Managing For Shareholder Value From Top To Bottom Case Study Analysis

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Business is currently one of the greatest food chains worldwide. It was established by Henri Managing For Shareholder Value From Top To Bottom in 1866, a German Pharmacist who first released "FarineLactee"; a mix of flour and milk to feed babies and reduce death 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 entire world. Managing For Shareholder Value From Top To Bottom currently has more than 500 factories around the world and a network spread across 86 countries.


The function of Managing For Shareholder Value From Top To Bottom Corporation is to improve the quality of life of individuals by playing its part and offering healthy food. It wishes to help the world in shaping a healthy and much better future for it. It also wishes to encourage individuals to live a healthy life. While making sure that the business is prospering in the long run, that's how it plays its part for a better and healthy future


Managing For Shareholder Value From Top To Bottom's vision is to offer its consumers with food that is healthy, high in quality and safe to eat. Business visualizes to establish a well-trained labor force which would help the business to grow


Managing For Shareholder Value From Top To Bottom's objective is that as currently, it is the leading business in the food market, it believes in 'Good Food, Excellent Life". Its mission is to offer its consumers with a variety of options that are healthy and best in taste. It is focused on supplying the very best food to its customers throughout the day and night.


Business has a wide variety of items that it offers to its customers. Its products include food for infants, cereals, dairy items, snacks, chocolates, food for pet and bottled water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 staff members. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the business has actually set its goals and goals. These objectives and goals are listed below.
• One objective of the business is to reach no garbage dump status. It is pursuing absolutely no 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 objective of Managing For Shareholder Value From Top To Bottom is to waste minimum food during production. Most often, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is working on is to enhance its packaging in such a way that it would help it to lower the above-mentioned complications and would also guarantee the shipment of high quality of its items to its clients.
• Meet worldwide standards of the environment.
• Build a relationship based on trust with its consumers, service partners, staff members, and federal government.

Critical Issues

Just Recently, Business Business is focusing more towards the method of NHW and investing more of its earnings on the R&D technology. The nation is investing more on acquisitions and mergers to support its NHW strategy. 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%, given in Display H. There is a need to focus more on the sales then the innovation technology. Otherwise, it might lead to the declined earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based on the principle of Nutritious, Health and Wellness (NHW). This method handles the concept to bringing modification in the consumer preferences about food and making the food stuff much healthier worrying about the health issues.
The vision of this method is based upon the key approach i.e. 60/40+ which simply suggests that the items will have a rating of 60% on the basis of taste and 40% is based on its dietary worth. The items will be made with extra dietary worth in contrast to all other products in market getting it a plus on its dietary content.
This method was embraced to bring more yummy plus healthy foods and drinks in market than ever. In competition with other business, with an intention of retaining its trust over customers as Business Business has actually gotten more trusted by clients.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing actual amount of spending 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 portion of sales is decreasing. This indicator likewise reveals a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of debts. This increasing financial obligation ratio position a danger of default of Business to its financiers and might lead a declining share prices. Therefore, in terms of increasing financial obligation ratio, the company needs to not invest much on R&D and must pay its current financial obligations to decrease the threat for investors.
The increasing risk of financiers with increasing debt ratio and declining share costs can be observed by substantial decline of EPS of Managing For Shareholder Value From Top To Bottom stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow perception building of customers. This slow development also prevent company to further 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 calculations and Charts given up the Displays D and E.

TWOS Analysis

TWOS analysis can be utilized to derive various strategies based on the SWOT Analysis given above. A brief summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should introduce more ingenious items by large amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the revenue margins for the company. It might likewise offer Business a long term competitive benefit over its competitors.
The international growth of Business need to be concentrated on market recording of developing countries by growth, attracting more customers through consumer's commitment. As establishing countries are more populous than industrialized countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisManaging For Shareholder Value From Top To Bottom must do mindful acquisition and merger of organizations, as it could affect the client's and society's understandings about Business. It should obtain and combine with those business which have a market credibility of healthy and nutritious business. It would enhance the perceptions of consumers about Business.
Business needs to not just spend its R&D on innovation, rather than it must also concentrate on the R&D costs over assessment of cost of numerous nutritious items. This would increase cost effectiveness of its items, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business needs to transfer to not only establishing but also to developed countries. It ought to broadens its geographical expansion. This wide geographical growth towards establishing and developed countries would lower the threat of prospective losses in times of instability in numerous nations. It must broaden its circle to numerous countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Managing For Shareholder Value From Top To Bottom should sensibly control its acquisitions to prevent the danger of mistaken belief from the customers about Business. It should obtain and combine with those countries having a goodwill of being a healthy business in the market. This would not only enhance the understanding of customers about Business but would likewise increase the sales, earnings margins and market share of Business. It would also make it possible for the company to use its possible resources efficiently on its other operations instead of acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 factors; age, gender, income and occupation. For instance, Business produces a number of products connected to babies i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary products. Managing For Shareholder Value From Top To Bottom products are quite economical by almost all levels, but its significant targeted clients, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in almost 86 nations. Its geographical segmentation is based upon two main aspects i.e. average earnings level of the consumer along with the environment of the area. For example, Singapore Business Business'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 life style of the consumer. For example, Business 3 in 1 Coffee target those consumers whose lifestyle is quite hectic and don't have much time.

