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Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Case Study Solution

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Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Case Study Solution

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry is presently among the biggest food chains worldwide. It was founded by Darden in 1866, a German Pharmacist who initially released "FarineLactee"; a mix of flour and milk to feed babies and decrease death rate. At the same time, the Page siblings from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Company. The two became rivals at first but later on combined in 1905, leading to the birth of Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry.
Business is now a multinational company. Unlike other multinational companies, it has senior executives from different nations and attempts to make choices thinking about the whole world. Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry currently has more than 500 factories around the world and a network spread throughout 86 countries.

Purpose

The function of Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Corporation is to boost the quality of life of individuals by playing its part and supplying healthy food. It wishes to help the world in shaping a healthy and better future for it. It also wants to motivate individuals to live a healthy life. While making sure that the business is being successful in the long run, that's how it plays its part for a much better and healthy future

Vision

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. Business imagines to develop a trained labor force which would help the company to grow
.

Mission

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry's objective is that as currently, it is the leading business in the food market, it thinks in 'Excellent Food, Good Life". Its mission is to offer its customers with a variety of choices that are healthy and best in taste. It is focused on supplying the best food to its consumers throughout the day and night.

Products.

Business has a large range of products that it provides to its customers. Its items include food for babies, cereals, dairy items, treats, chocolates, food for animal and bottled water. It has around four hundred and fifty (450) factories worldwide and around 328,000 workers. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the company has set its objectives and goals. These objectives and objectives are noted below.
• One goal of the business is to reach zero landfill status. (Business, aboutus, 2017).
• Another goal of Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry is to lose minimum food throughout production. Most often, the food produced is lost even prior to it reaches the customers.
• Another thing that Business is dealing with is to enhance its product packaging in such a way that it would help it to reduce those issues and would likewise guarantee the shipment of high quality of its items to its customers.
• Meet worldwide standards of the environment.
• Build a relationship based upon trust with its consumers, business partners, employees, and federal government.

Critical Issues

Just Recently, Business Company is focusing more towards the method of NHW and investing more of its revenues 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 achieved as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based upon the idea of Nutritious, Health and Wellness (NHW). This method deals with the concept to bringing modification in the client choices about food and making the food things much healthier worrying about the health issues.
The vision of this method is based on the secret method i.e. 60/40+ which just indicates that the items will have a rating of 60% on the basis of taste and 40% is based on its dietary value. The products will be made with additional dietary value in contrast to all other products in market getting it a plus on its dietary content.
This strategy was adopted to bring more yummy plus healthy foods and drinks in market than ever. In competition with other companies, with an intent of retaining its trust over customers as Business Business has actually gained more relied on by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing actual quantity of costs shows that the sales are increasing at a higher rate than its R&D costs, and allow the business to more invest in R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indication also shows a thumbs-up 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 advancement instead of payment of financial obligations. This increasing financial obligation ratio posture a risk of default of Business to its investors and could lead a decreasing share rates. Therefore, in terms of increasing financial obligation ratio, the firm needs to not spend much on R&D and must pay its current financial obligations to decrease the threat for financiers.
The increasing risk of investors with increasing financial obligation ratio and declining share prices can be observed by substantial decline of EPS of Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow perception building of consumers. This slow development likewise hinder business to additional spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Graphs given in the Exhibits D and E.

TWOS Analysis


TWOS analysis can be used to obtain different strategies based upon the SWOT Analysis offered above. A short summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business must present more innovative items by big quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the earnings margins for the company. It could likewise offer Business a long term competitive benefit over its competitors.
The worldwide expansion of Business must be focused on market recording of developing countries by expansion, drawing in more clients through customer's loyalty. As establishing nations are more populated than industrialized nations, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisJan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry must do careful acquisition and merger of organizations, as it might affect the customer's and society's perceptions about Business. It ought to acquire and merge with those business which have a market credibility of healthy and nutritious companies. It would improve the perceptions of consumers about Business.
Business needs to not only spend its R&D on development, rather than it should also focus on the R&D spending over evaluation of cost of different nutritious products. This would increase expense efficiency of its products, which will result in increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business should relocate to not only establishing but also to developed countries. It ought to widens its geographical growth. This wide geographical growth towards developing and developed countries would lower the danger of prospective losses in times of instability in various countries. It should widen its circle to numerous countries like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry ought to sensibly control its acquisitions to avoid the threat of mistaken belief from the customers about Business. It ought to obtain and merge with those nations having a goodwill of being a healthy company in the market. This would not just enhance the understanding of customers about Business however would also increase the sales, earnings margins and market share of Business. It would also allow the business to use its potential resources efficiently on its other operations instead of acquisitions of those organizations slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based on 4 elements; age, gender, income and occupation. For example, Business produces several products related to babies i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry products are rather inexpensive by almost all levels, however its major targeted consumers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in practically 86 countries. Its geographical division is based upon two primary aspects i.e. typical income level of the consumer along with the environment of the area. Singapore Business Company's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and lifestyle of the customer. Business 3 in 1 Coffee target those consumers whose life style is rather busy and do not have much time.

