Eric Wood A Case Study Solution

Business is presently one of the greatest food chains worldwide. It was established by Henri Eric Wood A in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate.
Business is now a global business. Unlike other international companies, it has senior executives from different countries and tries to make decisions thinking about the whole world. Eric Wood A currently has more than 500 factories worldwide and a network spread across 86 nations.

Purpose

The function of Eric Wood A Corporation is to boost the lifestyle of individuals by playing its part and supplying healthy food. It wishes to help the world in shaping a healthy and much better future for it. It also wants to motivate people to live a healthy life. While making certain that the company is succeeding in the long run, that's how it plays its part for a much better and healthy future

Vision

Eric Wood A's vision is to supply its clients with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and simultaneously comprehend the needs and requirements of its consumers. Its vision is to grow fast and provide products that would please the needs of each age. Eric Wood A pictures to develop a trained labor force which would help the business to grow
.

Mission

Eric Wood A's objective is that as currently, it is the leading business in the food market, it thinks in 'Great Food, Good Life". Its objective is to offer its customers with a range of options that are healthy and finest in taste as well. It is focused on providing the best food to its consumers throughout the day and night.

Products.

Business has a wide range of products that it provides to its customers. Its items include food for infants, cereals, dairy products, treats, chocolates, food for family pet and bottled water. It has around 4 hundred and fifty (450) factories around the globe and around 328,000 staff members. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Remembering the vision and objective of the corporation, the company has actually put down its goals and objectives. These objectives and objectives are noted below.
• One goal of the business is to reach no garbage dump status. It is working toward zero waste, where no waste of the factory is landfilled. It motivates its staff members to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Eric Wood A is to waste minimum food during production. Usually, the food produced is wasted even before it reaches the customers.
• Another thing that Business is dealing with is to improve its product packaging in such a way that it would help it to reduce the above-mentioned complications and would also guarantee the delivery of high quality of its products to its consumers.
• Meet worldwide requirements of the environment.
• Build a relationship based on trust with its consumers, business partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the strategy of NHW and investing more of its earnings 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 achieved as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibition H. There is a requirement to focus more on the sales then the development technology. Otherwise, it may lead to the decreased profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based on the idea of Nutritious, Health and Health (NHW). This technique deals with the idea to bringing modification in the consumer choices about food and making the food things much healthier worrying about the health issues.
The vision of this technique is based on the key approach i.e. 60/40+ which simply suggests that the items 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 extra dietary worth in contrast to all other products in market gaining it a plus on its dietary content.
This method was embraced to bring more tasty plus nutritious foods and beverages in market than ever. In competition with other business, with an intent of keeping its trust over consumers as Business Company has gained more relied on by customers.

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 greater rate than its R&D spending, and enable the business to more invest in R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is declining. This indication also shows a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D advancement instead of payment of debts. This increasing debt ratio pose a threat of default of Business to its investors and could lead a decreasing share rates. Therefore, in terms of increasing debt ratio, the company ought to not invest much on R&D and should pay its existing debts to reduce the threat for financiers.
The increasing threat of financiers with increasing financial obligation ratio and decreasing share prices can be observed by huge decline of EPS of Eric Wood A stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This slow development also prevent company 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 estimations and Charts given in the Exhibits D and E.

TWOS Analysis

2 analysis can be used to derive different methods based upon the SWOT Analysis offered above. A brief summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business must introduce more innovative products by large quantity of R&D Spending and mergers and acquisitions. It might increase the marketplace share of Business and increase the earnings margins for the business. It could also provide Business a long term competitive advantage over its rivals.
The worldwide expansion of Business should be concentrated on market catching of establishing countries by expansion, drawing in more clients through consumer's loyalty. As developing nations are more populous than developed countries, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Eric Wood A ought to do careful acquisition and merger of organizations, as it might impact the client's and society's understandings about Business. It must acquire and merge with those companies which have a market reputation of healthy and nutritious companies. It would improve the perceptions of consumers about Business.
Business should not only invest its R&D on innovation, instead of it ought to also focus on the R&D costs over assessment of expense of different nutritious items. This would increase expense effectiveness of its items, which will result in increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

Business should move to not just establishing but likewise to industrialized nations. It ought to widen its circle to numerous nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It should get and merge with those nations having a goodwill of being a healthy business in the market. It would likewise allow the business to use its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 elements; age, gender, earnings and occupation. For example, Business produces several items connected to babies i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Eric Wood A items are quite budget-friendly by practically all levels, but its significant targeted clients, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in nearly 86 countries. Its geographical division is based upon two primary elements i.e. average income level of the consumer along with the environment of the area. Singapore Business Business's division 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 character and life style of the consumer. Business 3 in 1 Coffee target those customers whose life design is quite busy and do not have much time.

Behavioral Segmentation

Eric Wood A behavioral division is based upon the attitude understanding and awareness of the customer. Its highly healthy items target those clients who have a health mindful mindset towards their consumptions.

Eric Wood A Alternatives

In order to sustain the brand in the market and keep the consumer undamaged with the brand, there are two options:
Alternative: 1
The Company ought to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it stops working to execute its method. However, amount spend on the R&D could not be restored, and it will be thought about entirely sunk expense, if it do not provide possible outcomes.
3. Spending on R&D supply sluggish development in sales, as it takes long time to introduce a product. Acquisitions offer fast results, as it offer the company currently developed item, which can be marketed soon 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 misconception of consumers about Business core worths of healthy and nutritious items.
2 Big costs on acquisitions than R&D would send a signal of company's inadequacy of establishing ingenious items, and would outcomes in customer's frustration.
3. Big acquisitions than R&D would extend the product line of the company by the items which are already present in the market, making company unable to introduce brand-new ingenious products.
Option: 2.
The Business must spend more on its R&D instead of acquisitions.
Pros:
1. It would allow the business to produce more innovative items.
2. It would provide the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted customers by introducing those items which can be offered to a completely brand-new market segment.
4. Ingenious products will offer long term advantages and high market share in long term.
Cons:
1. It would decrease the earnings margins of the company.
2. In case of failure, the whole spending on R&D would be thought about as sunk cost, and would impact the business at large. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which might offer a negative signal to the investors, and could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Pros:
1. It would allow the company to present new ingenious items with less risk of transforming the costs on R&D into sunk cost.
2. It would offer a positive signal to the financiers, as the total possessions of the business would increase with its significant 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 total wealth as well as in regards to ingenious products.
Cons:
1. Threat of conversion of R&D spending into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Danger of misunderstanding about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less number of innovative items than alternative 2 and high variety of ingenious items than alternative 1.

Eric Wood A Conclusion

Business has actually remained the leading market player for more than a years. It has actually institutionalized its strategies and culture to align itself with the market modifications and consumer habits, which has actually ultimately allowed it to sustain its market share. Business has actually established considerable market share and brand identity in the city markets, it is recommended that the business must focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by producing a particular brand name allotment strategy through trade marketing methods, that draw clear difference in between Eric Wood A products and other competitor items. Eric Wood A needs to leverage 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 establish brand name equity for recently introduced and currently produced items on a greater platform, making the effective use of resources and brand image in the market.

Eric Wood A Exhibits