Behavioral Segmentation

Managing For Shareholder Value From Top To Bottom behavioral segmentation is based upon the mindset understanding and awareness of the consumer. For example its extremely healthy products target those consumers who have a health mindful mindset towards their consumptions.

Managing For Shareholder Value From Top To Bottom Alternatives

In order to sustain the brand in the market and keep the client intact with the brand name, there are two choices:
Alternative: 1
The Company ought to invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall assets of the company, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The business can resell the obtained units in the market, if it fails to implement its technique. Quantity invest on the R&D could not be restored, and it will be considered entirely sunk cost, if it do not give prospective outcomes.
3. Spending on R&D provide sluggish growth in sales, as it takes long period of time to introduce a product. However, acquisitions offer fast results, as it provide the business currently established product, which can be marketed soon after the acquisition.
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the company to deal with mistaken belief of customers about Business core worths of healthy and healthy products.
2 Large costs on acquisitions than R&D would send out a signal of business's inadequacy of developing innovative items, and would outcomes in customer's discontentment.
3. Big acquisitions than R&D would extend the product line of the company by the items which are currently present in the market, making business unable to present brand-new innovative items.
Option: 2.
The Company ought to 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 company a strong competitive position in the market.
3. It would allow the company to increase its targeted customers by presenting those items which can be offered to a completely new market section.
4. Ingenious products will provide long term benefits and high market share in long run.
1. It would decrease the profit margins of the company.
2. In case of failure, the entire costs on R&D would be considered as sunk cost, and would affect the business at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer an unfavorable signal to the financiers, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to present brand-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 overall possessions of the company would increase with its significant R&D costs.
3. It would not impact the revenue margins of the company 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 business's general wealth in addition to in regards to ingenious items.
1. Threat of conversion of R&D spending into sunk expense, higher than alternative 1 lesser than alternative 2.
2. Risk of misconception about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less number of innovative products than alternative 2 and high number of innovative products than alternative 1.

Managing For Shareholder Value From Top To Bottom Conclusion

RecommendationsIt has institutionalised its strategies and culture to align itself with the market changes and consumer habits, which has actually eventually permitted it to sustain its market share. Business has actually developed substantial market share and brand identity in the metropolitan markets, it is suggested that the company needs to focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by creating a specific brand allocation strategy through trade marketing techniques, that draw clear distinction in between Managing For Shareholder Value From Top To Bottom products and other competitor items.

Managing For Shareholder Value From Top To Bottom Exhibits

PESTEL Analysis
Governmental support

Transforming standards of worldwide food.
Improved market share. Changing understanding towards healthier items Improvements in R&D and also QA departments.

Intro of E-marketing.
No such influence as it is good. Problems over recycling.

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 2000 Highest after Service with less development than Organisation 4th Least expensive
R&D Spending Highest possible given that 2007 Greatest after Service 3rd Lowest
Net Profit Margin Highest possible considering that 2001 with rapid development from 2009 to 2018 Because of sale of Alcon in 2014. Virtually equal to Kraft Foods Incorporation Practically equal to Unilever N/A
Competitive Advantage Food with Nutrition and also wellness factor Highest possible variety of brands with sustainable methods Biggest confectionary and also refined foods brand name on the planet Largest milk products as well as bottled water brand in the world
Segmentation Center and also top center level customers worldwide Individual customers together with house team Every age and also Revenue Consumer Groups Middle as well as top middle level customers worldwide
Number of Brands 7th 1st 5th 3rd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 44414 827343 333123 423738 454221
Net Profit Margin 5.82% 4.66% 22.41% 1.55% 36.15%
EPS (Earning Per Share) 73.53 6.21 7.45 6.76 62.79
Total Asset 958853 931592 144233 753881 82172
Total Debt 19763 31952 26848 62416 76346
Debt Ratio 47% 52% 47% 97% 34%
R&D Spending 7523 2843 7952 2648 4827
R&D Spending as % of Sales 6.91% 3.88% 8.61% 6.58% 8.43%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations