Menu

Hambrecht Quist Case Study Analysis

Case Study Solution And Analysis


Home >> Darden >> Hambrecht Quist >>

Hambrecht Quist Case Study Help

Business is presently one of the most significant food chains worldwide. It was founded by Henri Hambrecht Quist in 1866, a German Pharmacist who first introduced "FarineLactee"; a mix of flour and milk to feed babies and decrease mortality rate.
Business is now a global business. Unlike other multinational business, it has senior executives from different nations and tries to make choices thinking about the whole world. Hambrecht Quist presently has more than 500 factories around the world and a network spread throughout 86 nations.

Purpose

The function of Hambrecht Quist Corporation is to enhance the quality of life of people by playing its part and providing healthy food. It wants to help the world in shaping a healthy and better future for it. It likewise wants 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 better and healthy future

Vision

Hambrecht Quist's vision is to offer its clients 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 quickly and provide items that would satisfy the requirements of each age. Hambrecht Quist imagines to develop a well-trained labor force which would help the company to grow
.

Mission

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

Products.

Hambrecht Quist has a broad variety of products that it provides to its clients. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the company has put down its objectives and goals. These objectives and goals are listed below.
• One goal of the company is to reach no landfill status. (Business, aboutus, 2017).
• Another goal of Hambrecht Quist is to waste minimum food during production. Usually, the food produced is lost even prior to it reaches the clients.
• Another thing that Business is working on is to enhance its product packaging in such a way that it would help it to decrease the above-mentioned issues and would also guarantee the shipment of high quality of its products to its clients.
• Meet worldwide requirements of the environment.
• Develop a relationship based upon trust with its consumers, organisation partners, workers, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its revenues on the R&D innovation. The nation is investing more on acquisitions and mergers to support its NHW technique. The target of the company is not attained 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 Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based on the concept of Nutritious, Health and Wellness (NHW). This method handles the idea to bringing change in the customer choices about food and making the food things healthier worrying about the health problems.
The vision of this strategy is based on the secret approach i.e. 60/40+ which merely means that the products will have a score of 60% on the basis of taste and 40% is based upon its nutritional value. The products will be made with extra dietary value in contrast to all other items in market getting it a plus on its dietary content.
This strategy was embraced to bring more tasty plus nutritious foods and beverages in market than ever. In competition with other companies, with an intention of maintaining its trust over customers as Business Company has actually acquired more relied on by clients.

Quantitative Analysis.

R&D Costs 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 costs, and permit the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This indicator also shows a green light to the R&D spending, 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 financial obligations. This increasing debt ratio present a threat of default of Business to its financiers and might lead a declining share rates. In terms of increasing debt ratio, the company should not spend much on R&D and should pay its current debts to decrease the risk for financiers.
The increasing threat of investors with increasing debt ratio and decreasing share costs can be observed by substantial decline of EPS of Hambrecht Quist stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish growth likewise impede business to more 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 Graphs given in the Displays D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business must present more innovative items by large quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the business. It could likewise provide Business a long term competitive advantage over its competitors.
The international growth of Business need to be concentrated on market capturing of developing countries by expansion, bring in more customers through consumer's commitment. As developing countries are more populous than developed countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisHambrecht Quist must do cautious acquisition and merger of organizations, as it could affect the client's and society's understandings about Business. It must acquire and merge with those business which have a market reputation of healthy and healthy companies. It would improve the understandings of consumers about Business.
Business must not just spend its R&D on innovation, instead of it must likewise concentrate on the R&D costs over assessment of cost of different healthy items. This would increase cost effectiveness of its products, 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 only developing but likewise to industrialized nations. It must expands its geographical growth. This wide geographical growth towards establishing and established nations would reduce the danger of possible losses in times of instability in various nations. It needs to broaden its circle to various countries like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It needs to acquire and merge with those nations having a goodwill of being a healthy company in the market. It would also allow the business to utilize its prospective resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 aspects; age, gender, income and occupation. Business produces a number of items related to babies i.e. Cerelac, Nido, and so on and related to grownups i.e. confectionary products. Hambrecht Quist products are rather affordable by practically all levels, however its significant targeted consumers, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in nearly 86 countries. Its geographical segmentation is based upon two primary aspects i.e. average earnings level of the customer in addition to the environment of the area. For instance, Singapore Business Business's division 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 personality and lifestyle of the consumer. 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 division is based upon the mindset understanding and awareness of the customer. For instance its highly healthy items target those customers who have a health mindful mindset towards their usages.

