Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Case Study Analysis

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Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Case Study Analysis

Mysore Ghee Stores Expansion Strategy For Clarified Butter Business is currently among the greatest food cycle worldwide. It was established by Chicago Booth in 1866, a German Pharmacist who first released "FarineLactee"; a mix of flour and milk to feed babies and reduce mortality rate. At the exact same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Company. The two became rivals initially however later on combined in 1905, resulting in the birth of Mysore Ghee Stores Expansion Strategy For Clarified Butter Business.
Business is now a transnational company. Unlike other international business, it has senior executives from various nations and tries to make choices considering the whole world. Mysore Ghee Stores Expansion Strategy For Clarified Butter Business currently has more than 500 factories around the world and a network spread throughout 86 countries.


The function of Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Corporation is to boost the quality of life of individuals by playing its part and offering healthy food. It wants to help the world in shaping a healthy and better future for it. It likewise wants to encourage people to live a healthy life. While making sure that the company is prospering in the long run, that's how it plays its part for a better and healthy future


Mysore Ghee Stores Expansion Strategy For Clarified Butter Business's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. Business envisions to develop a well-trained workforce which would help the business to grow


Mysore Ghee Stores Expansion Strategy For Clarified Butter Business's objective is that as presently, it is the leading business in the food market, it believes in 'Excellent Food, Good Life". Its objective is to offer its consumers with a range of choices that are healthy and best in taste also. It is focused on offering the best food to its clients throughout the day and night.


Business has a wide range of items that it provides to its clients. Its products consist of food for babies, cereals, dairy items, treats, chocolates, food for pet and mineral water. It has around 4 hundred and fifty (450) factories worldwide and around 328,000 staff members. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the business has laid down its goals and goals. These goals and objectives are listed below.
• One objective of the company is to reach zero land fill status. (Business, aboutus, 2017).
• Another goal of Mysore Ghee Stores Expansion Strategy For Clarified Butter Business is to squander minimum food during production. Most often, the food produced is wasted even prior to it reaches the clients.
• Another thing that Business is working on is to enhance its product packaging in such a way that it would help it to decrease those complications and would likewise guarantee the delivery of high quality of its items to its clients.
• Meet worldwide standards of the environment.
• Develop a relationship based upon trust with its customers, organisation partners, workers, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the strategy of NHW and investing more of its profits on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW method. The target of the business 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%, given in Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based upon the concept of Nutritious, Health and Health (NHW). This method handles the concept to bringing change in the client choices about food and making the food stuff much healthier concerning about the health concerns.
The vision of this strategy is based on the secret technique i.e. 60/40+ which merely implies that the products will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The items will be produced with additional nutritional value in contrast to all other items in market getting it a plus on its dietary content.
This method was embraced to bring more delicious plus nutritious foods and drinks in market than ever. In competition with other business, with an objective of maintaining its trust over clients as Business Company has gotten more relied on by costumers.

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing real amount of costs reveals that the sales are increasing at a greater rate than its R&D spending, and enable the company to more spend on R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indication also reveals a green light to the R&D spending, 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 financial obligations. This increasing debt ratio present a risk of default of Business to its financiers and could lead a decreasing share prices. Therefore, in regards to increasing financial obligation ratio, the firm must not invest much on R&D and should pay its current debts to reduce the danger for investors.
The increasing danger of investors with increasing financial obligation ratio and decreasing share rates can be observed by huge decrease of EPS of Mysore Ghee Stores Expansion Strategy For Clarified Butter Business stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This slow growth also prevent business to further spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Graphs given up the Exhibits D and E.

TWOS Analysis

2 analysis can be used to derive numerous techniques based on the SWOT Analysis provided above. A quick summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business must present more ingenious items by big amount of R&D Spending and mergers and acquisitions. It might increase the marketplace share of Business and increase the profit margins for the business. It could also provide Business a long term competitive advantage over its competitors.
The worldwide expansion of Business should be focused on market capturing of developing countries by growth, drawing in more clients through consumer's commitment. As developing nations are more populous than industrialized countries, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMysore Ghee Stores Expansion Strategy For Clarified Butter Business ought to do careful acquisition and merger of organizations, as it could affect the consumer's and society's understandings about Business. It must get and combine with those business which have a market credibility of healthy and nutritious business. It would enhance the understandings of customers about Business.
Business ought to not only invest its R&D on development, rather than it needs to likewise concentrate on the R&D costs over evaluation of expense of various healthy items. This would increase expense effectiveness of its items, which will lead to increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not just establishing however also to industrialized countries. It must widen its circle to different countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine with those nations having a goodwill of being a healthy business in the market. It would also allow the business to utilize its potential resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based on 4 aspects; age, gender, earnings and occupation. Business produces a number of products related to babies i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary items. Mysore Ghee Stores Expansion Strategy For Clarified Butter Business items are quite economical by nearly all levels, however its significant targeted consumers, in terms of income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its existence in almost 86 countries. Its geographical segmentation is based upon 2 main factors i.e. average income level of the consumer as well as the climate of the area. Singapore Business Company's segmentation is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and life style of the consumer. Business 3 in 1 Coffee target those consumers whose life design is rather busy and do not have much time.

Behavioral Segmentation

Mysore Ghee Stores Expansion Strategy For Clarified Butter Business behavioral division is based upon the attitude understanding and awareness of the client. Its highly healthy products target those customers who have a health conscious mindset towards their consumptions.

Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand name, there are two choices:
Alternative: 1
The Company should invest more on acquisitions than on the R&D.
1. Acquisitions would increase total properties of the company, increasing the wealth of the company. Spending on R&D would be sunk cost.
2. The business can resell the gotten systems in the market, if it stops working to implement its strategy. However, quantity spend on the R&D might not be revived, and it will be thought about completely sunk expense, if it do not give prospective results.
3. Spending on R&D supply sluggish growth in sales, as it takes very long time to present a product. Acquisitions provide fast outcomes, as it supply the business currently established item, which can be marketed quickly after the acquisition.
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the company to deal with misconception of consumers about Business core values of healthy and healthy products.
2 Big spending on acquisitions than R&D would send a signal of company's inadequacy of developing innovative items, and would results in customer's discontentment also.
3. Big acquisitions than R&D would extend the product line of the business by the items which are already present in the market, making business not able to present brand-new innovative products.
Alternative: 2.
The Business needs to spend more on its R&D rather than acquisitions.
1. It would allow the business to produce more innovative items.
2. It would supply the company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those items which can be used to an entirely brand-new market segment.
4. Innovative products will offer long term advantages and high market share in long run.
1. It would decrease the revenue margins of the company.
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 danger is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might supply an unfavorable signal to the financiers, and could result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to present new ingenious products with less risk of transforming the spending on R&D into sunk cost.
2. It would offer a favorable signal to the financiers, as the total possessions of the company would increase with its substantial R&D spending.
3. It would not impact 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 terms of the company's general wealth as well as in regards to ingenious products.
1. Threat of conversion of R&D costs into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Threat of misunderstanding about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less variety of innovative items than alternative 2 and high number of ingenious items than alternative 1.

Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Conclusion

RecommendationsIt has actually institutionalized its methods and culture to align itself with the market modifications and consumer behavior, which has eventually allowed it to sustain its market share. Business has actually established substantial market share and brand name identity in the city markets, it is suggested that the business ought to focus on the rural areas in terms of establishing brand name loyalty, awareness, and equity, such can be done by producing a particular brand allowance technique through trade marketing tactics, that draw clear difference in between Mysore Ghee Stores Expansion Strategy For Clarified Butter Business items and other rival products.

Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Exhibits

PESTEL Analysis
Governmental assistance

Altering requirements of global food.
Improved market share.
Altering understanding in the direction of much healthier products
Improvements in R&D and also QA departments.

Introduction of E-marketing.
No such effect as it is favourable.
Problems over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest since 5000
Highest possible after Organisation with much less development than Organisation 5th Lowest
R&D Spending Highest considering that 2006 Greatest after Company 6th Most affordable
Net Profit Margin Highest possible given that 2006 with quick growth from 2005 to 2011 Due to sale of Alcon in 2013. Nearly equal to Kraft Foods Consolidation Nearly equal to Unilever N/A
Competitive Advantage Food with Nourishment and also wellness aspect Highest variety of brand names with lasting practices Biggest confectionary and also refined foods brand name worldwide Biggest dairy products and also bottled water brand worldwide
Segmentation Middle and also top center level consumers worldwide Private clients in addition to household team Any age and Income Consumer Teams Center and top center degree customers worldwide
Number of Brands 8th 1st 3rd 1st

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 21377 595196 213148 699923 325241
Net Profit Margin 2.82% 2.14% 34.51% 2.59% 46.81%
EPS (Earning Per Share) 71.11 4.51 5.98 2.12 74.76
Total Asset 123812 986854 633695 457466 97566
Total Debt 22147 93637 66897 74351 89966
Debt Ratio 46% 23% 29% 35% 97%
R&D Spending 7322 7873 7981 3535 3414
R&D Spending as % of Sales 3.64% 3.87% 4.12% 4.98% 1.35%

Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Executive Summary Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Swot Analysis Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Vrio Analysis Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Pestel Analysis
Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Porters Analysis Mysore Ghee Stores Expansion Strategy For Clarified Butter Business Recommendations