Birkenshire Corporation The Pink Towels Case Study Solution

Business is presently one of the most significant food chains worldwide. It was established by Henri Birkenshire Corporation The Pink Towels in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed infants and decrease death rate.
Business is now a global company. Unlike other international business, it has senior executives from different nations and attempts to make decisions thinking about the whole world. Birkenshire Corporation The Pink Towels currently has more than 500 factories worldwide and a network spread across 86 nations.

Purpose

The function of Birkenshire Corporation The Pink Towels Corporation is to boost the lifestyle of individuals by playing its part and offering healthy food. It wants to help the world in forming a healthy and better future for it. It likewise wishes to encourage people to live a healthy life. While making sure that the company is being successful in the long run, that's how it plays its part for a much better and healthy future

Vision

Birkenshire Corporation The Pink Towels's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. Business visualizes to develop a well-trained labor force which would help the business to grow
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Mission

Birkenshire Corporation The Pink Towels's objective is that as currently, it is the leading business in the food industry, it thinks in 'Excellent Food, Great Life". Its mission is to offer its consumers with a range of options that are healthy and finest in taste. It is focused on offering the best food to its customers throughout the day and night.

Products.

Business has a large range of products that it provides to its customers. Its products include food for babies, cereals, dairy products, snacks, chocolates, food for pet and mineral water. It has around four hundred and fifty (450) factories worldwide and around 328,000 employees. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has set its objectives and goals. These objectives and goals are listed below.
• One goal of the company is to reach absolutely no landfill status. (Business, aboutus, 2017).
• Another objective of Birkenshire Corporation The Pink Towels is to waste minimum food throughout production. Frequently, the food produced is squandered 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 likewise guarantee the shipment of high quality of its items to its customers.
• Meet international standards of the environment.
• Construct a relationship based on trust with its consumers, business partners, staff members, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the strategy 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 strategy. 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%, provided in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based on the principle of Nutritious, Health and Wellness (NHW). This method deals with the concept to bringing modification in the client preferences about food and making the food things much healthier worrying about the health problems.
The vision of this technique is based upon the key method i.e. 60/40+ which simply implies that the products will have a score of 60% on the basis of taste and 40% is based upon its nutritional value. The items will be made with additional dietary value in contrast to all other products in market getting it a plus on its dietary content.
This method was adopted to bring more yummy plus nutritious foods and beverages in market than ever. In competitors with other companies, with an intent of retaining its trust over customers as Business Company has gotten more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing actual quantity of costs shows that the sales are increasing at a higher rate than its R&D spending, and enable the business to more spend on R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This sign also reveals a thumbs-up to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its costs on mergers, acquisitions and R&D advancement instead of payment of debts. This increasing financial obligation ratio pose a danger of default of Business to its investors and could lead a decreasing share prices. For that reason, in regards to increasing financial obligation ratio, the company ought to not spend much on R&D and ought to pay its current financial obligations to reduce the risk for investors.
The increasing threat of investors with increasing debt ratio and decreasing share costs can be observed by big decrease of EPS of Birkenshire Corporation The Pink Towels stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow perception building of customers. This slow development also prevent business to further 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 in the Displays D and E.

TWOS Analysis

TWOS analysis can be utilized to derive various strategies based on the SWOT Analysis given above. A quick summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business must introduce more innovative items by large amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the profit margins for the business. It could likewise supply Business a long term competitive advantage over its rivals.
The global growth of Business need to be focused on market catching of establishing nations by expansion, attracting more consumers through consumer's commitment. As establishing countries are more populous than developed countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Birkenshire Corporation The Pink Towels needs to do cautious acquisition and merger of companies, as it might affect the customer's and society's understandings about Business. It ought to obtain and merge with those business which have a market reputation of healthy and healthy companies. It would improve the perceptions of customers about Business.
Business should not just spend its R&D on innovation, rather than it needs to likewise concentrate on the R&D spending over evaluation of cost of different nutritious products. This would increase expense efficiency of its products, which will result in increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business should move to not just establishing however also to developed countries. It should expand its circle to various nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must obtain and combine with those nations having a goodwill of being a healthy business in the market. It would likewise enable the business to use its prospective resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based on 4 factors; age, gender, earnings and occupation. For instance, Business produces numerous products connected to infants i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary products. Birkenshire Corporation The Pink Towels products are rather economical by almost all levels, but its significant targeted clients, in regards to earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its existence in almost 86 countries. Its geographical segmentation is based upon 2 primary elements i.e. typical income level of the consumer in addition to the environment of the area. For instance, Singapore Business Company's segmentation is done on the basis of the weather condition of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the personality and life style of the client. For instance, Business 3 in 1 Coffee target those consumers whose lifestyle is quite hectic and do not have much time.

Behavioral Segmentation

Birkenshire Corporation The Pink Towels behavioral segmentation is based upon the attitude understanding and awareness of the consumer. For instance its extremely healthy items target those consumers who have a health conscious mindset towards their usages.

Birkenshire Corporation The Pink Towels Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand, there are two alternatives:
Alternative: 1
The Business should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the company. Nevertheless, costs on R&D would be sunk expense.
2. The business can resell the acquired units in the market, if it stops working to implement its technique. Quantity invest on the R&D might not be revived, and it will be thought about totally sunk expense, if it do not offer potential results.
3. Spending on R&D supply sluggish development in sales, as it takes long period of time to introduce a product. However, acquisitions supply fast outcomes, as it provide the business currently established product, which can be marketed not long 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 misunderstanding of customers about Business core values of healthy and nutritious products.
2 Large spending on acquisitions than R&D would send a signal of business's ineffectiveness of establishing innovative items, and would outcomes in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are currently present in the market, making business unable to present new ingenious items.
Alternative: 2.
The Business ought to invest more on its R&D instead of acquisitions.
Pros:
1. It would allow the company to produce more innovative items.
2. It would offer the business 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 used to an entirely new market sector.
4. Innovative products will supply long term advantages and high market share in long run.
Cons:
1. It would reduce the profit margins of the business.
2. In case of failure, the whole spending on R&D would be thought about as sunk cost, and would impact the company at big. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might provide an unfavorable signal to the financiers, and could result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would permit the business to introduce new ingenious products with less threat of converting the costs on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the general 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 supply the company a strong long term market position in terms of the company's total wealth in addition to in regards to innovative items.
Cons:
1. Risk of conversion of R&D spending into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Risk of misunderstanding about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Intro of less variety of innovative items than alternative 2 and high number of ingenious items than alternative 1.

Birkenshire Corporation The Pink Towels Conclusion

Business has remained the top market gamer for more than a years. It has institutionalized its strategies and culture to align itself with the market changes and client behavior, which has eventually enabled it to sustain its market share. Business has established significant market share and brand identity in the city markets, it is advised that the business must focus on the rural areas in terms of developing brand name loyalty, awareness, and equity, such can be done by developing a particular brand allowance technique through trade marketing methods, that draw clear difference between Birkenshire Corporation The Pink Towels items and other rival products. Birkenshire Corporation The Pink Towels needs to leverage its brand image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will allow the company to develop brand name equity for newly presented and already produced items on a greater platform, making the efficient usage of resources and brand image in the market.

Birkenshire Corporation The Pink Towels Exhibits