Hambrecht Quist Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are 2 choices:
Option: 1
The Business ought to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall assets of the company, increasing the wealth of the business. Costs on R&D would be sunk cost.
2. The company can resell the obtained systems in the market, if it stops working to execute its strategy. However, quantity invest in the R&D might not be restored, and it will be considered completely sunk cost, if it do not offer prospective outcomes.
3. Investing in R&D offer slow growth in sales, as it takes very long time to introduce a product. Acquisitions provide fast outcomes, as it supply the business already developed item, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the company to deal with misconception of customers about Business core values of healthy and healthy products.
2 Big spending on acquisitions than R&D would send a signal of business's inadequacy of developing innovative items, and would results in customer's frustration also.
3. Large 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 not able to introduce new innovative products.
Alternative: 2.
The Business must invest more on its R&D instead of acquisitions.
Pros:
1. It would enable the company to produce more ingenious items.
2. It would offer the business a strong competitive position in the market.
3. It would allow the business to increase its targeted clients by presenting those products which can be provided to a completely new market segment.
4. Innovative items will supply long term advantages and high market share in long run.
Cons:
1. It would reduce the profit margins of the business.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would affect the business at large. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which could supply an unfavorable signal to the investors, and could result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce brand-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 investors, as the total assets of the company would increase with its substantial R&D costs.
3. It would not affect the revenue margins of the company 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 company's overall wealth in addition to in terms of ingenious products.
Cons:
1. Risk of conversion of R&D costs into sunk cost, greater than alternative 1 lesser than alternative 2.
2. Threat of misunderstanding about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Intro of less variety of ingenious products than alternative 2 and high number of ingenious products than alternative 1.

Hambrecht Quist Conclusion

RecommendationsIt has institutionalized its techniques and culture to align itself with the market modifications and customer habits, which has actually ultimately enabled it to sustain its market share. Business has developed significant market share and brand name identity in the urban markets, it is suggested that the company needs to focus on the rural locations in terms of developing brand loyalty, awareness, and equity, such can be done by producing a particular brand name allocation technique through trade marketing tactics, that draw clear difference in between Hambrecht Quist products and other competitor products.

Hambrecht Quist Exhibits

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

Altering standards of worldwide food.
Improved market share.
Altering perception towards much healthier items
Improvements in R&D as well as QA divisions.

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

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 7000
Highest possible after Service with much less growth than Organisation 5th Cheapest
R&D Spending Highest possible considering that 2006 Greatest after Business 2nd Most affordable
Net Profit Margin Highest possible because 2007 with fast growth from 2004 to 2013 As a result of sale of Alcon in 2019. Practically equal to Kraft Foods Consolidation Nearly equal to Unilever N/A
Competitive Advantage Food with Nourishment and health element Highest possible variety of brands with sustainable methods Biggest confectionary and also refined foods brand name in the world Largest milk products and mineral water brand on the planet
Segmentation Middle and top middle level consumers worldwide Individual consumers in addition to home team All age and also Income Customer Groups Center as well as top center degree customers worldwide
Number of Brands 7th 3rd 7th 4th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 65526 538423 878933 829382 136688
Net Profit Margin 6.91% 3.67% 11.12% 9.88% 24.89%
EPS (Earning Per Share) 11.69 4.68 3.91 1.14 56.32
Total Asset 752413 236595 889417 226224 42788
Total Debt 38217 97262 79457 76135 29814
Debt Ratio 52% 94% 32% 59% 57%
R&D Spending 6998 6361 8267 4762 1532
R&D Spending as % of Sales 4.97% 2.54% 4.76% 5.79% 1.11%

Hambrecht Quist Executive Summary Hambrecht Quist Swot Analysis Hambrecht Quist Vrio Analysis Hambrecht Quist Pestel Analysis
Hambrecht Quist Porters Analysis Hambrecht Quist Recommendations