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Corporate New Ventures At Procter Gamble Case Study Solution

Business is presently one of the most significant food chains worldwide. It was founded by Henri Corporate New Ventures At Procter Gamble in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and reduce mortality rate.
Business is now a global business. Unlike other international companies, it has senior executives from various nations and tries to make decisions considering the whole world. Corporate New Ventures At Procter Gamble presently has more than 500 factories worldwide and a network spread throughout 86 nations.


The function of Business Corporation is to boost the quality of life of people by playing its part and offering healthy food. While making sure that the company is prospering in the long run, that's how it plays its part for a much better and healthy future


Corporate New Ventures At Procter Gamble's vision is to offer its customers with food that is healthy, high in quality and safe to eat. It wants to be ingenious and simultaneously understand the needs and requirements of its customers. Its vision is to grow quickly and supply products that would please the needs of each age. Corporate New Ventures At Procter Gamble pictures to develop a trained workforce which would help the company to grow


Corporate New Ventures At Procter Gamble's mission is that as presently, it is the leading company in the food industry, it thinks in 'Excellent Food, Great Life". Its objective is to offer its customers with a variety of choices that are healthy and finest in taste. It is focused on supplying the best food to its consumers throughout the day and night.


Corporate New Ventures At Procter Gamble has a broad range of products that it offers to its clients. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has put down its objectives and objectives. These objectives and objectives are listed below.
• One objective of the company is to reach no land fill status. It is pursuing zero waste, where no waste of the factory is landfilled. It motivates its staff members to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Corporate New Ventures At Procter Gamble is to squander minimum food during production. Frequently, the food produced is lost even before it reaches the customers.
• Another thing that Business is dealing with is to improve its packaging in such a way that it would help it to decrease the above-mentioned problems and would likewise guarantee the shipment of high quality of its products to its clients.
• Meet worldwide standards of the environment.
• Build a relationship based upon trust with its customers, business partners, staff members, and federal government.

Critical Issues

Just 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. The target of the company is not accomplished as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, offered in Display H. There is a requirement to focus more on the sales then the innovation technology. Otherwise, it may result in the decreased revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business strategy is based upon the idea of Nutritious, Health and Wellness (NHW). This technique deals with the idea to bringing modification in the consumer preferences about food and making the food things healthier worrying about the health problems.
The vision of this strategy is based on the secret method i.e. 60/40+ which simply implies that the items will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The products will be manufactured with extra dietary worth in contrast to all other items in market getting it a plus on its nutritional material.
This strategy was embraced to bring more tasty plus nutritious foods and drinks in market than ever. In competitors with other business, with an intention of retaining its trust over consumers as Business Business has actually acquired more relied on by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing real quantity of costs shows that the sales are increasing at a higher rate than its R&D spending, and allow the company to more invest in R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indicator likewise reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing debt ratio pose a hazard of default of Business to its investors and could lead a decreasing share prices. Therefore, in regards to increasing financial obligation ratio, the company needs to not spend much on R&D and must pay its existing debts to decrease the risk for investors.
The increasing risk of investors with increasing debt ratio and declining share costs can be observed by big decrease of EPS of Corporate New Ventures At Procter Gamble stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow growth also hinder company to further invest in 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 up the Exhibits D and E.

TWOS Analysis

2 analysis can be used to obtain various strategies based upon the SWOT Analysis given above. A brief summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business should introduce more innovative items by large amount of R&D Costs and mergers and acquisitions. It might increase the marketplace share of Business and increase the earnings margins for the company. It might also offer Business a long term competitive benefit over its competitors.
The global expansion of Business need to be focused on market recording of developing nations by growth, attracting more consumers through consumer's commitment. As establishing nations are more populous than industrialized nations, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisCorporate New Ventures At Procter Gamble must do cautious acquisition and merger of organizations, as it could impact the consumer's and society's understandings about Business. It should get and combine with those companies which have a market track record of healthy and healthy companies. It would improve the perceptions of customers about Business.
Business needs to not just invest its R&D on innovation, instead of it needs to also concentrate on the R&D costs over evaluation of expense of different nutritious items. This would increase cost efficiency of its products, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just establishing however likewise to developed nations. It should broaden its circle to numerous countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It ought to get and combine with those nations having a goodwill of being a healthy business in the market. It would also make it possible for the business to utilize 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 division of Business is based upon 4 aspects; age, gender, earnings and occupation. For example, Business produces several items associated with babies i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary products. Corporate New Ventures At Procter Gamble items are quite cost effective by almost all levels, but its major targeted consumers, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in practically 86 nations. Its geographical segmentation is based upon 2 primary aspects i.e. average earnings level of the consumer along with 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 division of Business is based upon the character and life style of the consumer. Business 3 in 1 Coffee target those consumers whose life style is rather busy and do not have much time.

