Khalil Abdo Group Case Study Help

Case Study Solution And Analysis

Home >> Darden >> Khalil Abdo Group >>

Khalil Abdo Group Case Study Help

Khalil Abdo Group is presently one of the biggest food cycle worldwide. It was founded by Darden in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix 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 Company. The two became rivals initially but in the future merged in 1905, resulting in the birth of Khalil Abdo Group.
Business is now a multinational company. Unlike other international business, it has senior executives from different nations and tries to make choices considering the entire world. Khalil Abdo Group presently has more than 500 factories around the world and a network spread throughout 86 nations.


The function of Business Corporation is to improve the quality of life of people by playing its part and supplying healthy food. While making sure that the company is prospering in the long run, that's how it plays its part for a much better and healthy future


Khalil Abdo Group's vision is to offer its customers with food that is healthy, high in quality and safe to eat. It wants to be innovative and concurrently understand the needs and requirements of its consumers. Its vision is to grow quickly and offer products that would please the requirements of each age. Khalil Abdo Group imagines to establish a trained labor force which would help the company to grow


Khalil Abdo Group's mission is that as currently, it is the leading business in the food industry, it believes in 'Excellent Food, Great Life". Its objective is to offer its consumers with a variety of options that are healthy and finest in taste. It is concentrated on supplying the best food to its clients throughout the day and night.


Business has a wide variety of products that it offers to its consumers. Its products include food for babies, cereals, dairy products, snacks, chocolates, food for family pet and bottled water. It has around four hundred and fifty (450) factories around the globe and around 328,000 staff members. In 2011, Business was noted as the most rewarding company.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the business has set its objectives and objectives. These objectives and objectives are noted below.
• One objective of the business is to reach zero landfill status. It is working toward absolutely no waste, where no waste of the factory is landfilled. It encourages its staff members to take the most out of the by-products. (Business, aboutus, 2017).
• Another objective of Khalil Abdo Group is to waste minimum food throughout production. Usually, the food produced is lost even before it reaches the customers.
• Another thing that Business is working on is to improve its product packaging in such a way that it would help it to minimize the above-mentioned problems and would likewise ensure the shipment of high quality of its items to its customers.
• Meet international requirements of the environment.
• Construct a relationship based upon trust with its customers, company partners, employees, and federal 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 nation is investing more on acquisitions and mergers to support its NHW method. The target of the business 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 Display H. There is a requirement to focus more on the sales then the innovation technology. Otherwise, it might lead to the declined profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based upon the principle of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing change in the customer preferences about food and making the food things much healthier worrying about the health concerns.
The vision of this method is based on the key technique i.e. 60/40+ which merely implies that the items will have a score of 60% on the basis of taste and 40% is based upon its dietary value. The products will be made with additional dietary worth in contrast to all other items in market getting it a plus on its nutritional content.
This method was adopted to bring more yummy plus healthy foods and drinks in market than ever. In competition with other companies, with an objective of keeping its trust over customers as Business Company has actually gotten more relied on by customers.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing real quantity of costs shows that the sales are increasing at a greater rate than its R&D costs, and allow the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This sign also reveals a thumbs-up to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement instead of payment of financial obligations. This increasing financial obligation ratio position a hazard of default of Business to its investors and could lead a decreasing share prices. In terms of increasing debt ratio, the firm must not invest much on R&D and ought to pay its present financial obligations to decrease the risk for investors.
The increasing risk of investors with increasing debt ratio and decreasing share costs can be observed by huge decline of EPS of Khalil Abdo Group stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This slow development also impede business to more invest in 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 Exhibits D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain numerous strategies based upon the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative items by large quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the earnings margins for the business. It might likewise provide Business a long term competitive benefit over its competitors.
The worldwide expansion of Business need to be focused on market catching of developing nations by growth, attracting more customers through customer's loyalty. As developing countries are more populous than developed nations, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisKhalil Abdo Group ought to do careful acquisition and merger of companies, as it might impact the customer's and society's perceptions about Business. It ought to obtain and combine with those business which have a market reputation of healthy and nutritious companies. It would enhance the understandings of customers about Business.
Business must not just spend its R&D on innovation, rather than it needs to likewise concentrate on the R&D costs over evaluation of cost of different nutritious items. This would increase expense efficiency of its items, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business should move to not only establishing but also to developed nations. It should widen its circle to numerous nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Khalil Abdo Group ought to wisely manage its acquisitions to avoid the danger of mistaken belief from the consumers about Business. It must get and combine with those nations having a goodwill of being a healthy business in the market. This would not only improve the understanding of consumers about Business but would likewise increase the sales, earnings margins and market share of Business. It would also allow the company to utilize its possible resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 elements; age, gender, income and profession. Business produces numerous products related to babies i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary products. Khalil Abdo Group products are rather cost effective by nearly all levels, but its significant targeted consumers, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in almost 86 nations. Its geographical division is based upon 2 main factors i.e. typical income level of the customer along with the environment of the area. For instance, Singapore Business Company's division 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 personality and lifestyle of the client. Business 3 in 1 Coffee target those clients whose life design is rather busy and do not have much time.

Behavioral Segmentation

Khalil Abdo Group behavioral segmentation is based upon the mindset knowledge and awareness of the customer. For example its extremely healthy items target those customers who have a health mindful mindset towards their usages.

Khalil Abdo Group Alternatives

In order to sustain the brand name in the market and keep the client undamaged with the brand, there are 2 alternatives:
Alternative: 1
The Company ought to spend more on acquisitions than on the R&D.
1. Acquisitions would increase overall assets of the company, increasing the wealth of the company. However, spending on R&D would be sunk expense.
2. The business can resell the acquired units in the market, if it stops working to implement its technique. Nevertheless, amount spend on the R&D might not be restored, and it will be considered entirely sunk cost, if it do not give prospective outcomes.
3. Spending on R&D provide slow development in sales, as it takes long period of time to introduce a product. Acquisitions offer fast outcomes, as it offer the company already established product, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the company to face misconception of consumers about Business core values of healthy and nutritious products.
2 Big spending on acquisitions than R&D would send out a signal of company's inefficiency of developing ingenious products, and would outcomes in consumer's discontentment.
3. Big acquisitions than R&D would extend the product line of the business by the products which are currently present in the market, making business unable to present new innovative products.
Alternative: 2.
The Company must invest more on its R&D rather than acquisitions.
1. It would enable the company to produce more ingenious products.
2. It would provide the business a strong competitive position in the market.
3. It would enable the company to increase its targeted customers by presenting those items which can be provided to a completely brand-new market segment.
4. Innovative products will offer long term benefits and high market share in long term.
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 danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could offer a negative signal to the financiers, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the company to present new innovative items with less danger of converting the costs on R&D into sunk expense.
2. It would offer a favorable signal to the investors, as the general properties of the business would increase with its significant R&D costs.
3. It would not affect the profit 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 regards to the company's total wealth as well as in regards to ingenious products.
1. Risk of conversion of R&D costs into sunk expense, greater than option 1 lesser than alternative 2.
2. Risk of misunderstanding about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less number of innovative items than alternative 2 and high variety of innovative items than alternative 1.

Khalil Abdo Group Conclusion

RecommendationsIt has actually institutionalised its methods and culture to align itself with the market changes and customer behavior, which has ultimately permitted it to sustain its market share. Business has actually developed substantial market share and brand name identity in the urban markets, it is recommended that the business needs to focus on the rural locations in terms of establishing brand loyalty, awareness, and equity, such can be done by developing a particular brand allowance technique through trade marketing methods, that draw clear difference in between Khalil Abdo Group products and other competitor products.

Khalil Abdo Group Exhibits

PESTEL Analysis
Governmental assistance

Changing standards of global food.
Improved market share.
Altering assumption towards much healthier items
Improvements in R&D and 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 considering that 8000
Highest after Service with much less development than Organisation 8th Cheapest
R&D Spending Highest possible given that 2003 Highest possible after Business 7th Cheapest
Net Profit Margin Highest because 2005 with rapid development from 2002 to 2017 As a result of sale of Alcon in 2016. Practically equal to Kraft Foods Incorporation Practically equal to Unilever N/A
Competitive Advantage Food with Nutrition and also health and wellness variable Highest possible variety of brands with sustainable practices Biggest confectionary as well as processed foods brand name worldwide Largest dairy items and also bottled water brand in the world
Segmentation Middle as well as top middle level customers worldwide Private clients in addition to family group Any age as well as Revenue Consumer Groups Center as well as upper center level consumers worldwide
Number of Brands 2nd 3rd 3rd 5th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 16193 633377 542615 489116 531192
Net Profit Margin 1.93% 6.18% 11.99% 6.72% 19.32%
EPS (Earning Per Share) 59.15 1.32 1.88 6.68 47.76
Total Asset 177866 178987 735766 814689 51315
Total Debt 92898 33766 65757 69589 75941
Debt Ratio 94% 89% 57% 19% 17%
R&D Spending 7191 2796 7641 2735 5416
R&D Spending as % of Sales 5.51% 3.22% 5.49% 7.73% 2.85%

Khalil Abdo Group Executive Summary Khalil Abdo Group Swot Analysis Khalil Abdo Group Vrio Analysis Khalil Abdo Group Pestel Analysis
Khalil Abdo Group Porters Analysis Khalil Abdo Group Recommendations