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Logic Of Electronic Markets Case Study Analysis

Business is presently one of the greatest food chains worldwide. It was established by Henri Logic Of Electronic Markets in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate.
Business is now a global company. Unlike other international companies, it has senior executives from different countries and attempts to make decisions thinking about the entire world. Logic Of Electronic Markets currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The function of Logic Of Electronic Markets Corporation is to boost the lifestyle of individuals by playing its part and offering healthy food. It wishes 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 ensuring 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

Logic Of Electronic Markets's vision is to provide its clients with food that is healthy, high in quality and safe to eat. Business pictures to establish a well-trained labor force which would help the company to grow
.

Mission

Logic Of Electronic Markets's mission is that as currently, it is the leading company in the food market, it thinks in 'Great Food, Good Life". Its mission is to supply its customers with a variety of choices that are healthy and best in taste too. It is concentrated on supplying the very best food to its customers throughout the day and night.

Products.

Business has a large range of items that it provides to its customers. Its items consist of food for babies, cereals, dairy items, treats, chocolates, food for pet and mineral water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 staff members. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the company has actually set its goals and goals. These goals and goals are listed below.
• One goal of the company is to reach zero garbage dump status. It is pursuing zero waste, where no waste of the factory is landfilled. It encourages its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Logic Of Electronic Markets is to waste minimum food during production. Most often, the food produced is squandered even prior to it reaches the consumers.
• Another thing that Business is working on is to improve its product packaging in such a way that it would help it to decrease those issues and would likewise guarantee the delivery of high quality of its products to its consumers.
• Meet worldwide standards of the environment.
• Develop a relationship based upon trust with its customers, organisation partners, staff members, and federal government.

Critical Issues

Just Recently, Business Company is focusing more towards the technique of NHW and investing more of its earnings on the R&D innovation. 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 anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based upon the concept of Nutritious, Health and Wellness (NHW). This technique handles the idea to bringing change in the client choices about food and making the food stuff much healthier worrying about the health problems.
The vision of this technique is based upon the secret approach i.e. 60/40+ which just suggests that the products will have a score of 60% on the basis of taste and 40% is based on its dietary value. The products will be produced with extra nutritional worth in contrast to all other items in market acquiring it a plus on its dietary content.
This strategy was embraced to bring more delicious plus healthy foods and beverages in market than ever. In competition with other business, with an intention of keeping its trust over customers as Business Business has actually gotten more relied on by costumers.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing real quantity of spending reveals that the sales are increasing at a greater rate than its R&D costs, and permit the company to more invest in R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This indication likewise shows a green light 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 development instead of payment of financial obligations. This increasing financial obligation ratio present a hazard of default of Business to its financiers and could lead a declining share prices. Therefore, in terms of increasing debt ratio, the company ought to not invest much on R&D and needs to pay its current debts to decrease the risk for investors.
The increasing risk of financiers with increasing debt ratio and decreasing share rates can be observed by substantial decrease of EPS of Logic Of Electronic Markets stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This slow growth likewise hinder business to more invest in 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 obtain various strategies based on the SWOT Analysis given above. A brief summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business needs to present more innovative items by big amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the profit margins for the business. It might also offer Business a long term competitive advantage over its competitors.
The global growth of Business ought to be concentrated on market catching of establishing nations by growth, attracting more consumers through client's commitment. As developing nations are more populous than developed nations, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisLogic Of Electronic Markets must do cautious acquisition and merger of companies, as it might impact the consumer's and society's perceptions about Business. It needs to get and combine with those business which have a market credibility of healthy and healthy business. It would improve the perceptions of consumers about Business.
Business must not only spend its R&D on innovation, instead of it must likewise concentrate on the R&D costs over evaluation of expense of numerous healthy items. This would increase expense performance of its products, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing however likewise to industrialized nations. It needs to broadens its geographical growth. This large geographical growth towards establishing and developed countries would reduce the threat of prospective losses in times of instability in various countries. It should expand its circle to various nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Logic Of Electronic Markets should sensibly control its acquisitions to prevent the danger of mistaken belief from the customers about Business. It ought to acquire and combine with those nations having a goodwill of being a healthy business in the market. This would not just improve 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 utilize its possible resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The demographic division of Business is based upon 4 aspects; age, gender, income and occupation. For example, Business produces numerous items connected to babies i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary products. Logic Of Electronic Markets items are rather cost effective by almost all levels, but its major targeted clients, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its existence in nearly 86 nations. Its geographical segmentation is based upon two main aspects i.e. average income level of the customer as well as the climate of the area. For example, Singapore Business Company's division 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 lifestyle of the customer. For example, Business 3 in 1 Coffee target those customers whose lifestyle is quite hectic and do not have much time.

Behavioral Segmentation

Logic Of Electronic Markets behavioral division is based upon the mindset understanding and awareness of the client. Its extremely healthy items target those customers who have a health conscious attitude towards their consumptions.

Logic Of Electronic Markets Alternatives

In order to sustain the brand in the market and keep the customer intact with the brand, there are two choices:
Option: 1
The Company ought to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the company, increasing the wealth of the business. Nevertheless, costs on R&D would be sunk expense.
2. The company can resell the acquired units in the market, if it stops working to implement its technique. Quantity invest on the R&D might not be restored, and it will be considered completely sunk expense, if it do not offer potential results.
3. Investing in R&D offer sluggish development in sales, as it takes long period of time to introduce an item. Acquisitions offer quick results, as it offer the company currently developed item, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's values like Kraftz foods can lead the business to face mistaken belief of customers about Business core worths of healthy and healthy products.
2 Big costs on acquisitions than R&D would send a signal of business's inadequacy of establishing innovative products, and would results in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the product line of the business by the products which are already present in the market, making company not able to introduce brand-new ingenious products.
Alternative: 2.
The Company should 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 enable the business to increase its targeted customers by presenting those products which can be used to a totally brand-new market segment.
4. Ingenious items will provide long term benefits and high market share in long term.
Cons:
1. It would reduce the revenue margins of the company.
2. In case of failure, the whole costs on R&D would be considered as sunk cost, and would impact the business at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might provide a negative signal to the financiers, and could result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to introduce new ingenious products with less risk of converting the spending on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the total assets of the business would increase with its considerable R&D costs.
3. It would not affect the earnings margins of the business at a large rate as compare to alternative 2.
4. It would supply the company a strong long term market position in terms of the company's general wealth as well as in regards to ingenious items.
Cons:
1. Threat of conversion of R&D spending into sunk expense, higher than alternative 1 lesser than alternative 2.
2. Danger of mistaken belief about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Intro of less number of innovative items than alternative 2 and high number of innovative products than alternative 1.

Logic Of Electronic Markets Conclusion

RecommendationsIt has institutionalized its strategies and culture to align itself with the market modifications and customer habits, which has actually eventually permitted it to sustain its market share. Business has established significant market share and brand name identity in the urban markets, it is advised that the company ought to focus on the rural areas in terms of developing brand commitment, awareness, and equity, such can be done by creating a specific brand name allocation strategy through trade marketing tactics, that draw clear distinction in between Logic Of Electronic Markets products and other competitor products.

Logic Of Electronic Markets Exhibits

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

Altering standards of global food.
Boosted market share.
Changing assumption in the direction of healthier products
Improvements in R&D as well as QA departments.

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

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest considering that 1000
Highest possible after Business with much less development than Company 9th Lowest
R&D Spending Highest possible because 2002 Greatest after Business 8th Least expensive
Net Profit Margin Highest possible since 2002 with fast growth from 2004 to 2011 Due to sale of Alcon in 2018. Virtually equal to Kraft Foods Incorporation Practically equal to Unilever N/A
Competitive Advantage Food with Nutrition and health factor Greatest variety of brands with lasting practices Biggest confectionary and also processed foods brand in the world Largest dairy products and also bottled water brand name worldwide
Segmentation Center and upper center level consumers worldwide Private customers in addition to family group Any age and Earnings Client Teams Center as well as top middle degree consumers worldwide
Number of Brands 8th 9th 8th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 97836 355883 639888 285943 379552
Net Profit Margin 2.82% 2.49% 86.89% 4.47% 62.64%
EPS (Earning Per Share) 72.15 8.99 3.11 6.72 72.16
Total Asset 668232 634927 716473 447999 47848
Total Debt 14236 25448 45768 71325 95294
Debt Ratio 97% 17% 92% 82% 63%
R&D Spending 2847 9251 6382 4323 9157
R&D Spending as % of Sales 2.18% 3.83% 1.99% 9.93% 3.22%

Logic Of Electronic Markets Executive Summary Logic Of Electronic Markets Swot Analysis Logic Of Electronic Markets Vrio Analysis Logic Of Electronic Markets Pestel Analysis
Logic Of Electronic Markets Porters Analysis Logic Of Electronic Markets Recommendations