Behavioral Segmentation

Corporate New Ventures At Procter Gamble behavioral segmentation is based upon the mindset understanding and awareness of the customer. Its extremely nutritious items target those clients who have a health conscious attitude towards their intakes.

Corporate New Ventures At Procter Gamble Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are two options:
Option: 1
The Company ought to invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall possessions of the business, increasing the wealth of the company. Costs on R&D would be sunk cost.
2. The business can resell the obtained systems in the market, if it fails to execute its technique. Quantity invest on the R&D could not be restored, and it will be considered totally sunk expense, if it do not give possible results.
3. Investing in R&D provide slow growth in sales, as it takes long time to present an item. Nevertheless, acquisitions provide fast outcomes, as it supply the business currently established item, which can be marketed right after the acquisition.
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the business to face misconception of consumers about Business core values of healthy and healthy items.
2 Big spending on acquisitions than R&D would send out a signal of company's inadequacy of developing ingenious items, and would lead to customer's frustration as well.
3. Big acquisitions than R&D would extend the product line of the business by the products which are currently present in the market, making company unable to introduce brand-new ingenious products.
Option: 2.
The Company 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 company a strong competitive position in the market.
3. It would enable the business to increase its targeted customers by introducing those items which can be provided to a completely new market sector.
4. Innovative products will provide long term advantages and high market share in long term.
1. It would reduce the profit margins of the company.
2. In case of failure, the entire spending on R&D would be considered as sunk cost, and would affect the company at big. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could provide an unfavorable signal to the investors, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to introduce new ingenious products with less risk of transforming the costs on R&D into sunk cost.
2. It would supply a favorable signal to the financiers, as the total assets of the company would increase with its significant R&D spending.
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 regards to the company's total wealth along with in regards to ingenious products.
1. Threat of conversion of R&D spending into sunk expense, greater than option 1 lesser than alternative 2.
2. Risk of misconception about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Intro of less number of innovative items than alternative 2 and high number of ingenious items than alternative 1.

Corporate New Ventures At Procter Gamble Conclusion

RecommendationsBusiness has actually stayed the leading market gamer for more than a years. It has institutionalised its methods and culture to align itself with the marketplace changes and consumer behavior, which has actually eventually permitted it to sustain its market share. Business has developed considerable market share and brand identity in the metropolitan markets, it is suggested that the company must focus on the rural locations in terms of developing brand commitment, awareness, and equity, such can be done by developing a specific brand name allocation method through trade marketing strategies, that draw clear difference in between Corporate New Ventures At Procter Gamble products and other competitor products. Corporate New Ventures At Procter Gamble should take advantage of 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 enable the business to develop brand name equity for recently presented and currently produced products on a greater platform, making the effective usage of resources and brand name image in the market.

Corporate New Ventures At Procter Gamble Exhibits

PESTEL Analysis
Governmental support

Changing requirements of international food.
Improved market share. Altering perception towards healthier products Improvements in R&D as well as QA divisions.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest because 1000 Highest possible after Company with much less growth than Company 9th Cheapest
R&D Spending Greatest considering that 2008 Greatest after Service 2nd Most affordable
Net Profit Margin Highest possible given that 2003 with quick growth from 2001 to 2015 Because of sale of Alcon in 2018. Nearly equal to Kraft Foods Consolidation Virtually equal to Unilever N/A
Competitive Advantage Food with Nourishment and also health and wellness aspect Highest number of brand names with sustainable practices Biggest confectionary as well as refined foods brand on the planet Largest milk products as well as mineral water brand on the planet
Segmentation Middle and also upper middle level consumers worldwide Specific consumers in addition to house team Every age and also Earnings Customer Groups Middle and also upper middle level consumers worldwide
Number of Brands 3rd 4th 2nd 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 32939 287862 796181 247146 668312
Net Profit Margin 9.36% 4.33% 52.86% 6.11% 56.97%
EPS (Earning Per Share) 87.46 4.29 5.48 9.21 48.82
Total Asset 812819 433275 932655 931915 26445
Total Debt 36465 87589 45319 41232 91278
Debt Ratio 23% 55% 28% 49% 84%
R&D Spending 5391 4285 6499 9442 8998
R&D Spending as % of Sales 2.69% 3.61% 2.37% 6.46% 8.92%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations