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Mothers Work Case Study Solution

Business is presently one of the greatest food chains worldwide. It was founded by Henri Mothers Work in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and reduce mortality rate.
Business is now a transnational business. Unlike other international companies, it has senior executives from different nations and attempts to make decisions considering the whole world. Mothers Work currently has more than 500 factories worldwide and a network spread across 86 countries.

Purpose

The purpose of Business Corporation is to boost the quality of life of individuals by playing its part and providing healthy food. While making sure that the business is prospering in the long run, that's how it plays its part for a much better and healthy future

Vision

Mothers Work's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. It wishes to be innovative and concurrently understand the requirements and requirements of its consumers. Its vision is to grow quick and provide items that would please the requirements of each age group. Mothers Work imagines to establish a trained workforce which would help the company to grow
.

Mission

Mothers Work's mission is that as currently, it is the leading business in the food market, it thinks in 'Excellent Food, Good Life". Its objective is to offer its consumers with a variety of choices that are healthy and finest in taste as well. It is concentrated on supplying the best food to its clients throughout the day and night.

Products.

Business has a wide variety of products that it uses to its clients. Its products consist of food for babies, cereals, dairy products, snacks, chocolates, food for family pet and bottled water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 workers. In 2011, Business was noted as the most rewarding company.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the company has actually put down its goals and goals. These objectives and objectives are noted below.
• One objective of the business is to reach zero land fill status. It is pursuing absolutely no waste, where no waste of the factory is landfilled. It encourages its staff members to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of Mothers Work is to squander minimum food throughout 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 packaging in such a way that it would help it to minimize those issues and would likewise ensure the delivery of high quality of its products to its customers.
• Meet worldwide requirements of the environment.
• Construct a relationship based upon trust with its customers, business partners, employees, and federal government.

Critical Issues

Just Recently, Business Business is focusing more towards the strategy 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 method. The target of the company is not accomplished 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 Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business strategy is based on the idea of Nutritious, Health and Health (NHW). This technique handles the idea to bringing change in the client choices about food and making the food stuff healthier worrying about the health issues.
The vision of this technique is based upon the key approach i.e. 60/40+ which merely indicates that the items will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The products will be made with additional nutritional worth in contrast to all other items in market acquiring it a plus on its nutritional content.
This strategy was embraced to bring more tasty plus nutritious foods and drinks in market than ever. In competition with other business, with an intention of retaining its trust over consumers as Business Business has acquired more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing real quantity of costs shows that the sales are increasing at a greater rate than its R&D spending, and allow the business to more spend on R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This sign also shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation 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 financial obligation ratio position a risk of default of Business to its financiers and might lead a declining share rates. In terms of increasing financial obligation ratio, the firm needs to not spend much on R&D and must pay its existing financial obligations to reduce the danger for financiers.
The increasing threat of financiers with increasing financial obligation ratio and declining share rates can be observed by huge decline of EPS of Mothers Work stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow perception structure of consumers. This slow growth also prevent company 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 estimations and Charts given up the Displays D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business ought to present more innovative products by big amount 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 also provide Business a long term competitive benefit over its rivals.
The worldwide growth of Business ought to be focused on market catching of establishing nations by growth, attracting more consumers through customer's commitment. As establishing countries are more populated than developed nations, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMothers Work should do cautious acquisition and merger of organizations, as it could affect the consumer's and society's perceptions about Business. It must get and merge with those companies which have a market reputation of healthy and healthy business. It would enhance the understandings of consumers about Business.
Business should not only invest its R&D on innovation, instead of it must likewise concentrate on the R&D spending over assessment of expense of different nutritious products. This would increase expense efficiency of its items, which will lead to increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business needs to relocate to not only developing however likewise to industrialized nations. It must widens its geographical growth. This large geographical expansion towards developing and developed nations would reduce the danger of potential losses in times of instability in different nations. It should widen its circle to different countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It ought to get and merge with those countries having a goodwill of being a healthy company in the market. It would likewise allow the business to utilize its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The demographic division of Business is based on four factors; age, gender, earnings and occupation. Business produces a number of items related to children i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Mothers Work products are rather budget-friendly by practically all levels, but its major targeted customers, in regards to income level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in almost 86 nations. Its geographical segmentation is based upon two main elements i.e. average income level of the consumer as well as the climate of the area. 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 character and life style of the customer. For example, Business 3 in 1 Coffee target those customers whose life style is quite busy and don't have much time.

Behavioral Segmentation

Mothers Work behavioral division is based upon the attitude knowledge and awareness of the client. Its extremely nutritious items target those clients who have a health mindful attitude towards their consumptions.

Mothers Work Alternatives

In order to sustain the brand in the market and keep the customer intact with the brand name, there are 2 alternatives:
Alternative: 1
The Company should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the company. Spending on R&D would be sunk cost.
2. The company can resell the gotten systems in the market, if it stops working to implement its method. However, amount invest in the R&D might not be revived, and it will be thought about entirely sunk cost, if it do not give potential results.
3. Spending on R&D supply sluggish development in sales, as it takes very long time to introduce an item. However, acquisitions offer quick results, as it provide the company currently established item, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the company to deal with mistaken belief of customers about Business core values of healthy and healthy products.
2 Big costs on acquisitions than R&D would send out a signal of business's inadequacy of developing innovative items, and would outcomes in consumer's dissatisfaction.
3. Large acquisitions than R&D would extend the line of product of the business by the items which are currently present in the market, making company unable to present brand-new ingenious items.
Alternative: 2.
The Business should invest more on its R&D instead of acquisitions.
Pros:
1. It would allow the business to produce more ingenious items.
2. It would supply the company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by presenting those products which can be used to an entirely brand-new market section.
4. Innovative items will provide long term benefits and high market share in long run.
Cons:
1. It would reduce the revenue margins of the company.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would impact the business at big. The danger 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 substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to present brand-new ingenious items with less threat of converting the spending on R&D into sunk cost.
2. It would offer a positive 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 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 business's total wealth along with in terms of ingenious products.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than alternative 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less variety of ingenious items than alternative 2 and high variety of innovative products than alternative 1.

Mothers Work Conclusion

RecommendationsBusiness has actually stayed the leading market gamer for more than a decade. It has actually institutionalized its methods and culture to align itself with the marketplace changes and consumer habits, which has ultimately allowed it to sustain its market share. Though, Business has developed substantial market share and brand name identity in the metropolitan markets, it is suggested that the company ought to focus on the backwoods in terms of developing brand commitment, awareness, and equity, such can be done by developing a specific brand allotment technique through trade marketing strategies, that draw clear difference in between Mothers Work items and other competitor products. Furthermore, Business must utilize its brand name picture of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will enable the business to establish brand name equity for newly presented and already produced products on a greater platform, making the reliable use of resources and brand name image in the market.

Mothers Work Exhibits

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

Altering criteria of global food.
Boosted market share.
Changing perception in the direction of much healthier items
Improvements in R&D as well as QA divisions.

Introduction of E-marketing.
No such impact as it is favourable.
Problems over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest since 8000
Highest after Business with much less growth than Company 2nd Lowest
R&D Spending Highest possible since 2005 Highest possible after Organisation 3rd Most affordable
Net Profit Margin Highest possible given that 2001 with fast growth from 2004 to 2014 Because of sale of Alcon in 2019. Nearly equal to Kraft Foods Consolidation Nearly equal to Unilever N/A
Competitive Advantage Food with Nutrition and also health and wellness variable Greatest variety of brand names with sustainable techniques Largest confectionary and also refined foods brand on the planet Largest milk items and also bottled water brand name worldwide
Segmentation Center and top middle level customers worldwide Private consumers along with household team Any age and also Revenue Client Groups Center and also upper middle level consumers worldwide
Number of Brands 6th 2nd 5th 1st

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 92595 863221 885737 572885 328521
Net Profit Margin 7.87% 4.51% 76.63% 5.81% 47.71%
EPS (Earning Per Share) 87.35 2.51 4.17 7.36 46.21
Total Asset 255286 366336 462417 213328 18811
Total Debt 85758 27833 38322 39111 85957
Debt Ratio 73% 41% 36% 93% 49%
R&D Spending 8947 3115 1897 1699 3134
R&D Spending as % of Sales 9.97% 2.96% 5.18% 2.49% 5.42%

Mothers Work Executive Summary Mothers Work Swot Analysis Mothers Work Vrio Analysis Mothers Work Pestel Analysis
Mothers Work Porters Analysis Mothers Work Recommendations