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Barrick Gold Implementing A Transition To Ifrs Case Study Solution

Barrick Gold Implementing A Transition To Ifrs is presently among the biggest food chains worldwide. It was established by Harvard in 1866, a German Pharmacist who first released "FarineLactee"; a combination of flour and milk to feed babies and reduce death rate. At the exact same time, the Page brothers from Switzerland also discovered The Anglo-Swiss Condensed Milk Company. The two ended up being competitors in the beginning however later on merged in 1905, leading to the birth of Barrick Gold Implementing A Transition To Ifrs.
Business is now a transnational business. Unlike other multinational business, it has senior executives from various nations and attempts to make decisions considering the whole world. Barrick Gold Implementing A Transition To Ifrs currently has more than 500 factories around the world and a network spread across 86 countries.


The purpose of Barrick Gold Implementing A Transition To Ifrs Corporation is to improve the lifestyle of individuals by playing its part and offering healthy food. It wants to help the world in shaping a healthy and much better future for it. It also wishes to motivate people to live a healthy life. While making certain that the business is succeeding in the long run, that's how it plays its part for a better and healthy future


Barrick Gold Implementing A Transition To Ifrs's vision is to provide its customers with food that is healthy, high in quality and safe to consume. It wishes to be innovative and simultaneously comprehend the needs and requirements of its clients. Its vision is to grow quickly and supply products that would please the needs of each age group. Barrick Gold Implementing A Transition To Ifrs imagines to develop a well-trained labor force which would help the business to grow


Barrick Gold Implementing A Transition To Ifrs's objective is that as presently, it is the leading business in the food industry, it thinks in 'Great Food, Great Life". Its objective is to provide its consumers with a variety of choices that are healthy and finest in taste. It is focused on offering the best food to its consumers throughout the day and night.


Barrick Gold Implementing A Transition To Ifrs has a large variety of items that it uses to its customers. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the company has actually laid down its goals and objectives. These goals and objectives are noted below.
• One goal of the company is to reach no garbage dump status. It is pursuing zero waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of Barrick Gold Implementing A Transition To Ifrs is to waste minimum food during production. Frequently, the food produced is wasted even prior to it reaches the consumers.
• 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 ensure the delivery of high quality of its products to its customers.
• Meet worldwide requirements of the environment.
• Build a relationship based upon trust with its customers, service partners, workers, and government.

Critical Issues

Recently, Business Company is focusing more towards the technique of NHW and investing more of its profits on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW technique. Nevertheless, the target of the business 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%, given up Exhibit H. There is a need to focus more on the sales then the development technology. Otherwise, it may result in the declined revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business technique is based upon the concept of Nutritious, Health and Wellness (NHW). This strategy handles the idea to bringing change in the consumer choices about food and making the food things much healthier worrying about the health problems.
The vision of this method is based upon the key approach i.e. 60/40+ which just means that the items will have a score of 60% on the basis of taste and 40% is based on its dietary value. The products will be made with extra nutritional value in contrast to all other items in market acquiring it a plus on its dietary content.
This method was embraced to bring more yummy plus healthy foods and beverages in market than ever. In competitors with other companies, with an objective of retaining its trust over clients as Business Business has gotten more trusted by costumers.

Quantitative Analysis.

R&D Costs as a portion of sales are decreasing with increasing real quantity of spending shows that the sales are increasing at a higher rate than its R&D spending, and permit the business to more invest in R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is declining. This sign likewise shows a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing financial obligation ratio posture a hazard of default of Business to its investors and could lead a decreasing share rates. Therefore, in regards to increasing financial obligation ratio, the company needs to not invest much on R&D and needs to pay its existing debts to decrease the danger for financiers.
The increasing risk of investors with increasing financial obligation ratio and decreasing share prices can be observed by big decline of EPS of Barrick Gold Implementing A Transition To Ifrs stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow growth likewise hinder 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 computations and Graphs given up the Exhibitions D and E.

TWOS Analysis

TWOS analysis can be used to derive numerous strategies based on the SWOT Analysis offered above. A short summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business ought to introduce more innovative items by big quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the revenue margins for the business. It could likewise offer Business a long term competitive advantage over its rivals.
The worldwide expansion of Business must be concentrated on market recording of establishing countries by expansion, attracting more customers through customer's loyalty. As establishing countries are more populous than industrialized countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisBarrick Gold Implementing A Transition To Ifrs ought to do careful acquisition and merger of organizations, as it might impact the client's and society's perceptions about Business. It must obtain and combine with those companies which have a market reputation of healthy and nutritious companies. It would enhance the understandings of consumers about Business.
Business needs to not just invest its R&D on innovation, rather than it should likewise focus on the R&D costs over assessment of cost of various nutritious items. This would increase cost performance of its items, which will result in increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing but likewise to industrialized nations. It needs to expand its circle to numerous nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Barrick Gold Implementing A Transition To Ifrs ought to carefully manage its acquisitions to prevent the danger of mistaken belief from the customers about Business. It ought to acquire and merge with those nations having a goodwill of being a healthy company in the market. This would not just improve the understanding of customers about Business but would likewise increase the sales, earnings margins and market share of Business. It would also enable the business to use its possible resources effectively 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 on four elements; age, gender, income and occupation. Business produces several items related to babies i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary items. Barrick Gold Implementing A Transition To Ifrs items are quite cost effective by practically all levels, but its significant targeted consumers, in terms of income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its presence in practically 86 nations. Its geographical segmentation is based upon two main aspects i.e. typical earnings level of the customer along with the climate of the area. For example, Singapore Business Company's division is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and life style of the customer. Business 3 in 1 Coffee target those clients whose life design is rather hectic and don't have much time.

Behavioral Segmentation

Barrick Gold Implementing A Transition To Ifrs behavioral division is based upon the mindset knowledge and awareness of the client. Its highly nutritious items target those consumers who have a health conscious attitude towards their usages.

Barrick Gold Implementing A Transition To Ifrs Alternatives

In order to sustain the brand name in the market and keep the client undamaged with the brand, there are two alternatives:
Option: 1
The Business needs to invest more on acquisitions than on the R&D.
1. Acquisitions would increase total possessions of the company, increasing the wealth of the business. Nevertheless, costs on R&D would be sunk cost.
2. The business can resell the gotten units in the market, if it fails to implement its strategy. Nevertheless, amount invest in the R&D could not be restored, and it will be thought about completely sunk expense, if it do not provide prospective results.
3. Spending on R&D provide sluggish development in sales, as it takes very long time to introduce an item. Acquisitions provide quick outcomes, as it supply the company already developed product, which can be marketed quickly after the acquisition.
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the company to face misunderstanding of customers about Business core worths of healthy and healthy products.
2 Big spending on acquisitions than R&D would send a signal of business's inefficiency of establishing ingenious items, and would lead to customer's frustration as well.
3. Big 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 Business must invest more on its R&D instead of acquisitions.
1. It would allow the company to produce more innovative items.
2. It would provide the company a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted clients by introducing those items which can be provided to a totally new market segment.
4. Innovative products will supply long term benefits and high market share in long run.
1. It would decrease the profit margins of the company.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would impact the company at large. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could offer an unfavorable signal to the financiers, and could 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 allow the company to present new ingenious products with less threat of transforming the spending on R&D into sunk expense.
2. It would offer a positive signal to the financiers, as the overall properties of the business would increase with its substantial 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 supply the company a strong long term market position in regards to the company's general wealth as well as in regards to ingenious products.
1. Risk of conversion of R&D spending into sunk cost, greater than alternative 1 lower than alternative 2.
2. Risk of misunderstanding about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Introduction of less variety of ingenious items than alternative 2 and high variety of innovative items than alternative 1.

Barrick Gold Implementing A Transition To Ifrs Conclusion

RecommendationsIt has actually institutionalized its strategies and culture to align itself with the market modifications and customer habits, which has actually eventually enabled it to sustain its market share. Business has developed significant market share and brand identity in the metropolitan markets, it is recommended that the business must focus on the rural locations in terms of developing brand loyalty, awareness, and equity, such can be done by producing a particular brand name allowance strategy through trade marketing strategies, that draw clear distinction in between Barrick Gold Implementing A Transition To Ifrs items and other rival products.

Barrick Gold Implementing A Transition To Ifrs Exhibits

PESTEL Analysis
Governmental support

Changing criteria of worldwide food.
Enhanced market share. Changing understanding towards much healthier items Improvements in R&D and QA departments.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest since 8000 Highest possible after Company with much less development than Service 9th Cheapest
R&D Spending Highest possible given that 2003 Highest possible after Business 6th Lowest
Net Profit Margin Greatest since 2009 with rapid development from 2005 to 2019 As a result of sale of Alcon in 2012. Virtually equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health and wellness aspect Greatest number of brand names with lasting practices Largest confectionary as well as processed foods brand worldwide Largest milk items as well as bottled water brand on the planet
Segmentation Center and also upper center level consumers worldwide Specific consumers along with house team Every age and Earnings Client Teams Center and top center level consumers worldwide
Number of Brands 9th 4th 2nd 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 51586 575722 463619 574555 429829
Net Profit Margin 9.43% 3.26% 38.54% 5.67% 91.32%
EPS (Earning Per Share) 69.78 5.56 5.46 8.88 65.75
Total Asset 615161 832654 126432 698341 98251
Total Debt 94249 76738 63927 35743 71156
Debt Ratio 16% 76% 41% 17% 97%
R&D Spending 6615 4488 4318 5569 2753
R&D Spending as % of Sales 5.22% 1.62% 9.23% 1.54% 7.46%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations