Preventing Another Madoff Reengineering The Secs Investigation Process Case Study Solution

Case Study Solution And Analysis

Home >> Chicago Booth >> Preventing Another Madoff Reengineering The Secs Investigation Process >>

Preventing Another Madoff Reengineering The Secs Investigation Process Case Study Solution

Business is presently one of the most significant food chains worldwide. It was established by Henri Preventing Another Madoff Reengineering The Secs Investigation Process in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed infants and decrease mortality rate.
Business is now a multinational company. Unlike other international business, it has senior executives from different nations and attempts to make decisions thinking about the entire world. Preventing Another Madoff Reengineering The Secs Investigation Process currently has more than 500 factories around the world and a network spread across 86 nations.


The purpose of Business Corporation is to enhance the quality of life of individuals by playing its part and providing healthy food. 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


Preventing Another Madoff Reengineering The Secs Investigation Process's vision is to supply its clients with food that is healthy, high in quality and safe to consume. Business visualizes to establish a well-trained labor force which would help the company to grow


Preventing Another Madoff Reengineering The Secs Investigation Process's objective is that as currently, it is the leading business in the food industry, it believes in 'Excellent Food, Good Life". Its objective is to provide its customers with a variety of choices that are healthy and finest in taste. It is focused on supplying the best food to its clients throughout the day and night.


Business has a wide range of items that it offers to its clients. Its items consist of food for infants, cereals, dairy items, snacks, chocolates, food for family pet and mineral 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 company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the business has put down its goals and objectives. These goals and objectives are noted below.
• One goal of the business is to reach no landfill status. It is working toward no waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Preventing Another Madoff Reengineering The Secs Investigation Process is to waste minimum food throughout production. Usually, the food produced is squandered even prior to it reaches the clients.
• Another thing that Business is dealing with is to enhance its product packaging in such a way that it would help it to minimize those problems and would also ensure the shipment of high quality of its items to its clients.
• Meet worldwide requirements of the environment.
• Build a relationship based on trust with its customers, organisation partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the technique of NHW and investing more of its earnings on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW strategy. However, the target of the business is not attained as the sales were anticipated to grow greater at the rate of 10% each year and the operating margins to increase by 20%, given in Exhibit H. There is a need to focus more on the sales then the innovation technology. Otherwise, it might lead to the decreased revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business method is based on the principle of Nutritious, Health and Wellness (NHW). This strategy deals with the concept to bringing modification in the client choices about food and making the food things much healthier concerning about the health concerns.
The vision of this strategy is based upon the key technique i.e. 60/40+ which just indicates that the items will have a rating of 60% on the basis of taste and 40% is based on its nutritional value. The products will be made with additional dietary value in contrast to all other items in market gaining it a plus on its dietary material.
This method was embraced to bring more yummy plus healthy foods and drinks in market than ever. In competition with other companies, with an intention of keeping its trust over clients as Business Company has actually gained more trusted by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing actual quantity of costs reveals that the sales are increasing at a greater rate than its R&D spending, and allow the business to more spend on R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is decreasing. This indication 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 hazard of default of Business to its financiers and could lead a declining share prices. Therefore, in regards to increasing debt ratio, the firm should not invest much on R&D and needs to pay its existing financial obligations to reduce the threat for financiers.
The increasing danger of investors with increasing financial obligation ratio and declining share costs can be observed by big decline of EPS of Preventing Another Madoff Reengineering The Secs Investigation Process stocks.
The sales development of company is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This sluggish development also hinder business to additional invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Graphs given up the Displays D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain numerous techniques based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business ought to present more ingenious items by big amount of R&D Spending and mergers and acquisitions. It could increase the marketplace share of Business and increase the earnings margins for the business. It might also supply Business a long term competitive advantage over its rivals.
The global expansion of Business need to be concentrated on market catching of developing countries by growth, bring in more clients through customer's loyalty. As developing nations are more populous than industrialized nations, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisPreventing Another Madoff Reengineering The Secs Investigation Process should do cautious acquisition and merger of organizations, as it might affect the customer's and society's perceptions about Business. It ought to get and combine with those companies which have a market reputation of healthy and healthy business. It would enhance the understandings of consumers about Business.
Business should not just spend its R&D on innovation, instead of it should also concentrate on the R&D spending over assessment of cost of various healthy products. This would increase expense effectiveness of its items, which will lead to increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just developing but likewise to industrialized countries. It needs to widens its geographical growth. This wide geographical expansion towards developing and developed countries would minimize the risk of possible losses in times of instability in numerous nations. It must expand its circle to various countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It needs to obtain and combine with those countries having a goodwill of being a healthy business in the market. It would also allow the business to use its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based upon four factors; age, gender, earnings and profession. Business produces several items related to children i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary products. Preventing Another Madoff Reengineering The Secs Investigation Process products are quite budget friendly by almost all levels, but its major targeted consumers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its presence in almost 86 countries. Its geographical segmentation is based upon two main factors i.e. typical income level of the customer along with the environment of the region. For example, Singapore Business Company's segmentation is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and lifestyle of the consumer. For instance, Business 3 in 1 Coffee target those consumers whose lifestyle is rather busy and do not have much time.

Behavioral Segmentation

Preventing Another Madoff Reengineering The Secs Investigation Process behavioral segmentation is based upon the attitude knowledge and awareness of the customer. For instance its extremely healthy items target those clients who have a health conscious mindset towards their usages.

Preventing Another Madoff Reengineering The Secs Investigation Process Alternatives

In order to sustain the brand in the market and keep the customer intact with the brand, there are two options:
Alternative: 1
The Business ought to spend more on acquisitions than on the R&D.
1. Acquisitions would increase overall possessions of the business, increasing the wealth of the business. Costs on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it fails to execute its strategy. However, quantity spend on the R&D could not be revived, and it will be considered totally sunk cost, if it do not offer potential results.
3. Investing in R&D supply sluggish development in sales, as it takes long period of time to introduce an item. Acquisitions provide fast results, as it provide the company currently developed product, which can be marketed soon after the acquisition.
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to deal with misunderstanding of consumers about Business core values of healthy and healthy products.
2 Big costs on acquisitions than R&D would send out a signal of company's ineffectiveness of developing innovative products, and would results in customer's dissatisfaction too.
3. Big acquisitions than R&D would extend the line of product of the business by the items which are already present in the market, making company unable to introduce brand-new ingenious items.
Alternative: 2.
The Business needs to invest more on its R&D rather than acquisitions.
1. It would allow the business to produce more ingenious products.
2. It would supply the company a strong competitive position in the market.
3. It would enable the business to increase its targeted clients by introducing those items which can be provided to a totally new market section.
4. Ingenious products will offer long term benefits and high market share in long term.
1. It would reduce the earnings margins of the business.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would impact the company at big. The danger 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 might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to present brand-new ingenious items with less danger of transforming the spending on R&D into sunk cost.
2. It would offer a positive signal to the financiers, as the overall possessions of the company would increase with its considerable R&D costs.
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 business a strong long term market position in regards to the business's overall wealth as well as in regards to ingenious items.
1. Danger of conversion of R&D spending into sunk cost, higher than alternative 1 lesser than alternative 2.
2. Risk of mistaken belief about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Introduction of less variety of ingenious items than alternative 2 and high number of ingenious products than alternative 1.

Preventing Another Madoff Reengineering The Secs Investigation Process Conclusion

RecommendationsIt has actually institutionalised its methods and culture to align itself with the market changes and consumer behavior, which has ultimately permitted it to sustain its market share. Business has established considerable market share and brand identity in the city markets, it is suggested that the business should focus on the rural areas in terms of developing brand name loyalty, awareness, and equity, such can be done by producing a particular brand name allotment method through trade marketing techniques, that draw clear difference between Preventing Another Madoff Reengineering The Secs Investigation Process items and other competitor items.

Preventing Another Madoff Reengineering The Secs Investigation Process Exhibits

PESTEL Analysis
Governmental support

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

Intro of E-marketing.
No such impact as it is favourable. Worries over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 3000 Highest after Business with less development than Company 6th Cheapest
R&D Spending Greatest given that 2004 Highest after Business 5th Lowest
Net Profit Margin Highest since 2009 with fast development from 2002 to 2013 Due to sale of Alcon in 2015. Nearly equal to Kraft Foods Unification Virtually equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as health aspect Greatest number of brands with lasting methods Largest confectionary and also processed foods brand worldwide Largest milk products and bottled water brand name on the planet
Segmentation Center as well as top middle degree consumers worldwide Specific customers in addition to house group Every age as well as Earnings Consumer Groups Center as well as top middle degree customers worldwide
Number of Brands 4th 2nd 3rd 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 44934 771219 629843 928995 799617
Net Profit Margin 7.51% 8.15% 31.73% 2.56% 68.45%
EPS (Earning Per Share) 55.83 2.16 1.65 7.35 65.48
Total Asset 499565 544432 563915 827832 96296
Total Debt 61329 73281 78122 95321 84697
Debt Ratio 83% 56% 84% 33% 26%
R&D Spending 7564 6112 2865 5376 1211
R&D Spending as % of Sales 5.79% 7.41% 5.95% 9.86% 2.62%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations