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Cleveland Cliffs Inc Case Study Solution

Business is presently one of the biggest food chains worldwide. It was founded by Henri Cleveland Cliffs Inc in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed infants and decrease mortality rate.
Business is now a multinational company. Unlike other international companies, it has senior executives from different nations and tries to make decisions considering the entire world. Cleveland Cliffs Inc currently has more than 500 factories worldwide and a network spread across 86 countries.

Purpose

The function of Business Corporation is to boost the quality of life of people by playing its part and offering healthy food. While making sure that the business is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Cleveland Cliffs Inc's vision is to offer its consumers with food that is healthy, high in quality and safe to consume. It wants to be innovative and simultaneously comprehend the requirements and requirements of its clients. Its vision is to grow quickly and supply items that would please the requirements of each age group. Cleveland Cliffs Inc pictures to develop a trained labor force which would help the company to grow
.

Mission

Cleveland Cliffs Inc's objective is that as currently, it is the leading business in the food market, it believes in 'Excellent Food, Great Life". Its mission is to supply its customers with a variety of options that are healthy and best in taste. It is concentrated on offering the very best food to its customers throughout the day and night.

Products.

Cleveland Cliffs Inc has a wide range of items that it provides to its consumers. In 2011, Business was noted as the most rewarding company.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has put down its objectives and objectives. These goals and goals are listed below.
• One objective of the company is to reach zero landfill status. (Business, aboutus, 2017).
• Another objective of Cleveland Cliffs Inc is to waste minimum food during production. Most often, the food produced is squandered 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 minimize the above-mentioned complications and would also guarantee the shipment of high quality of its items to its consumers.
• Meet international requirements of the environment.
• Construct a relationship based upon trust with its customers, company partners, staff members, and federal government.

Critical Issues

Recently, Business Business is focusing more towards the technique of NHW and investing more of its profits on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW technique. Nevertheless, the target of the business 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 innovation technology. Otherwise, it may lead to the declined earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based on the principle of Nutritious, Health and Health (NHW). This method deals with the concept to bringing change in the client choices about food and making the food stuff healthier worrying about the health problems.
The vision of this technique is based upon the key technique i.e. 60/40+ which simply suggests that the items will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The items will be manufactured with additional nutritional value in contrast to all other items in market acquiring it a plus on its nutritional content.
This strategy was adopted to bring more yummy plus healthy foods and drinks in market than ever. In competition with other companies, with an intention of retaining its trust over customers as Business Company has gotten more trusted by customers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing actual amount of spending reveals that the sales are increasing at a higher rate than its R&D spending, and permit the business to more spend on R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign also shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of debts. This increasing financial obligation ratio posture a risk of default of Business to its investors and could lead a declining share prices. In terms of increasing financial obligation ratio, the firm must not spend much on R&D and ought to pay its existing debts to decrease the threat for financiers.
The increasing risk of financiers with increasing debt ratio and declining share rates can be observed by big decrease of EPS of Cleveland Cliffs Inc stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish growth also prevent business to additional spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of calculations and Charts given up the Displays D and E.

TWOS Analysis


2 analysis can be utilized to derive different strategies based upon the SWOT Analysis provided above. A brief summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business needs to present more innovative products by large quantity of R&D Spending and mergers and acquisitions. It might increase the market share of Business and increase the profit margins for the business. It might likewise supply Business a long term competitive benefit over its competitors.
The global expansion of Business must be focused on market recording of establishing nations by expansion, attracting more consumers through customer's loyalty. As developing countries are more populated than developed countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisCleveland Cliffs Inc must do cautious acquisition and merger of companies, as it could affect the client's and society's understandings about Business. It should get and merge with those business which have a market credibility of healthy and healthy companies. It would improve the perceptions of customers about Business.
Business must not only invest its R&D on innovation, rather than it must likewise concentrate on the R&D costs over assessment of expense of different healthy products. This would increase expense efficiency of its products, which will result in increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business should move to not only developing but likewise to industrialized nations. It should expands its geographical expansion. This broad geographical growth towards establishing and developed countries would lower the threat of prospective losses in times of instability in different nations. It should widen its circle to different nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must obtain and combine with those nations having a goodwill of being a healthy company in the market. It would also allow the business to utilize its prospective resources effectively on its other operations rather than acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based on four factors; age, gender, income and occupation. Business produces a number of items related to children i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary items. Cleveland Cliffs Inc products are quite budget-friendly by almost all levels, but its major targeted consumers, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in almost 86 nations. Its geographical division is based upon 2 main elements i.e. average income level of the customer along with the environment of the area. For example, Singapore Business Company'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 life style of the client. For instance, Business 3 in 1 Coffee target those consumers whose life style is quite busy and do not have much time.

Behavioral Segmentation

Cleveland Cliffs Inc behavioral division is based upon the attitude knowledge and awareness of the customer. Its extremely nutritious items target those consumers who have a health conscious mindset towards their intakes.

Cleveland Cliffs Inc Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand name, there are two options:
Alternative: 1
The Business must spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall properties of the business, increasing the wealth of the business. However, spending on R&D would be sunk expense.
2. The business can resell the acquired units in the market, if it fails to execute its strategy. Quantity invest on the R&D could not be revived, and it will be thought about entirely sunk cost, if it do not provide possible results.
3. Investing in R&D offer sluggish growth in sales, as it takes very long time to introduce an item. Nevertheless, acquisitions offer fast results, as it provide the company currently developed item, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to deal with mistaken belief of consumers about Business core worths of healthy and healthy items.
2 Big spending on acquisitions than R&D would send out a signal of company's inadequacy of establishing ingenious items, and would results in customer's frustration as well.
3. Large acquisitions than R&D would extend the line of product of the company by the products which are currently present in the market, making company unable to introduce new innovative items.
Option: 2.
The Company should invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the company to produce more ingenious items.
2. It would offer the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted consumers by introducing those items which can be used to an entirely new market segment.
4. Innovative items will offer long term advantages and high market share in long run.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the whole spending on R&D would be thought about as sunk expense, and would impact the business at large. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might provide a negative signal to the investors, and could result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would allow the company to present new ingenious products with less risk of converting the spending on R&D into sunk expense.
2. It would provide a positive signal to the investors, as the overall properties of the business would increase with its considerable R&D spending.
3. It would not impact the earnings margins of the business at a large rate as compare to alternative 2.
4. It would supply the business a strong long term market position in regards to the company's overall wealth in addition to in regards to innovative products.
Cons:
1. Threat of conversion of R&D spending into sunk cost, higher than option 1 lesser than alternative 2.
2. Risk of misconception about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Intro of less number of innovative items than alternative 2 and high number of ingenious items than alternative 1.

Cleveland Cliffs Inc Conclusion

RecommendationsIt has actually institutionalised its techniques and culture to align itself with the market changes and consumer behavior, which has eventually allowed it to sustain its market share. Business has established significant market share and brand name identity in the metropolitan markets, it is recommended that the business should focus on the rural locations in terms of developing brand commitment, awareness, and equity, such can be done by producing a specific brand allowance method through trade marketing techniques, that draw clear distinction in between Cleveland Cliffs Inc products and other competitor items.

Cleveland Cliffs Inc Exhibits

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

Altering requirements of worldwide food.
Enhanced market share.
Changing assumption towards much healthier items
Improvements in R&D and also QA departments.

Introduction of E-marketing.
No such impact as it is good.
Worries over recycling.

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible given that 4000
Highest after Company with much less growth than Service 9th Least expensive
R&D Spending Highest possible since 2005 Highest after Service 5th Most affordable
Net Profit Margin Greatest since 2006 with rapid growth from 2001 to 2013 Due to sale of Alcon in 2012. Virtually equal to Kraft Foods Unification Nearly equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as health and wellness aspect Greatest variety of brands with sustainable practices Biggest confectionary and also processed foods brand in the world Largest dairy products as well as mineral water brand name worldwide
Segmentation Center as well as upper middle level consumers worldwide Individual consumers in addition to house group Any age as well as Income Consumer Groups Middle and upper center degree consumers worldwide
Number of Brands 4th 2nd 7th 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 74331 992685 697989 559596 995197
Net Profit Margin 6.63% 3.91% 88.38% 3.34% 16.32%
EPS (Earning Per Share) 93.96 7.97 5.64 8.81 55.83
Total Asset 691421 688636 858464 396417 56462
Total Debt 66469 64994 27567 61845 46528
Debt Ratio 13% 74% 42% 29% 26%
R&D Spending 3918 6764 3589 5254 7945
R&D Spending as % of Sales 8.84% 8.13% 1.32% 8.28% 8.77%

Cleveland Cliffs Inc Executive Summary Cleveland Cliffs Inc Swot Analysis Cleveland Cliffs Inc Vrio Analysis Cleveland Cliffs Inc Pestel Analysis
Cleveland Cliffs Inc Porters Analysis Cleveland Cliffs Inc Recommendations