in consumer's frustration.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are already present in the market, making company unable to introduce new innovative items.
Option: 2.
The Company needs to spend more on its R&D instead of acquisitions.
Pros:
1. It would enable the business to produce more ingenious items.
2. It would offer the business a strong competitive position in the market.
3. It would enable the company to increase its targeted consumers by presenting those products which can be offered to an entirely new market segment.
4. Ingenious products will offer long term advantages and high market share in long run.
Cons:
1. It would reduce the revenue margins of the business.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would affect the company at large. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer a negative signal to the financiers, and might result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Pros:
1. It would allow the business to introduce brand-new ingenious items with less danger of transforming the spending on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the total properties of the business would increase with its substantial R&D costs.
3. It would not affect the profit 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 terms of the business's overall wealth as well as in terms of ingenious items.
Cons:
1. Threat of conversion of R&D costs into sunk cost, higher than alternative 1 lesser than alternative 2.
2. Risk of misunderstanding about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less variety of ingenious items than alternative 2 and high number of ingenious items than alternative 1.

Log On America Conclusion

It has institutionalised its techniques and culture to align itself with the market changes and customer habits, which has ultimately allowed it to sustain its market share. Business has actually developed considerable market share and brand identity in the urban markets, it is suggested that the company needs to focus on the rural locations in terms of establishing brand commitment, awareness, and equity, such can be done by producing a specific brand allocation strategy through trade marketing techniques, that draw clear difference in between Log On America products and other rival products.

Log On America Exhibits