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Eric Wood B Case Study Analysis

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Eric Wood B is currently among the biggest food cycle worldwide. It was founded by Darden in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate. At the very same time, the Page siblings from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The two ended up being competitors in the beginning but later merged in 1905, leading to the birth of Eric Wood B.
Business is now a global business. Unlike other multinational business, it has senior executives from different countries and tries to make decisions thinking about the entire world. Eric Wood B presently has more than 500 factories around the world and a network spread throughout 86 countries.

Purpose

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

Vision

Eric Wood B's vision is to provide its consumers with food that is healthy, high in quality and safe to consume. It wants to be innovative and at the same time understand the requirements and requirements of its customers. Its vision is to grow fast and supply items that would please the needs of each age. Eric Wood B envisions to develop a trained workforce which would help the business to grow
.

Mission

Eric Wood B's mission is that as presently, it is the leading company in the food market, it thinks in 'Good Food, Good Life". Its objective is to provide its consumers with a variety of choices that are healthy and best in taste. It is focused on providing the best food to its consumers throughout the day and night.

Products.

Eric Wood B has a broad variety of items that it uses to its consumers. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the business has put down its objectives and objectives. These objectives and objectives are listed below.
• One goal of the business is to reach no landfill status. (Business, aboutus, 2017).
• Another goal of Eric Wood B is to squander minimum food throughout production. Most often, the food produced is lost even prior to it reaches the clients.
• 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 issues and would likewise ensure the delivery of high quality of its items to its consumers.
• Meet worldwide standards of the environment.
• Build a relationship based upon trust with its customers, organisation partners, staff members, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the strategy 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 method. The target of the company 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%, offered in Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based upon the idea of Nutritious, Health and Health (NHW). This technique handles the concept to bringing modification in the client choices about food and making the food stuff much healthier worrying about the health concerns.
The vision of this strategy is based upon the key method i.e. 60/40+ which simply means that the items will have a rating of 60% on the basis of taste and 40% is based upon its dietary worth. The items will be made with additional nutritional worth in contrast to all other products 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 competition with other business, with an intent of maintaining its trust over clients as Business Business has acquired more relied on by customers.

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing actual quantity of spending reveals that the sales are increasing at a greater rate than its R&D costs, and enable the company to more spend on R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This indication also shows a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of debts. This increasing debt ratio position a danger of default of Business to its investors and could lead a declining share prices. In terms of increasing financial obligation ratio, the firm should not spend much on R&D and needs to pay its existing financial obligations to decrease the risk for investors.
The increasing danger of investors with increasing debt ratio and declining share rates can be observed by substantial decline of EPS of Eric Wood B stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This slow growth also impede business to further spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of computations and Graphs given up the Exhibits D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business must present more innovative products by big amount of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the earnings margins for the business. It could also offer Business a long term competitive advantage over its rivals.
The international growth of Business need to be concentrated on market capturing of establishing countries by expansion, attracting more customers through client's loyalty. As developing countries are more populated than industrialized nations, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisEric Wood B ought to do mindful acquisition and merger of organizations, as it could affect the customer's and society's perceptions about Business. It must get and combine with those companies which have a market reputation of healthy and nutritious companies. It would improve the understandings of customers about Business.
Business ought to not just invest its R&D on innovation, instead of it must also focus on the R&D spending over examination of cost of numerous nutritious items. This would increase expense performance of its products, which will result in increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not just developing however also to industrialized nations. It ought to widen its circle to different nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It ought to acquire and combine with those countries having a goodwill of being a healthy company in the market. It would likewise make it possible for the business to use its potential resources effectively on its other operations rather than acquisitions of those companies slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon four elements; age, gender, income and profession. Business produces numerous items related to infants i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Eric Wood B products are rather affordable by nearly all levels, but its major targeted consumers, in regards to earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is made up of its existence in almost 86 nations. Its geographical segmentation is based upon 2 primary factors i.e. average income level of the consumer as well as the climate of the region. Singapore Business Company's segmentation is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and lifestyle of the client. Business 3 in 1 Coffee target those consumers whose life design is rather busy and don't have much time.

Behavioral Segmentation

Eric Wood B behavioral division is based upon the attitude knowledge and awareness of the client. For instance its highly nutritious products target those consumers who have a health mindful mindset towards their usages.

Eric Wood B Alternatives

In order to sustain the brand in the market and keep the customer undamaged with the brand name, there are two alternatives:
Option: 1
The Company should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall properties of the business, increasing the wealth of the business. Spending on R&D would be sunk cost.
2. The business can resell the acquired systems in the market, if it fails to implement its technique. Amount spend on the R&D could not be restored, and it will be considered totally sunk expense, if it do not provide possible outcomes.
3. Spending on R&D provide sluggish growth in sales, as it takes very long time to present an item. Acquisitions offer fast results, as it offer the business already developed item, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the company to deal with misunderstanding of consumers about Business core worths of healthy and healthy products.
2 Large spending on acquisitions than R&D would send out a signal of company's ineffectiveness of developing innovative products, and would outcomes in customer's frustration.
3. Big acquisitions than R&D would extend the line of product of the company by the items which are currently present in the market, making company unable to present new innovative items.
Alternative: 2.
The Company must spend more on its R&D rather than acquisitions.
Pros:
1. It would allow the business to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted consumers by presenting those products which can be provided to a totally brand-new market sector.
4. Innovative items will supply long term benefits and high market share in long run.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would affect the company at large. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which might supply 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 innovative products with less danger of transforming the spending on R&D into sunk cost.
2. It would offer a favorable signal to the financiers, as the general possessions of the company would increase with its significant R&D costs.
3. It would not impact the earnings margins of the company 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 overall wealth as well as in terms of ingenious products.
Cons:
1. Danger of conversion of R&D costs into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Risk of mistaken belief about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Introduction of less variety of innovative products than alternative 2 and high number of ingenious products than alternative 1.

Eric Wood B Conclusion

RecommendationsBusiness has stayed the top market player for more than a decade. It has institutionalised its techniques and culture to align itself with the market changes and customer behavior, which has eventually allowed it to sustain its market share. Business has established considerable market share and brand identity in the city markets, it is suggested that the business needs to focus on the rural areas in terms of developing brand commitment, awareness, and equity, such can be done by creating a specific brand allowance strategy through trade marketing methods, that draw clear distinction in between Eric Wood B products and other competitor items. Moreover, Business ought to leverage its brand name image of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will permit the company to establish brand name equity for newly introduced and currently produced products on a higher platform, making the efficient use of resources and brand image in the market.

Eric Wood B Exhibits

PESTEL Analysis
P
Political
E
Economic
S
Social
T
Technology
L
Legal
E
Environment
Governmental assistance

Altering criteria of international food.
Improved market share.
Transforming perception in the direction of healthier items
Improvements in R&D as well as QA departments.

Introduction of E-marketing.
No such effect as it is favourable.
Worries over recycling.

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 5000
Highest possible after Business with much less growth than Organisation 7th Lowest
R&D Spending Greatest considering that 2001 Highest after Organisation 3rd Lowest
Net Profit Margin Highest considering that 2006 with rapid development from 2009 to 2011 Due to sale of Alcon in 2012. Practically equal to Kraft Foods Unification Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health and wellness factor Highest possible variety of brand names with lasting methods Largest confectionary and refined foods brand in the world Biggest milk products and bottled water brand in the world
Segmentation Center and upper middle degree customers worldwide Individual consumers in addition to family team Every age and also Earnings Consumer Groups Center as well as upper middle degree consumers worldwide
Number of Brands 8th 7th 3rd 2nd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 75979 448492 998275 827395 244266
Net Profit Margin 4.23% 7.32% 77.42% 2.48% 44.76%
EPS (Earning Per Share) 26.69 6.13 4.81 6.27 33.74
Total Asset 783119 769645 117649 869177 55627
Total Debt 95428 11845 57127 77463 72311
Debt Ratio 35% 56% 43% 32% 98%
R&D Spending 6868 7831 7246 4558 7174
R&D Spending as % of Sales 4.62% 1.28% 8.24% 5.14% 8.35%

Eric Wood B Executive Summary Eric Wood B Swot Analysis Eric Wood B Vrio Analysis Eric Wood B Pestel Analysis
Eric Wood B Porters Analysis Eric Wood B Recommendations