Colgate Palmolive Company Case Study Solution

Business is presently one of the most significant food chains worldwide. It was founded by Henri Colgate Palmolive Company in 1866, a German Pharmacist who first launched "FarineLactee"; a mix of flour and milk to feed babies and reduce death rate.
Business is now a global company. Unlike other international companies, it has senior executives from various nations and attempts to make decisions considering the entire world. Colgate Palmolive Company currently has more than 500 factories worldwide and a network spread across 86 countries.

Purpose

The purpose of Colgate Palmolive Company Corporation is to boost the lifestyle of people by playing its part and providing healthy food. It wishes 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 certain that the company is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Colgate Palmolive Company's vision is to offer its consumers with food that is healthy, high in quality and safe to eat. It wishes to be innovative and at the same time understand the requirements and requirements of its customers. Its vision is to grow fast and offer items that would please the needs of each age. Colgate Palmolive Company pictures to establish a well-trained workforce which would help the company to grow
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Mission

Colgate Palmolive Company's objective is that as currently, it is the leading business in the food industry, it thinks in 'Good Food, Great Life". Its objective is to provide its consumers with a range of choices that are healthy and finest in taste. It is focused on offering the very best food to its clients throughout the day and night.

Products.

Colgate Palmolive Company has a large range of products that it provides to its consumers. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has put down its goals and objectives. These goals and goals are listed below.
• One goal of the company is to reach no land fill status. (Business, aboutus, 2017).
• Another goal of Colgate Palmolive Company is to waste minimum food throughout production. Most often, the food produced is squandered even prior to it reaches the consumers.
• Another thing that Business is working on is to enhance its packaging in such a way that it would help it to decrease the above-mentioned issues and would likewise ensure the delivery of high quality of its items to its clients.
• Meet worldwide standards of the environment.
• Develop a relationship based on trust with its customers, business partners, employees, and federal government.

Critical Issues

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

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business technique is based upon the idea of Nutritious, Health and Health (NHW). This method deals with 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 technique is based upon the key technique i.e. 60/40+ which merely indicates that the products will have a rating of 60% on the basis of taste and 40% is based upon its dietary value. The items will be produced with additional nutritional worth in contrast to all other items in market getting it a plus on its dietary material.
This method was adopted to bring more delicious plus nutritious foods and beverages in market than ever. In competitors with other business, with an intent of retaining its trust over consumers as Business Company has actually gotten more relied on by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual amount of costs shows that the sales are increasing at a higher rate than its R&D spending, and enable the company to more spend on R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This indication likewise reveals a green light to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D development rather than payment of debts. This increasing debt ratio posture a hazard of default of Business to its financiers and might lead a decreasing share prices. For that reason, in regards to increasing financial obligation ratio, the firm must not spend much on R&D and needs to pay its current financial obligations to decrease the danger for financiers.
The increasing risk of financiers with increasing financial obligation ratio and declining share rates can be observed by huge decline of EPS of Colgate Palmolive Company stocks.
The sales development of company is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish development likewise hinder business to further 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 computations and Charts given in the Exhibits D and E.

TWOS Analysis

TWOS analysis can be used to derive different methods based upon the SWOT Analysis given above. A quick summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business needs to present more innovative items by big quantity of R&D Costs and mergers and acquisitions. It could increase the market share of Business and increase the earnings margins for the business. It could likewise provide Business a long term competitive benefit over its rivals.
The international growth of Business must be concentrated on market recording of developing nations by growth, bring in more customers through customer's commitment. As developing nations are more populous than developed nations, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Colgate Palmolive Company ought to do mindful acquisition and merger of companies, as it might impact the consumer's and society's perceptions about Business. It needs to get and combine with those business which have a market track record of healthy and nutritious companies. It would improve the understandings of consumers about Business.
Business ought to not only invest its R&D on development, rather than it should also focus on the R&D costs over examination of expense of numerous healthy products. This would increase expense effectiveness of its items, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business ought to relocate to not only establishing however also to industrialized nations. It must widens its geographical expansion. This broad geographical growth towards establishing and established nations would lower the threat of prospective losses in times of instability in numerous countries. It ought to widen its circle to different countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Colgate Palmolive Company must wisely control its acquisitions to prevent the threat of misconception from the consumers about Business. It should obtain and combine with those countries having a goodwill of being a healthy company in the market. This would not only improve the understanding of customers about Business however would likewise increase the sales, revenue margins and market share of Business. It would also allow the company to utilize its prospective resources effectively on its other operations instead of acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based on four factors; age, gender, income and occupation. Business produces a number of items related to babies i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary products. Colgate Palmolive Company products are quite inexpensive by practically all levels, however its significant targeted clients, in terms of income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its existence in nearly 86 countries. Its geographical division is based upon two main factors i.e. average earnings level of the customer as well as the environment of the area. 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 consumer. For example, Business 3 in 1 Coffee target those clients whose lifestyle is rather hectic and do not have much time.

Behavioral Segmentation

Colgate Palmolive Company behavioral segmentation is based upon the mindset knowledge and awareness of the customer. Its highly healthy products target those customers who have a health conscious mindset towards their intakes.

Colgate Palmolive Company Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are 2 choices:
Alternative: 1
The Business must invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the business. Nevertheless, spending on R&D would be sunk cost.
2. The business can resell the obtained units in the market, if it fails to execute its method. Quantity spend on the R&D might not be revived, and it will be thought about completely sunk expense, if it do not offer possible outcomes.
3. Investing in R&D supply sluggish growth in sales, as it takes long period of time to present an item. Acquisitions offer fast outcomes, as it offer the company currently established product, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the company to deal with misunderstanding of consumers about Business core worths of healthy and healthy items.
2 Large spending on acquisitions than R&D would send out a signal of business's inadequacy of developing innovative items, and would results in customer's frustration.
3. Large acquisitions than R&D would extend the line of product of the business by the products which are currently present in the market, making company not able to introduce new innovative items.
Option: 2.
The Company ought to invest more on its R&D rather than acquisitions.
Pros:
1. It would make it possible for the business to produce more innovative items.
2. It would provide the company a strong competitive position in the market.
3. It would enable the business to increase its targeted consumers by presenting those products which can be offered to a totally brand-new market segment.
4. Innovative products will supply long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the company.
2. In case of failure, the entire spending on R&D would be considered as sunk expense, and would impact the company at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of company, which might offer a negative signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would enable the business to present new innovative items with less risk of converting the costs on R&D into sunk cost.
2. It would offer a positive signal to the investors, as the overall properties of the business would increase with its significant R&D costs.
3. It would not impact the revenue margins of the business at a big rate as compare to alternative 2.
4. It would offer the company a strong long term market position in terms of the company's total wealth as well as in terms of innovative products.
Cons:
1. Danger of conversion of R&D costs into sunk expense, higher than option 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less variety of ingenious products than alternative 2 and high variety of ingenious products than alternative 1.

Colgate Palmolive Company Conclusion

Business has actually stayed the leading market player for more than a years. It has institutionalised its strategies and culture to align itself with the marketplace changes and client habits, which has actually eventually permitted it to sustain its market share. Though, Business has actually developed considerable market share and brand name identity in the city markets, it is suggested that the company must focus on the backwoods in terms of developing brand name loyalty, awareness, and equity, such can be done by creating a specific brand allocation strategy through trade marketing methods, that draw clear difference between Colgate Palmolive Company items and other competitor items. Colgate Palmolive Company needs to utilize its brand name image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other categories such as nutrition. This will enable the company to develop brand equity for newly introduced and currently produced products on a greater platform, making the effective usage of resources and brand image in the market.

Colgate Palmolive Company Exhibits