Behavioral Segmentation

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry behavioral segmentation is based upon the mindset knowledge and awareness of the customer. Its extremely nutritious items target those customers who have a health conscious mindset towards their consumptions.

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Alternatives

In order to sustain the brand in the market and keep the client intact with the brand name, there are 2 choices:
Option: 1
The Business must invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the business, increasing the wealth of the business. Costs on R&D would be sunk cost.
2. The business can resell the obtained units in the market, if it stops working to execute its technique. Quantity spend on the R&D could not be revived, and it will be thought about entirely sunk cost, if it do not offer potential outcomes.
3. Investing in R&D provide sluggish growth in sales, as it takes long time to present an item. Acquisitions provide fast outcomes, as it offer the business already established product, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the business to face misunderstanding of customers about Business core values of healthy and healthy items.
2 Large spending on acquisitions than R&D would send a signal of company's ineffectiveness of establishing innovative products, and would outcomes in customer's frustration.
3. Big acquisitions than R&D would extend the product line of the business by the items which are already present in the market, making business not able to present brand-new ingenious items.
Alternative: 2.
The Business ought to invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the company to produce more innovative products.
2. It would offer the business a strong competitive position in the market.
3. It would allow the business to increase its targeted customers by presenting those products which can be used to an entirely new market segment.
4. Innovative products will provide long term benefits and high market share in long run.
Cons:
1. It would decrease the revenue margins of the business.
2. In case of failure, the whole costs on R&D would be considered as sunk cost, and would affect the business at large. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could supply an unfavorable signal to the investors, and might result I declining stock prices.
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 new ingenious products with less threat of converting the spending on R&D into sunk expense.
2. It would supply a positive signal to the investors, as the general assets of the business would increase with its considerable R&D spending.
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 regards to the business's overall wealth along with in regards to ingenious items.
Cons:
1. Threat of conversion of R&D costs into sunk cost, greater than alternative 1 lower than alternative 2.
2. Danger of misconception about the acquisitions, greater than alternative 2 and lower than option 1.
3. Introduction of less variety of ingenious items than alternative 2 and high number of innovative items than alternative 1.

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Conclusion

RecommendationsIt has institutionalised its strategies and culture to align itself with the market changes and client habits, which has ultimately enabled it to sustain its market share. Business has actually established considerable market share and brand identity in the urban markets, it is advised that the company should focus on the rural locations in terms of developing brand name commitment, awareness, and equity, such can be done by developing a particular brand name allocation strategy through trade marketing techniques, that draw clear difference between Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry items and other rival items.

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry 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 assumption in the direction of healthier items
Improvements in R&D as well as QA departments.

Introduction of E-marketing.
No such influence as it is beneficial.
Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest given that 1000
Highest possible after Company with less growth than Service 4th Most affordable
R&D Spending Greatest considering that 2005 Highest possible after Organisation 9th Cheapest
Net Profit Margin Highest possible considering that 2002 with rapid development from 2001 to 2011 As a result of sale of Alcon in 2012. Almost equal to Kraft Foods Consolidation Almost equal to Unilever N/A
Competitive Advantage Food with Nourishment and also wellness variable Highest variety of brands with lasting methods Biggest confectionary as well as processed foods brand in the world Biggest milk items as well as bottled water brand in the world
Segmentation Center as well as top middle level consumers worldwide Specific clients along with household group Any age and also Earnings Customer Groups Middle and also top middle degree consumers worldwide
Number of Brands 3rd 3rd 7th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 87972 331175 624965 969169 979567
Net Profit Margin 5.26% 4.35% 72.75% 5.14% 26.54%
EPS (Earning Per Share) 47.18 9.55 7.91 1.91 97.45
Total Asset 232255 868937 864695 161244 46481
Total Debt 81217 68311 66137 96918 36635
Debt Ratio 43% 12% 71% 25% 89%
R&D Spending 1335 5214 3681 7191 5669
R&D Spending as % of Sales 7.15% 5.33% 2.16% 5.29% 9.71%

Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Executive Summary Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Swot Analysis Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Vrio Analysis Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Pestel Analysis
Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Porters Analysis Jan Eriksson At Novartis Indonesia Turmoil In The Indonesian Pharmaceutical Industry Recommendations