Congoleum Corp Abridged Case Study Solution

Congoleum Corp Abridged is presently one of the biggest food chains worldwide. It was established by Harvard in 1866, a German Pharmacist who first launched "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate. At the same time, the Page bros from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The 2 became rivals initially however in the future merged in 1905, leading to the birth of Congoleum Corp Abridged.
Business is now a transnational business. Unlike other international companies, it has senior executives from various countries and attempts to make choices considering the whole world. Congoleum Corp Abridged presently 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 providing 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

Congoleum Corp Abridged's vision is to provide its clients with food that is healthy, high in quality and safe to eat. Business imagines to develop a well-trained labor force which would help the business to grow
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Mission

Congoleum Corp Abridged's mission is that as presently, it is the leading business in the food industry, it thinks in 'Good Food, Good Life". Its objective is to offer its consumers with a variety of options that are healthy and finest in taste as well. It is concentrated on offering 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 customers. Its items include food for babies, cereals, dairy items, snacks, chocolates, food for family pet and bottled water. It has around 4 hundred and fifty (450) factories around the globe and around 328,000 workers. In 2011, Business was noted as the most rewarding company.

Goals and Objectives

• Remembering the vision and mission of the corporation, the company has set its goals and objectives. These goals and goals are noted below.
• One goal of the company is to reach no garbage dump status. (Business, aboutus, 2017).
• Another goal of Congoleum Corp Abridged is to lose minimum food throughout production. Usually, the food produced is lost even before it reaches the clients.
• Another thing that Business is working on is to improve its packaging in such a method that it would help it to decrease the above-mentioned problems and would also ensure the shipment of high quality of its products to its customers.
• Meet global requirements of the environment.
• Construct 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 earnings on the R&D innovation. The nation is investing more on acquisitions and mergers to support its NHW method. The target of the company is not achieved as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, offered in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based upon the principle of Nutritious, Health and Health (NHW). This strategy deals with the concept to bringing modification in the consumer choices about food and making the food stuff much healthier worrying about the health issues.
The vision of this strategy is based on the secret technique i.e. 60/40+ which just implies that the items will have a score of 60% on the basis of taste and 40% is based upon its nutritional worth. The products will be made with extra nutritional value in contrast to all other items in market acquiring it a plus on its dietary material.
This technique was adopted to bring more tasty plus healthy foods and drinks in market than ever. In competition with other companies, with an intent of retaining its trust over clients as Business Business has actually gotten more trusted by clients.

Quantitative Analysis.

R&D Costs as a portion of sales are decreasing with increasing actual quantity of spending shows that the sales are increasing at a higher rate than its R&D spending, and enable the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign likewise reveals a thumbs-up 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 advancement rather than payment of financial obligations. This increasing debt ratio posture a risk of default of Business to its investors and might lead a declining share rates. In terms of increasing financial obligation ratio, the company ought to not invest much on R&D and needs to pay its current financial obligations to reduce the threat for financiers.
The increasing threat of financiers with increasing financial obligation ratio and decreasing share costs can be observed by substantial decrease of EPS of Congoleum Corp Abridged stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception building of consumers. This slow growth likewise prevent business to additional 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 Graphs given up the Displays D and E.

TWOS Analysis

TWOS analysis can be used to derive various methods based on the SWOT Analysis provided above. A short summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business ought to present more ingenious items by big amount of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the revenue margins for the company. It might also supply Business a long term competitive benefit over its competitors.
The global growth of Business ought to be concentrated on market catching of developing countries by expansion, bring in more consumers through customer's commitment. As developing nations are more populated than industrialized nations, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Congoleum Corp Abridged needs to do careful acquisition and merger of companies, as it might impact the customer's and society's perceptions about Business. It ought to acquire and merge with those business which have a market reputation of healthy and nutritious companies. It would improve the perceptions of consumers about Business.
Business must not just invest its R&D on development, rather than it ought to also concentrate on the R&D spending over assessment of expense of various healthy products. This would increase expense efficiency of its items, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business must move to not just establishing but likewise to developed nations. It needs to expand its circle to different countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must obtain and merge with those nations having a goodwill of being a healthy business in the market. It would also enable the business to utilize its possible resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 elements; age, gender, earnings and profession. Business produces a number of items related to infants i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary products. Congoleum Corp Abridged items are quite budget friendly by nearly all levels, but its major targeted customers, in regards to income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its existence in nearly 86 nations. Its geographical segmentation is based upon 2 primary elements i.e. average income level of the consumer as well as the climate of the area. Singapore Business Company's segmentation is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the personality and lifestyle of the consumer. For example, Business 3 in 1 Coffee target those consumers whose life style is quite busy and don't have much time.

Behavioral Segmentation

Congoleum Corp Abridged behavioral segmentation is based upon the mindset understanding and awareness of the consumer. Its highly healthy items target those clients who have a health conscious mindset towards their intakes.

Congoleum Corp Abridged Alternatives

In order to sustain the brand in the market and keep the consumer undamaged with the brand name, there are two alternatives:
Alternative: 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. Spending on R&D would be sunk expense.
2. The business can resell the acquired systems in the market, if it fails to implement its method. However, amount spend on the R&D could not be restored, and it will be thought about entirely sunk cost, if it do not give possible results.
3. Spending on R&D provide sluggish development in sales, as it takes long period of time to present an item. However, acquisitions provide fast outcomes, as it offer the business already developed product, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the business to face mistaken belief of consumers about Business core worths of healthy and nutritious items.
2 Big costs on acquisitions than R&D would send a signal of business's inadequacy of establishing innovative items, and would results in customer's discontentment.
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 company not able to introduce new innovative products.
Alternative: 2.
The Company needs to spend more on its R&D instead of acquisitions.
Pros:
1. It would allow the business to produce more innovative products.
2. It would provide the company a strong competitive position in the market.
3. It would allow the company to increase its targeted customers by presenting those products which can be used to an entirely brand-new market section.
4. Innovative items will offer long term benefits and high market share in long term.
Cons:
1. It would decrease the revenue margins of the business.
2. In case of failure, the whole costs on R&D would be thought about as sunk expense, and would impact the company at large. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could provide an unfavorable signal to the investors, and might result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would enable the business to present brand-new ingenious items with less threat of converting the spending on R&D into sunk cost.
2. It would provide a positive signal to the financiers, as the total properties of the business would increase with its substantial R&D costs.
3. It would not impact the profit margins of the business at a big rate as compare to alternative 2.
4. It would provide the business a strong long term market position in terms of the company's general wealth as well as in regards to innovative items.
Cons:
1. Danger of conversion of R&D spending into sunk cost, greater than option 1 lower than alternative 2.
2. Threat of misconception about the acquisitions, greater than alternative 2 and lower than option 1.
3. Introduction of less number of innovative products than alternative 2 and high number of ingenious items than alternative 1.

Congoleum Corp Abridged Conclusion

It has institutionalised its strategies and culture to align itself with the market changes and client habits, which has eventually permitted it to sustain its market share. Business has established significant market share and brand name identity in the urban markets, it is recommended that the business needs to focus on the rural areas in terms of establishing brand commitment, awareness, and equity, such can be done by creating a specific brand allocation method through trade marketing strategies, that draw clear difference in between Congoleum Corp Abridged products and other competitor items.

Congoleum Corp Abridged Exhibits