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Areva Case Study Solution

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Business is presently one of the most significant food chains worldwide. It was established by Henri Areva in 1866, a German Pharmacist who initially released "FarineLactee"; a mix of flour and milk to feed infants and decrease death rate.
Business is now a multinational company. Unlike other multinational companies, it has senior executives from different nations and attempts to make choices considering the entire world. Areva presently has more than 500 factories worldwide and a network spread across 86 nations.

Purpose

The function of Areva Corporation is to boost 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 also wishes to motivate individuals to live a healthy life. 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

Areva's vision is to offer its customers with food that is healthy, high in quality and safe to eat. It wishes to be innovative and simultaneously comprehend the requirements and requirements of its customers. Its vision is to grow quickly and offer items that would satisfy the needs of each age group. Areva pictures to develop a well-trained workforce which would help the company to grow
.

Mission

Areva's objective is that as currently, it is the leading business in the food industry, it thinks in 'Excellent Food, Great Life". Its objective is to supply its consumers with a variety of options that are healthy and best in taste. It is focused on supplying the very best food to its consumers throughout the day and night.

Products.

Business has a wide range of products that it offers to its clients. Its items consist of food for infants, cereals, dairy items, treats, chocolates, food for family pet and mineral water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 employees. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the company has actually put down its objectives and goals. These objectives and goals are noted below.
• One goal of the business is to reach absolutely no garbage dump status. It is working toward no waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the by-products. (Business, aboutus, 2017).
• Another objective of Areva is to waste minimum food during production. Most often, the food produced is squandered even prior to it reaches the consumers.
• Another thing that Business is dealing with is to enhance its product packaging in such a method that it would help it to lower the above-mentioned problems and would likewise guarantee the delivery of high quality of its products to its consumers.
• Meet global standards of the environment.
• Develop a relationship based on trust with its customers, business partners, workers, 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. However, the target of the company is not accomplished as the sales were expected to grow greater at the rate of 10% each year and the operating margins to increase by 20%, given up Exhibit H. There is a need to focus more on the sales then the development technology. Otherwise, it may result in the decreased income rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based upon the principle of Nutritious, Health and Wellness (NHW). This method handles the concept to bringing change in the customer choices about food and making the food things healthier worrying about the health concerns.
The vision of this strategy is based upon the secret method i.e. 60/40+ which merely means that the items will have a rating of 60% on the basis of taste and 40% is based on its dietary worth. The products will be made with extra dietary value in contrast to all other items in market gaining it a plus on its dietary content.
This strategy was embraced to bring more delicious plus nutritious foods and drinks in market than ever. In competition with other companies, with an intention of maintaining its trust over customers as Business Business has gained more relied on by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing real amount of costs reveals that the sales are increasing at a greater rate than its R&D spending, and permit the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This indication 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 advancement rather than payment of financial obligations. This increasing financial obligation ratio pose a danger of default of Business to its financiers and could lead a decreasing share rates. In terms of increasing financial obligation ratio, the firm needs to not spend much on R&D and must pay its current financial obligations to reduce the threat for investors.
The increasing threat of investors with increasing financial obligation ratio and decreasing share rates can be observed by huge decline of EPS of Areva stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow perception building of consumers. This slow development likewise prevent business to further 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 estimations and Charts given up the Exhibitions D and E.

TWOS Analysis


TWOS analysis can be utilized to derive various techniques based on the SWOT Analysis offered above. A short summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business should introduce more ingenious items by large quantity of R&D Spending and mergers and acquisitions. It could increase the marketplace share of Business and increase the revenue margins for the business. It might also provide Business a long term competitive benefit over its competitors.
The worldwide expansion of Business need to be concentrated on market recording of developing countries by growth, attracting more clients through client's loyalty. As developing nations are more populated than developed nations, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisAreva ought to do careful acquisition and merger of companies, as it could impact the consumer's and society's understandings about Business. It must acquire and combine with those companies which have a market track record of healthy and nutritious business. It would improve the perceptions of consumers about Business.
Business should not just invest its R&D on innovation, rather than it must likewise concentrate on the R&D spending over examination of expense of different nutritious products. This would increase cost effectiveness of its products, which will result in increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing however likewise to developed nations. It must expand its circle to various countries like Unilever which runs 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 make it possible for the business to utilize its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 aspects; age, gender, income and occupation. For instance, Business produces numerous products associated with children i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary items. Areva items are quite inexpensive by practically all levels, however its major targeted customers, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its existence in practically 86 nations. Its geographical segmentation is based upon two main factors i.e. average earnings level of the consumer as well as the environment of the region. Singapore Business Company's division is done on the basis of the weather condition of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and lifestyle of the customer. Business 3 in 1 Coffee target those customers whose life style is rather hectic and don't have much time.

Behavioral Segmentation

Areva behavioral division is based upon the attitude knowledge and awareness of the customer. Its extremely healthy items target those customers who have a health conscious attitude towards their usages.

Areva Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand name, there are two choices:
Option: 1
The Company should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall assets of the business, 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. Quantity invest on the R&D could not be revived, and it will be considered completely sunk cost, if it do not give prospective results.
3. Investing in R&D provide slow development in sales, as it takes long time to introduce a product. Acquisitions offer fast results, as it provide the business currently developed product, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the company to face misconception of consumers about Business core values of healthy and nutritious items.
2 Big spending on acquisitions than R&D would send out a signal of business's ineffectiveness of developing ingenious products, and would results in consumer's discontentment also.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are already present in the market, making business unable to present brand-new innovative items.
Alternative: 2.
The Company ought to invest more on its R&D rather than acquisitions.
Pros:
1. It would make it possible for the business to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted clients by presenting those items which can be offered to a completely new market sector.
4. Ingenious items will offer long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the company.
2. In case of failure, the entire 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 an unfavorable signal to the investors, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to present new ingenious items with less danger of converting the spending on R&D into sunk expense.
2. It would provide a favorable signal to the financiers, as the overall properties of the business would increase with its significant R&D costs.
3. It would not impact the earnings margins of the company at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the company's general wealth in addition to in regards to ingenious products.
Cons:
1. Threat of conversion of R&D spending into sunk cost, higher than alternative 1 lesser than alternative 2.
2. Risk of misunderstanding about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less variety of ingenious items than alternative 2 and high variety of innovative products than alternative 1.

Areva Conclusion

RecommendationsIt has actually institutionalised its strategies and culture to align itself with the market changes and consumer behavior, which has eventually permitted it to sustain its market share. Business has established substantial market share and brand identity in the city markets, it is recommended that the business ought to focus on the rural areas in terms of establishing brand name commitment, awareness, and equity, such can be done by producing a specific brand name allocation method through trade marketing strategies, that draw clear distinction between Areva products and other rival products.

Areva Exhibits

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

Transforming criteria of international food.
Boosted market share.
Changing perception towards much healthier items
Improvements in R&D as well as QA departments.

Intro of E-marketing.
No such effect as it is good.
Problems over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible given that 6000
Highest after Organisation with much less development than Organisation 5th Lowest
R&D Spending Highest considering that 2007 Greatest after Business 8th Cheapest
Net Profit Margin Highest considering that 2008 with fast development from 2004 to 2017 As a result of sale of Alcon in 2016. Nearly equal to Kraft Foods Consolidation Practically equal to Unilever N/A
Competitive Advantage Food with Nourishment and health and wellness variable Greatest number of brands with sustainable techniques Biggest confectionary and also processed foods brand name worldwide Largest dairy products and also mineral water brand in the world
Segmentation Middle and top center degree customers worldwide Individual clients along with house group Any age and Income Client Teams Middle and top middle level consumers worldwide
Number of Brands 5th 8th 6th 4th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 96365 151537 299265 258953 635382
Net Profit Margin 3.68% 8.52% 88.78% 1.28% 27.25%
EPS (Earning Per Share) 66.96 3.51 7.65 4.81 79.95
Total Asset 952426 847782 953799 768662 95398
Total Debt 59663 95324 55914 29568 25594
Debt Ratio 71% 85% 71% 95% 11%
R&D Spending 6179 3116 9425 5322 4449
R&D Spending as % of Sales 1.77% 3.23% 7.93% 6.98% 9.64%

Areva Executive Summary Areva Swot Analysis Areva Vrio Analysis Areva Pestel Analysis
Areva Porters Analysis Areva Recommendations