Hambrecht Quist Case Study Help

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Hambrecht Quist Case Study Help

Hambrecht Quist is presently one of the greatest food cycle worldwide. It was founded by Darden in 1866, a German Pharmacist who initially released "FarineLactee"; a mix of flour and milk to feed infants and decrease death rate. At the very same time, the Page siblings from Switzerland also found The Anglo-Swiss Condensed Milk Company. The two became rivals in the beginning but later merged in 1905, leading to the birth of Hambrecht Quist.
Business is now a global company. Unlike other international companies, it has senior executives from various countries and attempts to make choices thinking about the entire world. Hambrecht Quist currently has more than 500 factories worldwide and a network spread across 86 nations.


The function of Business Corporation is to enhance 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 better and healthy future


Hambrecht Quist's vision is to offer its customers with food that is healthy, high in quality and safe to eat. It wishes to be ingenious and simultaneously comprehend the needs and requirements of its consumers. Its vision is to grow quick and offer items that would please the needs of each age. Hambrecht Quist imagines to establish a trained workforce which would help the business to grow


Hambrecht Quist's mission is that as currently, it is the leading company in the food industry, it thinks in 'Great Food, Great Life". Its objective is to offer its customers with a range of options that are healthy and best in taste also. It is focused on providing the best food to its consumers throughout the day and night.


Hambrecht Quist has a broad variety of items that it uses to its clients. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has actually laid down its goals and objectives. These objectives and goals are noted below.
• One objective of the business is to reach zero landfill status. It is pursuing zero waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the by-products. (Business, aboutus, 2017).
• Another objective of Hambrecht Quist is to lose minimum food during production. Usually, the food produced is wasted even prior to it reaches the clients.
• Another thing that Business is dealing with is to enhance its product packaging in such a method that it would help it to lower those problems and would also guarantee the delivery of high quality of its products to its clients.
• Meet global standards of the environment.
• Develop a relationship based on trust with its customers, service partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the technique of NHW and investing more of its profits on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW method. The target of the business is not attained 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 Exhibit H. There is a requirement to focus more on the sales then the development technology. Otherwise, it may result in the decreased profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based upon the principle of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing modification in the client choices about food and making the food stuff much healthier concerning about the health issues.
The vision of this technique is based upon the key technique i.e. 60/40+ which just indicates that the products will have a rating of 60% on the basis of taste and 40% is based upon its nutritional worth. The items will be manufactured with additional nutritional worth in contrast to all other products in market gaining it a plus on its dietary material.
This strategy was adopted to bring more yummy plus nutritious foods and beverages in market than ever. In competition with other business, with an intention of maintaining its trust over clients as Business Company has gained more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing real amount of spending reveals that the sales are increasing at a greater rate than its R&D spending, and allow the business to more spend on R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is decreasing. This indicator also shows 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 advancement rather than payment of financial obligations. This increasing financial obligation ratio present a threat of default of Business to its financiers and could lead a decreasing share rates. Therefore, in terms of increasing debt ratio, the firm must not spend much on R&D and must pay its present debts to decrease the threat for financiers.
The increasing danger of investors with increasing debt ratio and declining share prices can be observed by huge decrease of EPS of Hambrecht Quist stocks.
The sales development of company is likewise low as compare to its mergers and acquisitions due to slow perception building of customers. This sluggish development also prevent company 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 Charts given in the Exhibitions D and E.

TWOS Analysis

2 analysis can be used to derive different strategies based upon the SWOT Analysis given above. A short summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce 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 profit margins for the business. It might likewise provide Business a long term competitive advantage over its competitors.
The international expansion of Business must be concentrated on market recording of establishing nations by growth, attracting more consumers through consumer's commitment. As establishing nations are more populous than industrialized nations, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisHambrecht Quist must do careful acquisition and merger of organizations, as it might affect the customer's and society's perceptions about Business. It ought to obtain and combine with those business which have a market credibility of healthy and healthy business. It would enhance the understandings of customers about Business.
Business should not just spend its R&D on innovation, rather than it needs to likewise focus on the R&D spending over evaluation of cost of numerous nutritious items. This would increase expense effectiveness of its products, which will result in increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business must move to not only developing however also to industrialized countries. It should expand its circle to different countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It ought to acquire and combine with those countries having a goodwill of being a healthy business in the market. It would likewise enable the business to use its potential resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 aspects; age, gender, earnings and occupation. For example, Business produces several items related to infants i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Hambrecht Quist products are rather cost effective by almost all levels, but its significant targeted clients, in terms of earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in practically 86 countries. Its geographical segmentation is based upon 2 main aspects i.e. average income level of the customer in addition to the environment of the region. For example, Singapore Business Company's segmentation is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and life style of the customer. Business 3 in 1 Coffee target those clients whose life style is quite busy and do not have much time.

Behavioral Segmentation

Hambrecht Quist behavioral segmentation is based upon the mindset understanding and awareness of the client. For instance its highly healthy products target those consumers who have a health conscious mindset towards their consumptions.

Hambrecht Quist Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are two options:
Alternative: 1
The Company should spend more on acquisitions than on the R&D.
1. Acquisitions would increase overall properties of the company, increasing the wealth of the business. Spending on R&D would be sunk cost.
2. The business can resell the gotten systems in the market, if it stops working to execute its technique. Amount invest on the R&D might not be restored, and it will be considered completely sunk expense, if it do not provide possible outcomes.
3. Investing in R&D offer sluggish development in sales, as it takes long period of time to introduce an item. Acquisitions offer fast results, as it offer the company currently developed product, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the company's worths like Kraftz foods can lead the company to face misunderstanding of consumers about Business core worths of healthy and healthy items.
2 Large costs on acquisitions than R&D would send a signal of company's ineffectiveness of developing ingenious products, and would results in consumer's frustration too.
3. Large acquisitions than R&D would extend the product line of the company by the items which are already present in the market, making business unable to introduce new ingenious items.
Option: 2.
The Company should spend more on its R&D instead of acquisitions.
1. It would enable the business to produce more ingenious items.
2. It would provide the company a strong competitive position in the market.
3. It would enable the company to increase its targeted consumers by presenting those products which can be offered to a totally brand-new market segment.
4. Ingenious products will supply long term benefits and high market share in long term.
1. It would reduce the profit margins of the company.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would affect the company at large. The risk is not in the case of acquisitions.
3. It would not increase the wealth of business, which could offer a negative signal to the investors, and could result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to present brand-new innovative items with less threat of transforming the spending on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the total possessions of the company would increase with its substantial R&D spending.
3. It would not impact the earnings margins of the business at a large rate as compare to alternative 2.
4. It would provide the business a strong long term market position in terms of the business's general wealth in addition to in terms of ingenious products.
1. Threat of conversion of R&D costs into sunk expense, greater than alternative 1 lower than alternative 2.
2. Danger of misconception about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Intro of less number of ingenious products than alternative 2 and high variety of innovative items than alternative 1.

Hambrecht Quist Conclusion

RecommendationsBusiness has stayed the top market player for more than a years. It has institutionalised its techniques and culture to align itself with the market modifications and customer habits, which has eventually allowed it to sustain its market share. Business has developed substantial market share and brand name identity in the metropolitan markets, it is recommended that the company needs to focus on the rural areas in terms of developing brand loyalty, awareness, and equity, such can be done by producing a specific brand name allotment technique through trade marketing methods, that draw clear difference in between Hambrecht Quist items and other rival items. Hambrecht Quist needs to leverage its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will permit the company to establish brand name equity for newly presented and currently produced items on a higher platform, making the efficient usage of resources and brand image in the market.

Hambrecht Quist Exhibits

PESTEL Analysis
Governmental assistance

Altering requirements of international food.
Boosted market share. Altering understanding in the direction of much healthier items Improvements in R&D and also QA departments.

Intro of E-marketing.
No such impact as it is favourable. Problems over recycling.

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 2000 Highest possible after Company with much less growth than Company 4th Least expensive
R&D Spending Highest possible given that 2009 Highest possible after Service 7th Most affordable
Net Profit Margin Greatest because 2005 with rapid growth from 2002 to 2019 As a result of sale of Alcon in 2018. Almost equal to Kraft Foods Incorporation Nearly equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as health and wellness aspect Highest variety of brand names with sustainable practices Largest confectionary as well as processed foods brand on the planet Biggest milk items and mineral water brand name on the planet
Segmentation Middle and top middle level customers worldwide Specific clients along with family group Any age and also Income Customer Teams Middle and also top center degree consumers worldwide
Number of Brands 5th 7th 6th 5th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 14412 621399 125132 966933 931352
Net Profit Margin 2.98% 4.85% 68.67% 5.12% 15.29%
EPS (Earning Per Share) 86.23 1.79 6.37 5.88 33.25
Total Asset 112766 873124 791266 311845 56434
Total Debt 89897 59791 52348 33143 18267
Debt Ratio 74% 14% 68% 31% 19%
R&D Spending 8748 4372 7188 5762 3973
R&D Spending as % of Sales 8.17% 8.64% 4.26% 3.88% 9.22%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations