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Paint Pen Inc Case Study Solution

Paint Pen Inc is presently one of the greatest food chains worldwide. It was founded by Darden in 1866, a German Pharmacist who first introduced "FarineLactee"; a mix of flour and milk to feed infants and reduce mortality rate. At the very same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The 2 ended up being rivals initially but later combined in 1905, resulting in the birth of Paint Pen Inc.
Business is now a multinational company. Unlike other multinational business, it has senior executives from different countries and attempts to make decisions considering the entire world. Paint Pen Inc currently has more than 500 factories around the world and a network spread throughout 86 nations.

Purpose

The function of Paint Pen Inc Corporation is to improve the quality of life of individuals by playing its part and supplying healthy food. It wants to help the world in shaping a healthy and better future for it. It likewise wants to encourage people to live a healthy life. While making sure that the company is prospering in the long run, that's how it plays its part for a much better and healthy future

Vision

Paint Pen Inc's vision is to supply its clients with food that is healthy, high in quality and safe to consume. Business imagines to develop a trained workforce which would help the business to grow
.

Mission

Paint Pen Inc's mission is that as currently, it is the leading business in the food industry, it thinks in 'Excellent Food, Great Life". Its mission is to supply its consumers with a variety of choices that are healthy and best in taste. It is concentrated on offering the best food to its consumers throughout the day and night.

Products.

Paint Pen Inc has a broad range of items that it provides to its clients. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has set its goals and goals. These goals and goals are noted below.
• One objective of the business is to reach zero land fill status. (Business, aboutus, 2017).
• Another goal of Paint Pen Inc is to waste minimum food during production. Frequently, the food produced is lost even prior to it reaches the clients.
• Another thing that Business is working on is to enhance its packaging in such a method that it would help it to minimize the above-mentioned problems and would likewise guarantee the shipment of high quality of its items to its consumers.
• Meet international requirements of the environment.
• Develop a relationship based upon trust with its consumers, company partners, employees, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the technique of NHW and investing more of its revenues on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW method. The target of the business 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 Exhibition H. There is a need to focus more on the sales then the innovation technology. Otherwise, it might result in the decreased income rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based on the concept of Nutritious, Health and Wellness (NHW). This strategy deals with the concept to bringing change in the client preferences about food and making the food things much healthier worrying about the health issues.
The vision of this method is based upon the secret technique i.e. 60/40+ which simply indicates that the items will have a rating of 60% on the basis of taste and 40% is based upon its nutritional value. The items will be made with extra nutritional worth in contrast to all other items in market acquiring it a plus on its dietary material.
This strategy was adopted to bring more tasty plus healthy foods and beverages in market than ever. In competition with other business, with an objective of maintaining its trust over customers as Business Company has gotten more relied on by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing real amount of costs reveals that the sales are increasing at a higher rate than its R&D costs, and enable the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign also reveals a green light to the R&D costs, mergers and acquisitions.
Financial obligation 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 pose a hazard of default of Business to its financiers and could lead a decreasing share costs. Therefore, in terms of increasing debt ratio, the firm ought to not spend much on R&D and must pay its existing financial obligations to reduce the threat for investors.
The increasing danger of investors with increasing debt ratio and decreasing share rates can be observed by substantial decrease of EPS of Paint Pen Inc stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow perception structure of consumers. This slow growth likewise impede company to further 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 Exhibitions D and E.

TWOS Analysis


TWOS analysis can be used to derive various techniques based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business must present more innovative products by large quantity of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the profit margins for the business. It could also supply Business a long term competitive benefit over its rivals.
The international expansion of Business should be concentrated on market catching of developing countries by expansion, drawing in more consumers through customer's commitment. As developing 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 could impact the consumer's and society's understandings about Business. It must obtain and combine with those business which have a market reputation of healthy and healthy business. It would enhance the understandings of customers about Business.
Business should not just invest its R&D on development, rather than it must also concentrate on the R&D costs over assessment of expense of numerous healthy items. This would increase expense efficiency of its products, which will lead to increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business needs to transfer to not just establishing but also to developed countries. It should expands its geographical expansion. This large geographical expansion towards establishing and established countries would lower the threat of prospective losses in times of instability in different countries. It needs to expand its circle to different nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Paint Pen Inc must sensibly manage its acquisitions to avoid the risk of misconception from the consumers about Business. It must obtain and combine with those nations having a goodwill of being a healthy business in the market. This would not just enhance the perception of consumers about Business but would also increase the sales, revenue margins and market share of Business. It would likewise make it possible for the company to utilize its possible resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based upon 4 factors; age, gender, income and profession. Business produces a number of products related to infants i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Paint Pen Inc products are rather cost effective by practically all levels, but its significant targeted consumers, in regards to income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in practically 86 nations. Its geographical division is based upon 2 primary factors i.e. typical income level of the customer as well as the climate of the area. 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 personality and life style of the consumer. Business 3 in 1 Coffee target those consumers whose life style is rather hectic and do not have much time.

Behavioral Segmentation

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

Paint Pen Inc Alternatives

In order to sustain the brand name in the market and keep the consumer intact with the brand name, there are 2 alternatives:
Option: 1
The Business should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total properties of the business, increasing the wealth of the business. Costs on R&D would be sunk cost.
2. The company can resell the acquired systems in the market, if it fails to execute its method. Quantity invest on the R&D could not be revived, and it will be thought about totally sunk cost, if it do not provide possible outcomes.
3. Spending on R&D offer slow development in sales, as it takes long period of time to present a product. Acquisitions supply quick results, as it offer the company already 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 nutritious products.
2 Big spending on acquisitions than R&D would send a signal of business's ineffectiveness of developing ingenious items, and would outcomes 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 company not able to present new innovative products.
Alternative: 2.
The Company needs to invest more on its R&D instead of acquisitions.
Pros:
1. It would enable the company to produce more ingenious products.
2. It would supply the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted customers by presenting those items which can be offered to an entirely brand-new market segment.
4. Ingenious products will offer long term advantages and high market share in long run.
Cons:
1. It would reduce the profit margins of the company.
2. In case of failure, the whole costs on R&D would be considered as sunk expense, and would affect the business at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of business, which might supply a negative signal to the financiers, and could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would allow the company to introduce new ingenious items with less threat of transforming the spending on R&D into sunk expense.
2. It would provide a favorable signal to the financiers, as the overall possessions of the company would increase with its significant R&D spending.
3. It would not impact the revenue margins of the company at a large rate as compare to alternative 2.
4. It would offer the company a strong long term market position in regards to the company's overall wealth in addition to in regards to innovative items.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than option 1 lower than alternative 2.
2. Danger of misunderstanding about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less number of ingenious products than alternative 2 and high number of innovative products than alternative 1.

Paint Pen Inc Conclusion

RecommendationsBusiness has actually stayed the top market gamer for more than a years. It has institutionalised its strategies and culture to align itself with the marketplace changes and consumer behavior, which has ultimately allowed it to sustain its market share. Business has developed substantial market share and brand identity in the metropolitan markets, it is recommended that the business should focus on the rural areas in terms of developing brand name commitment, awareness, and equity, such can be done by developing a specific brand allotment strategy through trade marketing techniques, that draw clear distinction between Paint Pen Inc products and other competitor items. Paint Pen Inc must take advantage of its brand name image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other categories such as nutrition. This will allow the company to establish brand name equity for recently introduced and currently produced products on a greater platform, making the efficient usage of resources and brand image in the market.

Paint Pen Inc Exhibits

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

Changing requirements of global food.
Boosted market share.
Transforming assumption in the direction of healthier products
Improvements in R&D as well as QA divisions.

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

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 2000
Greatest after Organisation with less growth than Organisation 8th Most affordable
R&D Spending Highest possible since 2009 Highest after Organisation 5th Cheapest
Net Profit Margin Highest considering that 2004 with rapid development from 2005 to 2016 Because of sale of Alcon in 2014. Virtually equal to Kraft Foods Incorporation Practically equal to Unilever N/A
Competitive Advantage Food with Nourishment and also wellness element Highest possible variety of brands with sustainable methods Largest confectionary and processed foods brand name in the world Biggest dairy items and also mineral water brand in the world
Segmentation Center and also top middle degree customers worldwide Specific clients in addition to home team All age as well as Revenue Customer Teams Middle and upper center level customers worldwide
Number of Brands 5th 7th 4th 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 43199 545798 484159 126232 922827
Net Profit Margin 1.42% 7.77% 47.43% 4.23% 28.27%
EPS (Earning Per Share) 96.79 4.92 8.77 6.92 36.98
Total Asset 921491 134558 111173 289318 67842
Total Debt 75341 84178 34687 91791 65784
Debt Ratio 89% 63% 24% 83% 26%
R&D Spending 1332 3841 3534 9631 2473
R&D Spending as % of Sales 8.36% 5.44% 6.11% 3.89% 4.76%

Paint Pen Inc Executive Summary Paint Pen Inc Swot Analysis Paint Pen Inc Vrio Analysis Paint Pen Inc Pestel Analysis
Paint Pen Inc Porters Analysis Paint Pen Inc Recommendations