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New Product Development Map Case Study Solution

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New Product Development Map Case Study Solution

New Product Development Map is presently among the greatest food cycle worldwide. It was established by Darden in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed babies and reduce mortality rate. At the same time, the Page brothers from Switzerland also found The Anglo-Swiss Condensed Milk Business. The two ended up being competitors initially however later on merged in 1905, leading to the birth of New Product Development Map.
Business is now a global business. Unlike other multinational business, it has senior executives from various countries and tries to make choices thinking about the entire world. New Product Development Map presently has more than 500 factories around the world and a network spread throughout 86 countries.

Purpose

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

Vision

New Product Development Map's vision is to provide its clients with food that is healthy, high in quality and safe to consume. Business envisions to develop a well-trained workforce which would help the company to grow
.

Mission

New Product Development Map's objective is that as presently, it is the leading business in the food industry, it believes in 'Good Food, Excellent Life". Its objective is to provide its customers with a variety of options that are healthy and best in taste. It is focused on providing the very best food to its customers throughout the day and night.

Products.

New Product Development Map has a wide variety of items that it provides to its clients. 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 actually laid down its goals and objectives. These objectives and goals are noted below.
• One objective of the business is to reach zero garbage dump status. (Business, aboutus, 2017).
• Another goal of New Product Development Map is to waste minimum food during production. Most often, the food produced is lost even prior to it reaches the clients.
• Another thing that Business is dealing with is to improve its packaging in such a way that it would help it to decrease those problems and would also guarantee the delivery of high quality of its products to its clients.
• Meet global requirements of the environment.
• Build a relationship based upon trust with its consumers, business partners, staff members, and 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 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 anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Exhibition H. There is a need to focus more on the sales then the innovation technology. Otherwise, it may result in the decreased earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business technique is based on the idea of Nutritious, Health and Wellness (NHW). This strategy handles the idea 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 technique is based upon the key method i.e. 60/40+ which merely implies that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary worth. The items will be produced with extra nutritional worth in contrast to all other products in market getting it a plus on its dietary material.
This technique was adopted to bring more delicious plus healthy foods and beverages in market than ever. In competition with other business, with an intent of maintaining its trust over consumers as Business Business has actually gotten more trusted by clients.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing actual amount of costs shows that the sales are increasing at a higher rate than its R&D costs, and enable the company to more invest in R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This sign also shows a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing debt ratio position a danger of default of Business to its investors and might lead a decreasing share rates. In terms of increasing financial obligation ratio, the company ought to not invest much on R&D and should pay its existing debts to reduce the risk for financiers.
The increasing danger of investors with increasing financial obligation ratio and declining share rates can be observed by big decline of EPS of New Product Development Map stocks.
The sales development of company is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This slow growth likewise impede company 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 calculations and Charts given up the Exhibitions D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative products by large quantity of R&D Spending and mergers and acquisitions. It might increase the market share of Business and increase the profit margins for the business. It might also supply Business a long term competitive benefit over its competitors.
The international expansion of Business must be concentrated on market catching of developing countries by expansion, attracting more customers through customer's loyalty. As establishing nations are more populated than developed nations, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisNew Product Development Map ought to do mindful acquisition and merger of companies, as it could impact the customer's and society's understandings about Business. It needs to obtain and combine with those business which have a market reputation of healthy and healthy companies. It would improve the understandings of consumers about Business.
Business ought to not just spend its R&D on development, rather than it must likewise focus on the R&D spending over examination of cost of numerous healthy products. This would increase expense performance of its products, which will result in increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business must move to not just establishing however also to industrialized nations. It should widen its circle to different nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must get and merge with those nations having a goodwill of being a healthy business in the market. It would likewise make it possible for the company to utilize its prospective resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based on four elements; age, gender, earnings and profession. For instance, Business produces numerous products associated with infants i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary products. New Product Development Map items are rather inexpensive by almost all levels, but its major targeted clients, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is made up of its presence in practically 86 nations. Its geographical segmentation is based upon 2 main elements i.e. average income level of the consumer as well as the climate of the area. For instance, 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 division of Business is based upon the personality and life style of the consumer. Business 3 in 1 Coffee target those customers whose life style is quite hectic and do not have much time.

Behavioral Segmentation

New Product Development Map behavioral segmentation is based upon the attitude knowledge and awareness of the consumer. For example its highly nutritious items target those clients who have a health conscious attitude towards their consumptions.

New Product Development Map Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand, there are 2 choices:
Option: 1
The Company should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the company. However, costs on R&D would be sunk cost.
2. The business can resell the acquired units in the market, if it stops working to execute its technique. However, amount invest in the R&D might not be revived, and it will be considered entirely sunk expense, if it do not provide potential outcomes.
3. Spending on R&D supply slow development in sales, as it takes long period of time to introduce an item. However, acquisitions provide quick outcomes, as it provide the business already established product, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the business to face misunderstanding of customers about Business core values of healthy and nutritious products.
2 Big costs on acquisitions than R&D would send out a signal of business's ineffectiveness of establishing ingenious items, and would outcomes in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the line of product of the company by the products which are already present in the market, making business unable to introduce new innovative products.
Alternative: 2.
The Business should spend more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the company to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would enable the business to increase its targeted clients by introducing those products which can be provided to a completely brand-new market sector.
4. Innovative products will offer long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the business.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would affect the company at big. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which might provide a negative signal to the financiers, and could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the company to present brand-new innovative products with less danger of transforming the spending on R&D into sunk cost.
2. It would supply a positive signal to the financiers, as the general properties of the business would increase with its considerable R&D costs.
3. It would not affect the profit margins of the business at a big rate as compare to alternative 2.
4. It would supply the company a strong long term market position in terms of the business's total wealth as well as in terms of ingenious products.
Cons:
1. Risk of conversion of R&D spending into sunk expense, greater than option 1 lesser than alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less variety of innovative products than alternative 2 and high variety of innovative items than alternative 1.

New Product Development Map Conclusion

RecommendationsBusiness has stayed the leading market gamer for more than a decade. It has institutionalised its strategies and culture to align itself with the marketplace changes and customer habits, which has ultimately permitted it to sustain its market share. Though, Business has actually developed significant market share and brand identity in the metropolitan markets, it is recommended that the business needs to focus on the backwoods in terms of establishing brand commitment, awareness, and equity, such can be done by producing a particular brand allocation strategy through trade marketing tactics, that draw clear difference in between New Product Development Map products and other competitor items. Additionally, Business should leverage 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 allow the business to develop brand equity for freshly introduced and currently produced items on a greater platform, making the reliable usage of resources and brand image in the market.

New Product Development Map Exhibits

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

Changing standards of global food.
Boosted market share.
Transforming assumption towards much healthier products
Improvements in R&D and also QA divisions.

Introduction of E-marketing.
No such impact as it is beneficial.
Worries over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest given that 9000
Greatest after Service with less development than Organisation 3rd Most affordable
R&D Spending Highest because 2002 Highest after Company 8th Cheapest
Net Profit Margin Greatest since 2003 with fast development from 2005 to 2018 Due to sale of Alcon in 2013. Almost equal to Kraft Foods Unification Nearly equal to Unilever N/A
Competitive Advantage Food with Nourishment and also wellness element Greatest variety of brands with sustainable methods Biggest confectionary and also refined foods brand on the planet Biggest dairy items as well as mineral water brand name worldwide
Segmentation Middle as well as upper middle level consumers worldwide Private clients in addition to family group Any age as well as Income Consumer Teams Center and also upper center degree customers worldwide
Number of Brands 4th 8th 4th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 42663 766459 432347 848788 167565
Net Profit Margin 5.15% 2.19% 58.69% 8.78% 37.64%
EPS (Earning Per Share) 84.88 1.48 7.67 4.43 23.34
Total Asset 313891 727563 981946 171334 79928
Total Debt 78338 68144 22446 98949 27712
Debt Ratio 91% 86% 41% 76% 31%
R&D Spending 7794 7482 6679 6726 6384
R&D Spending as % of Sales 2.55% 5.67% 7.57% 8.37% 2.41%

New Product Development Map Executive Summary New Product Development Map Swot Analysis New Product Development Map Vrio Analysis New Product Development Map Pestel Analysis
New Product Development Map Porters Analysis New Product Development Map Recommendations