Renova Toilet Paper Escaping The Commoditization Trap Abridged Case Study Solution

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Renova Toilet Paper Escaping The Commoditization Trap Abridged Case Study Analysis

Business is currently one of the most significant food chains worldwide. It was founded by Henri Renova Toilet Paper Escaping The Commoditization Trap Abridged in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed infants and reduce death rate.
Business is now a global company. Unlike other international companies, it has senior executives from various countries and attempts to make decisions considering the entire world. Renova Toilet Paper Escaping The Commoditization Trap Abridged presently has more than 500 factories worldwide and a network spread across 86 nations.


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


Renova Toilet Paper Escaping The Commoditization Trap Abridged's vision is to provide its customers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and concurrently understand the requirements and requirements of its customers. Its vision is to grow quick and offer products that would satisfy the needs of each age. Renova Toilet Paper Escaping The Commoditization Trap Abridged envisions to develop a trained labor force which would help the company to grow


Renova Toilet Paper Escaping The Commoditization Trap Abridged's mission is that as presently, it is the leading business in the food market, it believes in 'Great Food, Great Life". Its objective is to provide its consumers with a range of options that are healthy and best in taste. It is focused on providing the best food to its consumers throughout the day and night.


Renova Toilet Paper Escaping The Commoditization Trap Abridged has a wide range of products that it offers to its customers. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the business has actually set its objectives and goals. These goals and objectives are noted below.
• One goal of the company is to reach no garbage dump status. (Business, aboutus, 2017).
• Another objective of Renova Toilet Paper Escaping The Commoditization Trap Abridged is to waste minimum food throughout production. Frequently, the food produced is wasted even prior to it reaches the customers.
• Another thing that Business is working on is to improve its packaging in such a method that it would help it to minimize the above-mentioned issues and would also ensure the shipment of high quality of its products to its clients.
• Meet worldwide standards of the environment.
• Build a relationship based on trust with its consumers, service partners, employees, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the technique of NHW and investing more of its profits on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW strategy. The target of the business is not attained as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business technique is based upon the idea of Nutritious, Health and Wellness (NHW). This technique handles the concept to bringing modification in the consumer preferences about food and making the food stuff healthier worrying about the health problems.
The vision of this method is based on the secret method i.e. 60/40+ which just suggests that the products will have a rating of 60% on the basis of taste and 40% is based upon its nutritional value. The items will be produced with additional dietary value in contrast to all other products in market acquiring it a plus on its nutritional material.
This strategy was adopted to bring more tasty plus healthy foods and beverages in market than ever. In competitors with other business, with an intent of retaining its trust over customers as Business Business has actually acquired more relied on by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing real quantity of spending shows 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 Earnings Margin is increasing while R&D as a percentage of sales is declining. This indicator also reveals a thumbs-up to the R&D costs, 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 debts. This increasing financial obligation ratio present a threat of default of Business to its investors and might lead a declining share costs. For that reason, in terms of increasing debt ratio, the firm needs to not spend much on R&D and ought to pay its current debts to reduce the danger for investors.
The increasing danger of financiers with increasing financial obligation ratio and decreasing share prices can be observed by substantial decline of EPS of Renova Toilet Paper Escaping The Commoditization Trap Abridged 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 growth 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 calculations and Graphs given in the Displays D and E.

TWOS Analysis

TWOS analysis can be used to obtain various techniques based upon the SWOT Analysis offered above. A quick summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business ought to introduce more innovative products by big quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the company. It might likewise offer Business a long term competitive advantage over its rivals.
The international expansion of Business should be focused on market capturing of developing countries by growth, drawing in more customers through consumer's commitment. 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 AnalysisRenova Toilet Paper Escaping The Commoditization Trap Abridged should do cautious acquisition and merger of organizations, as it might affect the client's and society's perceptions about Business. It must obtain and merge with those business which have a market track record of healthy and nutritious companies. It would enhance the understandings of consumers about Business.
Business ought to not just invest its R&D on innovation, rather than it ought to likewise concentrate on the R&D spending over assessment of cost of various nutritious products. This would increase cost efficiency of its items, which will lead to increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business ought to transfer to not just developing but also to industrialized countries. It should expands its geographical growth. This broad geographical expansion towards developing and developed countries would decrease the threat of prospective losses in times of instability in different nations. It must broaden its circle to various countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It needs to obtain and combine with those countries having a goodwill of being a healthy company in the market. It would also make it possible for the business to use its prospective resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based upon 4 factors; age, gender, earnings and occupation. Business produces a number of items related to babies i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Renova Toilet Paper Escaping The Commoditization Trap Abridged products are quite economical by almost all levels, but its major targeted customers, in terms of income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in nearly 86 countries. Its geographical division is based upon 2 primary factors i.e. average earnings level of the customer as well as the climate of the area. 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 division of Business is based upon the personality and life style of the customer. Business 3 in 1 Coffee target those customers whose life design is quite busy and do not have much time.

Behavioral Segmentation

Renova Toilet Paper Escaping The Commoditization Trap Abridged behavioral division is based upon the attitude understanding and awareness of the client. For instance its highly nutritious products target those customers who have a health mindful attitude towards their intakes.

Renova Toilet Paper Escaping The Commoditization Trap Abridged Alternatives

In order to sustain the brand name in the market and keep the consumer intact with the brand name, there are 2 options:
Option: 1
The Company must invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall assets of the business, increasing the wealth of the business. Nevertheless, costs on R&D would be sunk cost.
2. The business can resell the acquired units in the market, if it stops working to execute its technique. Nevertheless, amount spend on the R&D could not be revived, and it will be thought about entirely sunk expense, if it do not give possible results.
3. Investing in R&D supply slow development in sales, as it takes long period of time to present a product. Nevertheless, acquisitions supply fast results, as it supply the business already established item, which can be marketed not long after the acquisition.
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the company to deal with misconception of consumers about Business core values of healthy and nutritious products.
2 Large costs on acquisitions than R&D would send a signal of business's ineffectiveness of establishing innovative items, and would lead to customer's dissatisfaction too.
3. Big acquisitions than R&D would extend the line of product of the company by the products which are already present in the market, making business unable to introduce brand-new ingenious items.
Option: 2.
The Business ought to spend more on its R&D rather than acquisitions.
1. It would enable the business to produce more ingenious products.
2. It would provide the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted clients by introducing those products which can be provided to a completely brand-new market segment.
4. Innovative items will supply long term benefits and high market share in long run.
1. It would decrease the earnings margins of the company.
2. In case of failure, the entire costs on R&D would be considered as sunk expense, and would affect the company at large. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could provide a negative signal to the financiers, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the company to introduce brand-new innovative products with less danger of converting the costs on R&D into sunk cost.
2. It would offer a favorable signal to the financiers, as the overall 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 supply the business a strong long term market position in regards to the business's overall wealth in addition to in regards to ingenious products.
1. Threat of conversion of R&D spending into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Threat of misconception about the acquisitions, greater than alternative 2 and lower than option 1.
3. Introduction of less number of innovative items than alternative 2 and high variety of innovative items than alternative 1.

Renova Toilet Paper Escaping The Commoditization Trap Abridged Conclusion

RecommendationsIt has actually institutionalized its techniques and culture to align itself with the market modifications and client habits, which has actually ultimately permitted 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 must focus on the rural locations in terms of developing brand name loyalty, awareness, and equity, such can be done by creating a particular brand name allocation strategy through trade marketing strategies, that draw clear distinction between Renova Toilet Paper Escaping The Commoditization Trap Abridged items and other rival items.

Renova Toilet Paper Escaping The Commoditization Trap Abridged Exhibits

PESTEL Analysis
Governmental assistance

Changing criteria of international food.
Improved market share.
Changing understanding in the direction of much healthier products
Improvements in R&D as well as QA departments.

Introduction of E-marketing.
No such impact as it is beneficial.
Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest because 2000
Highest after Organisation with less development than Service 8th Least expensive
R&D Spending Highest possible given that 2003 Highest after Service 3rd Least expensive
Net Profit Margin Greatest because 2005 with rapid development from 2003 to 2015 Because of sale of Alcon in 2013. Virtually equal to Kraft Foods Consolidation Practically equal to Unilever N/A
Competitive Advantage Food with Nourishment and health variable Highest possible number of brand names with sustainable practices Biggest confectionary as well as processed foods brand worldwide Largest dairy products and bottled water brand worldwide
Segmentation Middle and also top center degree customers worldwide Individual clients together with household group Any age and Earnings Customer Teams Middle as well as upper center degree consumers worldwide
Number of Brands 5th 7th 1st 2nd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 76362 969643 328373 336785 658819
Net Profit Margin 5.81% 5.41% 49.37% 1.36% 87.21%
EPS (Earning Per Share) 67.86 5.64 4.57 1.16 85.25
Total Asset 544422 753251 881964 739523 22389
Total Debt 17782 76659 49231 76813 77518
Debt Ratio 54% 56% 24% 87% 88%
R&D Spending 1572 6754 6886 2728 1495
R&D Spending as % of Sales 7.61% 4.38% 6.39% 7.83% 9.23%

Renova Toilet Paper Escaping The Commoditization Trap Abridged Executive Summary Renova Toilet Paper Escaping The Commoditization Trap Abridged Swot Analysis Renova Toilet Paper Escaping The Commoditization Trap Abridged Vrio Analysis Renova Toilet Paper Escaping The Commoditization Trap Abridged Pestel Analysis
Renova Toilet Paper Escaping The Commoditization Trap Abridged Porters Analysis Renova Toilet Paper Escaping The Commoditization Trap Abridged Recommendations