Paint Pen Inc Case Study Analysis

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Paint Pen Inc Case Study Analysis

Paint Pen Inc is currently one of the greatest food chains worldwide. It was founded by Darden in 1866, a German Pharmacist who first launched "FarineLactee"; a combination of flour and milk to feed infants and decrease death rate. At the exact same time, the Page siblings from Switzerland also discovered The Anglo-Swiss Condensed Milk Business. The 2 ended up being rivals at first but later on merged in 1905, leading to the birth of Paint Pen Inc.
Business is now a transnational business. Unlike other multinational companies, it has senior executives from different countries and tries to make decisions thinking about the entire world. Paint Pen Inc presently has more than 500 factories worldwide and a network spread across 86 nations.


The purpose of Paint Pen Inc Corporation is to improve the quality of life of people by playing its part and supplying healthy food. It wants to help the world in forming a healthy and much better future for it. It also wants to motivate people to live a healthy life. 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


Paint Pen Inc's vision is to supply its consumers with food that is healthy, high in quality and safe to consume. It wishes to be innovative and concurrently comprehend the requirements and requirements of its clients. Its vision is to grow quick and offer products that would please the requirements of each age group. Paint Pen Inc visualizes to establish a trained labor force which would help the business to grow


Paint Pen Inc's objective is that as currently, it is the leading business in the food market, it believes in 'Great Food, Excellent Life". Its mission is to offer its consumers with a range of options that are healthy and best in taste as well. It is concentrated on supplying the very best food to its clients throughout the day and night.


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

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the company has laid down its goals and objectives. These goals and objectives are listed below.
• One goal of the company is to reach zero garbage dump status. It is working toward absolutely no waste, where no waste of the factory is landfilled. It motivates its staff members to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Paint Pen Inc is to squander minimum food throughout production. Frequently, the food produced is squandered even before it reaches the clients.
• Another thing that Business is working on is to enhance its packaging in such a way that it would help it to reduce the above-mentioned problems and would also ensure the shipment of high quality of its items to its clients.
• Meet worldwide standards of the environment.
• Develop a relationship based on trust with its customers, service partners, workers, and federal government.

Critical Issues

Recently, Business Company 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 expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business technique is based upon the concept of Nutritious, Health and Health (NHW). This method deals with the concept to bringing modification in the client choices about food and making the food stuff much healthier worrying about the health problems.
The vision of this method is based upon the secret technique i.e. 60/40+ which just suggests that the products will have a rating of 60% on the basis of taste and 40% is based upon its dietary worth. The items will be manufactured with additional dietary worth in contrast to all other items in market getting it a plus on its nutritional material.
This technique was embraced to bring more tasty plus healthy foods and drinks in market than ever. In competition with other business, with an intention of retaining its trust over clients as Business Business has gotten more relied on by clients.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing actual quantity of spending shows that the sales are increasing at a greater rate than its R&D costs, and permit the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This sign likewise shows a thumbs-up to the R&D costs, mergers and acquisitions.
Debt ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of debts. This increasing financial obligation ratio present a danger of default of Business to its investors and might lead a declining share prices. Therefore, in regards to increasing financial obligation ratio, the firm ought to not invest much on R&D and must pay its present financial obligations to decrease the risk for financiers.
The increasing danger of investors with increasing financial obligation ratio and declining share prices can be observed by huge decrease of EPS of Paint Pen Inc stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow perception building of customers. This sluggish growth also prevent company to further spend on 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 derive numerous methods 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 ought to present more ingenious products 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 could also provide Business a long term competitive advantage over its competitors.
The worldwide growth of Business need to be concentrated on market catching of developing nations by growth, bring in more consumers through client's loyalty. As establishing countries are more populated than developed countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisPaint Pen Inc must do careful acquisition and merger of organizations, as it might impact the customer's and society's perceptions about Business. It must obtain and merge with those business which have a market track record of healthy and nutritious business. It would improve the understandings of consumers about Business.
Business should not just spend its R&D on innovation, instead of it must likewise focus on the R&D spending over examination of cost of different nutritious items. This would increase cost effectiveness of its products, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business needs to transfer to not only establishing but also to industrialized countries. It must widens its geographical growth. This wide geographical expansion towards establishing and established countries would reduce the risk of possible losses in times of instability in different nations. It must expand its circle to different countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It should get and combine with those countries having a goodwill of being a healthy business in the market. It would likewise make it possible for the company to use its prospective resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on four elements; age, gender, income and occupation. Business produces several products related to infants i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary products. Paint Pen Inc products are rather cost effective by practically all levels, but its major targeted clients, in regards to income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its presence in nearly 86 countries. Its geographical division is based upon two main factors i.e. typical income level of the consumer along with the environment of the region. Singapore Business Business's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and lifestyle of the customer. For instance, Business 3 in 1 Coffee target those consumers whose life style is quite busy and do not have much time.

Behavioral Segmentation

Paint Pen Inc behavioral segmentation is based upon the mindset understanding and awareness of the customer. Its extremely nutritious products target those consumers who have a health conscious attitude towards their consumptions.

Paint Pen Inc Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand, there are two choices:
Option: 1
The Business must invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall assets of the company, increasing the wealth of the business. Nevertheless, spending on R&D would be sunk cost.
2. The business can resell the obtained units in the market, if it stops working to execute its technique. Amount spend on the R&D could not be revived, and it will be considered completely sunk expense, if it do not offer potential outcomes.
3. Spending on R&D provide sluggish development in sales, as it takes long period of time to present an item. Acquisitions supply fast outcomes, as it provide the company currently established product, which can be marketed quickly after the acquisition.
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the business to deal with misunderstanding of consumers about Business core worths of healthy and healthy products.
2 Big costs on acquisitions than R&D would send a signal of business's inefficiency of establishing innovative items, and would results in consumer's discontentment.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are currently present in the market, making business unable to introduce new innovative items.
Alternative: 2.
The Company needs to invest more on its R&D rather than acquisitions.
1. It would allow the business to produce more innovative products.
2. It would supply the business a strong competitive position in the market.
3. It would enable the company to increase its targeted customers by introducing those products which can be provided to a totally brand-new market sector.
4. Innovative items will supply long term advantages and high market share in long run.
1. It would decrease the revenue margins of the business.
2. In case of failure, the entire spending on R&D would be thought about 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 could supply a negative signal to the financiers, and could result I decreasing 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 introduce brand-new ingenious products with less threat of transforming the spending on R&D into sunk expense.
2. It would offer a favorable signal to the investors, as the general properties of the company would increase with its substantial R&D costs.
3. It would not affect the revenue margins of the company at a large rate as compare to alternative 2.
4. It would provide the company a strong long term market position in regards to the business's general wealth along with in regards to ingenious items.
1. Threat of conversion of R&D spending into sunk expense, greater than alternative 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lower than option 1.
3. Intro of less number of innovative products than alternative 2 and high number of innovative items than alternative 1.

Paint Pen Inc Conclusion

RecommendationsBusiness has remained the leading market player for more than a years. It has institutionalized its methods and culture to align itself with the market changes and consumer habits, which has eventually enabled it to sustain its market share. Though, Business has actually established considerable market share and brand identity in the city markets, it is suggested that the company needs to focus on the rural areas in regards to developing brand name commitment, awareness, and equity, such can be done by developing a particular brand name allotment technique through trade marketing tactics, that draw clear difference in between Paint Pen Inc items and other competitor products. Moreover, Business needs to take advantage of its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will allow the company to develop brand equity for newly introduced and currently produced products on a higher platform, making the efficient usage of resources and brand name image in the market.

Paint Pen Inc Exhibits

PESTEL Analysis
Governmental assistance

Changing standards of worldwide food.
Improved market share. Changing perception towards healthier items Improvements in R&D as well as QA departments.

Intro of E-marketing.
No such impact as it is favourable. Issues over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest given that 7000 Greatest after Service with less development than Service 1st Least expensive
R&D Spending Highest since 2006 Highest after Organisation 5th Lowest
Net Profit Margin Greatest considering that 2005 with fast growth from 2008 to 2012 Due to sale of Alcon in 2017. Virtually equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as wellness variable Highest possible variety of brand names with lasting methods Biggest confectionary and processed foods brand name in the world Largest dairy products and bottled water brand worldwide
Segmentation Middle as well as top middle level customers worldwide Individual clients along with family group Any age as well as Income Customer Teams Center as well as top middle degree consumers worldwide
Number of Brands 1st 2nd 1st 3rd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 17295 916988 647622 864345 138922
Net Profit Margin 1.28% 8.46% 92.52% 2.53% 17.96%
EPS (Earning Per Share) 87.52 4.33 2.21 7.98 81.57
Total Asset 348824 877448 884481 131649 88827
Total Debt 62157 21731 89358 95864 69342
Debt Ratio 53% 94% 52% 94% 51%
R&D Spending 8869 8141 4914 8239 9888
R&D Spending as % of Sales 4.25% 2.13% 7.97% 6.73% 4.32%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations