Menu

Palm Computing Inc 1995 Financing Challenges Case Study Help

Case Study Solution And Analysis


Home >> Darden >> Palm Computing Inc 1995 Financing Challenges >>

Palm Computing Inc 1995 Financing Challenges Case Study Solution

Palm Computing Inc 1995 Financing Challenges is currently one of the most significant food chains worldwide. It was established by Darden in 1866, a German Pharmacist who initially released "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate. At the exact same time, the Page brothers from Switzerland also found The Anglo-Swiss Condensed Milk Business. The 2 became competitors initially but later on merged in 1905, leading to the birth of Palm Computing Inc 1995 Financing Challenges.
Business is now a transnational company. Unlike other multinational business, it has senior executives from different nations and tries to make choices thinking about the entire world. Palm Computing Inc 1995 Financing Challenges 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 people by playing its part and supplying healthy food. While making sure that the business is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

Palm Computing Inc 1995 Financing Challenges's vision is to supply its consumers with food that is healthy, high in quality and safe to eat. It wants to be ingenious and at the same time comprehend the needs and requirements of its consumers. Its vision is to grow quick and offer items that would satisfy the needs of each age. Palm Computing Inc 1995 Financing Challenges visualizes to develop a trained workforce which would help the company to grow
.

Mission

Palm Computing Inc 1995 Financing Challenges's objective is that as currently, it is the leading company in the food market, it believes in 'Great Food, Excellent Life". Its objective is to provide its consumers with a range of options that are healthy and best in taste also. It is focused on offering the best food to its customers throughout the day and night.

Products.

Palm Computing Inc 1995 Financing Challenges has a broad variety of products that it uses to its clients. In 2011, Business was listed as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the company has actually put down its goals and goals. These goals and objectives are listed below.
• One objective of the company is to reach absolutely no land fill status. (Business, aboutus, 2017).
• Another objective of Palm Computing Inc 1995 Financing Challenges is to squander minimum food during production. Most often, the food produced is wasted even before it reaches the customers.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to lower those problems and would also guarantee the delivery of high quality of its products to its clients.
• Meet worldwide standards of the environment.
• Develop a relationship based on trust with its consumers, organisation partners, staff members, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its earnings on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW strategy. The target of the business is not accomplished as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, provided in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based upon the idea of Nutritious, Health and Wellness (NHW). This method deals with the concept to bringing modification in the customer preferences about food and making the food things healthier worrying about the health issues.
The vision of this method is based on the key method 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 upon its dietary worth. The items will be made with extra nutritional worth in contrast to all other items in market getting it a plus on its nutritional content.
This technique was adopted to bring more tasty plus nutritious foods and drinks in market than ever. In competitors with other business, with an intention of maintaining its trust over clients as Business Business has gotten more relied on by customers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing real quantity of costs reveals that the sales are increasing at a greater rate than its R&D costs, and enable the company to more spend on R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This sign likewise reveals a thumbs-up to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D advancement instead of payment of debts. This increasing financial obligation ratio posture a danger of default of Business to its financiers and could lead a declining share rates. For that reason, in regards to increasing financial obligation ratio, the firm needs to not spend much on R&D and must pay its existing debts to decrease the danger for investors.
The increasing risk of financiers with increasing financial obligation ratio and declining share costs can be observed by substantial decrease of EPS of Palm Computing Inc 1995 Financing Challenges stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This sluggish growth likewise impede company to more spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Charts given in the Displays D and E.

TWOS Analysis


2 analysis can be used to derive various techniques based on the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business needs to present more innovative products by large amount of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the profit margins for the business. It could also supply Business a long term competitive advantage over its rivals.
The global expansion of Business must be focused on market capturing of developing nations by expansion, drawing in more consumers through consumer's commitment. As establishing countries are more populated than developed countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisPalm Computing Inc 1995 Financing Challenges must do mindful acquisition and merger of organizations, as it might affect the client's and society's understandings about Business. It needs to obtain and merge with those business which have a market credibility of healthy and healthy business. It would enhance the perceptions of consumers about Business.
Business needs to not only spend its R&D on development, instead of it ought to also concentrate on the R&D costs over evaluation of expense of various nutritious products. This would increase expense performance of its products, which will lead to increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business should transfer to not just establishing but also to developed countries. It should widens its geographical growth. This wide geographical growth towards establishing and developed countries would lower the threat of potential losses in times of instability in various nations. It ought to expand its circle to different nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Palm Computing Inc 1995 Financing Challenges should wisely control its acquisitions to avoid the danger of misunderstanding from the consumers about Business. It should get and combine with those nations having a goodwill of being a healthy business in the market. This would not just improve the understanding of consumers about Business however would also increase the sales, profit margins and market share of Business. It would likewise enable the company to utilize its prospective resources effectively on its other operations instead of acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based on 4 factors; age, gender, income and profession. Business produces numerous items related to children i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Palm Computing Inc 1995 Financing Challenges products are rather budget friendly by practically all levels, but its major targeted customers, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is made up of its existence in nearly 86 countries. Its geographical division is based upon two primary elements i.e. average income level of the consumer in addition to the climate of the area. 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 client. For example, Business 3 in 1 Coffee target those customers whose life style is rather busy and don't have much time.

Behavioral Segmentation

Palm Computing Inc 1995 Financing Challenges behavioral division is based upon the mindset knowledge and awareness of the customer. For instance its highly nutritious items target those customers who have a health conscious attitude towards their intakes.

Palm Computing Inc 1995 Financing Challenges Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are 2 options:
Alternative: 1
The Company ought to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the business. Spending on R&D would be sunk cost.
2. The company can resell the obtained systems in the market, if it fails to implement its technique. Amount spend on the R&D could not be restored, and it will be considered entirely sunk expense, if it do not provide prospective results.
3. Investing in R&D offer slow development in sales, as it takes long time to present a product. Acquisitions offer fast results, as it provide the business already established item, which can be marketed quickly 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 mistaken belief of customers about Business core worths of healthy and nutritious products.
2 Big costs on acquisitions than R&D would send a signal of company's inadequacy of establishing ingenious products, and would results in consumer's dissatisfaction also.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are currently present in the market, making business unable to present new innovative items.
Option: 2.
The Company needs to invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the business to produce more innovative items.
2. It would provide the company a strong competitive position in the market.
3. It would allow the business to increase its targeted consumers by introducing those products which can be used to an entirely new market segment.
4. Ingenious items will supply long term advantages and high market share in long run.
Cons:
1. It would reduce the earnings margins of the business.
2. In case of failure, the entire spending 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 business, which might offer an unfavorable signal to the investors, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the company to present new ingenious products with less threat of converting the spending on R&D into sunk cost.
2. It would offer a favorable signal to the investors, as the general assets of the company would increase with its considerable R&D spending.
3. It would not impact the profit 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 terms of the company's overall wealth as well as in terms of ingenious products.
Cons:
1. Danger of conversion of R&D spending into sunk cost, greater than alternative 1 lower than alternative 2.
2. Danger of mistaken belief about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less variety of innovative products than alternative 2 and high number of innovative items than alternative 1.

Palm Computing Inc 1995 Financing Challenges Conclusion

RecommendationsBusiness has stayed the top market gamer for more than a decade. It has institutionalized its techniques and culture to align itself with the marketplace modifications and consumer behavior, which has eventually enabled it to sustain its market share. Business has developed substantial market share and brand name identity in the urban markets, it is advised that the company needs to focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by developing a particular brand allocation technique through trade marketing strategies, that draw clear distinction in between Palm Computing Inc 1995 Financing Challenges items and other competitor items. Additionally, Business should take advantage of its brand name picture 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 name equity for newly presented and currently produced products on a greater platform, making the reliable usage of resources and brand image in the market.

Palm Computing Inc 1995 Financing Challenges Exhibits

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

Altering requirements of international food.
Enhanced market share.
Altering assumption towards much healthier products
Improvements in R&D and QA departments.

Intro of E-marketing.
No such effect as it is beneficial.
Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible because 4000
Highest after Service with less development than Organisation 6th Lowest
R&D Spending Greatest given that 2005 Highest after Business 2nd Cheapest
Net Profit Margin Greatest because 2007 with fast growth from 2004 to 2019 Because of sale of Alcon in 2019. Nearly equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as wellness aspect Highest possible number of brand names with lasting practices Largest confectionary and refined foods brand in the world Largest dairy items and bottled water brand on the planet
Segmentation Middle and also upper center level customers worldwide Private consumers along with household team Every age and Revenue Consumer Groups Middle and also top center degree consumers worldwide
Number of Brands 2nd 7th 4th 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 69388 464253 557766 292733 377498
Net Profit Margin 9.62% 9.81% 36.33% 8.73% 48.92%
EPS (Earning Per Share) 77.52 5.87 4.39 4.98 68.52
Total Asset 687146 833976 283868 875182 27415
Total Debt 56481 38682 31579 19544 73481
Debt Ratio 32% 21% 55% 31% 17%
R&D Spending 5256 7816 4182 9464 7458
R&D Spending as % of Sales 9.71% 6.28% 2.15% 2.39% 8.61%

Palm Computing Inc 1995 Financing Challenges Executive Summary Palm Computing Inc 1995 Financing Challenges Swot Analysis Palm Computing Inc 1995 Financing Challenges Vrio Analysis Palm Computing Inc 1995 Financing Challenges Pestel Analysis
Palm Computing Inc 1995 Financing Challenges Porters Analysis Palm Computing Inc 1995 Financing Challenges Recommendations