Dividend Policy At Fpl Group Inc A Case Study Solution

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Dividend Policy At Fpl Group Inc A Case Study Solution

Dividend Policy At Fpl Group Inc A is currently one of the most significant food cycle worldwide. It was founded by Harvard in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix of flour and milk to feed babies and reduce death rate. At the exact same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Company. The two ended up being competitors initially but later on merged in 1905, leading to the birth of Dividend Policy At Fpl Group Inc A.
Business is now a transnational company. Unlike other international companies, it has senior executives from different nations and tries to make decisions considering the entire world. Dividend Policy At Fpl Group Inc A presently has more than 500 factories worldwide and a network spread throughout 86 countries.


The purpose of Business Corporation is to enhance the quality of life of people by playing its part and offering healthy food. While making sure that the company is succeeding in the long run, that's how it plays its part for a much better and healthy future


Dividend Policy At Fpl Group Inc A's vision is to offer its clients with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and at the same time comprehend the needs and requirements of its clients. Its vision is to grow quickly and supply products that would please the requirements of each age. Dividend Policy At Fpl Group Inc A pictures to establish a trained labor force which would help the business to grow


Dividend Policy At Fpl Group Inc A's objective is that as presently, it is the leading company in the food market, it thinks in 'Great Food, Great Life". Its mission is to provide its customers with a variety of options that are healthy and best in taste too. It is focused on supplying the best food to its consumers throughout the day and night.


Dividend Policy At Fpl Group Inc A has a broad range of products that it offers 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 business has put down its goals and goals. These objectives and goals are noted below.
• One goal of the business is to reach no landfill status. (Business, aboutus, 2017).
• Another goal of Dividend Policy At Fpl Group Inc A is to waste minimum food during production. Usually, the food produced is lost even prior to it reaches the consumers.
• Another thing that Business is working on is to enhance its product packaging in such a way that it would help it to lower the above-mentioned problems and would likewise ensure the delivery of high quality of its items to its clients.
• Meet international standards of the environment.
• Build a relationship based upon trust with its customers, company partners, staff members, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the method of NHW and investing more of its earnings on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW method. The target of the company is not attained as the sales were expected 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 strategy is based on the concept of Nutritious, Health and Wellness (NHW). This technique deals with the concept to bringing change in the customer choices about food and making the food stuff healthier concerning about the health problems.
The vision of this method is based upon the secret approach i.e. 60/40+ which simply means that the products will have a rating of 60% on the basis of taste and 40% is based upon its nutritional worth. The products will be produced with extra nutritional value in contrast to all other products in market getting it a plus on its nutritional material.
This method was embraced to bring more tasty plus healthy foods and drinks in market than ever. In competitors with other business, with an intent of keeping its trust over clients as Business Company has actually gained more relied on by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing actual quantity of spending shows that the sales are increasing at a higher rate than its R&D costs, and permit the business to more spend on R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is declining. This indicator likewise shows a thumbs-up 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 instead of payment of financial obligations. This increasing debt ratio posture a risk of default of Business to its financiers and could lead a decreasing share rates. In terms of increasing financial obligation ratio, the firm ought to not invest much on R&D and ought to pay its current financial obligations to decrease the danger for investors.
The increasing danger of financiers with increasing financial obligation ratio and declining share costs can be observed by substantial decrease of EPS of Dividend Policy At Fpl Group Inc A stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This slow growth likewise prevent business to further spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Graphs given in the Displays D and E.

TWOS Analysis

2 analysis can be used to derive different 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 should introduce more innovative products 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 company. It might likewise provide Business a long term competitive benefit over its competitors.
The global expansion of Business should be focused on market capturing of developing nations by expansion, bring in more consumers through client's commitment. As developing nations are more populous than industrialized nations, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisDividend Policy At Fpl Group Inc A ought to do cautious acquisition and merger of organizations, as it might impact the client's and society's understandings about Business. It ought to obtain and merge with those business which have a market reputation of healthy and nutritious business. It would enhance the understandings of customers about Business.
Business should not just spend its R&D on innovation, rather than it needs to also concentrate on the R&D spending over examination of expense of various healthy products. This would increase expense effectiveness of its items, which will lead to increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just developing but likewise to industrialized nations. It needs to widen its circle to different countries like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Dividend Policy At Fpl Group Inc A should carefully manage its acquisitions to prevent the danger of mistaken belief from the customers about Business. It must get and combine with those countries having a goodwill of being a healthy company in the market. This would not just enhance the perception of consumers about Business however would likewise increase the sales, profit margins and market share of Business. It would likewise enable 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 demographic segmentation of Business is based on 4 aspects; age, gender, earnings and occupation. For example, Business produces numerous products associated with babies i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Dividend Policy At Fpl Group Inc A products are rather budget friendly by nearly all levels, but its major targeted consumers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in nearly 86 nations. Its geographical division is based upon 2 main factors i.e. average income level of the customer in addition to the climate of the area. For instance, Singapore Business Business's division is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and lifestyle of the client. Business 3 in 1 Coffee target those consumers whose life design is quite hectic and do not have much time.

Behavioral Segmentation

Dividend Policy At Fpl Group Inc A behavioral division is based upon the mindset knowledge and awareness of the client. Its extremely nutritious items target those customers who have a health mindful attitude towards their intakes.

Dividend Policy At Fpl Group Inc A Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are two options:
Option: 1
The Business needs to spend more on acquisitions than on the R&D.
1. Acquisitions would increase total assets of the business, increasing the wealth of the company. Nevertheless, spending on R&D would be sunk cost.
2. The business can resell the obtained systems in the market, if it stops working to implement its strategy. However, quantity spend on the R&D could not be revived, and it will be thought about totally sunk expense, if it do not provide possible outcomes.
3. Spending on R&D offer sluggish growth in sales, as it takes long time to present an item. Acquisitions supply fast results, as it supply the company currently established product, which can be marketed soon after the acquisition.
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the company to deal with misconception of customers about Business core worths of healthy and healthy items.
2 Big spending on acquisitions than R&D would send out a signal of business's ineffectiveness of developing innovative items, and would outcomes in customer's discontentment.
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 business not able to introduce new ingenious products.
Alternative: 2.
The Business needs to invest more on its R&D rather than acquisitions.
1. It would enable the company to produce more ingenious items.
2. It would supply the business a strong competitive position in the market.
3. It would enable the business to increase its targeted clients by presenting those items which can be provided to an entirely brand-new market sector.
4. Ingenious items will provide long term advantages and high market share in long term.
1. It would reduce 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 business at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer an unfavorable signal to the financiers, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with considerable costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to present brand-new ingenious products with less risk of transforming the spending on R&D into sunk expense.
2. It would provide a favorable signal to the financiers, as the total properties of the company would increase with its considerable R&D costs.
3. It would not affect 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 total wealth along with in terms of innovative products.
1. Threat of conversion of R&D spending into sunk expense, higher than option 1 lower than alternative 2.
2. Danger of misconception about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less number of innovative products than alternative 2 and high number of ingenious products than alternative 1.

Dividend Policy At Fpl Group Inc A Conclusion

RecommendationsBusiness has stayed the leading market player for more than a years. It has actually institutionalised its techniques and culture to align itself with the marketplace changes and customer behavior, which has eventually permitted it to sustain its market share. Though, Business has actually developed substantial market share and brand identity in the metropolitan markets, it is recommended that the company needs to focus on the rural areas in terms of developing brand name commitment, awareness, and equity, such can be done by creating a specific brand allowance method through trade marketing strategies, that draw clear distinction in between Dividend Policy At Fpl Group Inc A products and other competitor items. Dividend Policy At Fpl Group Inc A needs to take advantage of its brand name image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will permit the company to develop brand equity for recently presented and currently produced products on a greater platform, making the reliable use of resources and brand name image in the market.

Dividend Policy At Fpl Group Inc A Exhibits

PESTEL Analysis
Governmental support

Transforming requirements of international food.
Improved market share. Altering perception in the direction of healthier items Improvements in R&D and also QA divisions.

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

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest because 2000 Highest after Business with much less development than Service 1st Most affordable
R&D Spending Highest possible given that 2005 Highest after Organisation 6th Cheapest
Net Profit Margin Highest considering that 2004 with quick growth from 2004 to 2018 Because of sale of Alcon in 2018. Almost equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health aspect Highest number of brand names with sustainable techniques Largest confectionary as well as processed foods brand name on the planet Biggest milk products and bottled water brand in the world
Segmentation Middle and also upper center level customers worldwide Specific consumers along with house team Any age and Revenue Customer Teams Middle and upper middle level consumers worldwide
Number of Brands 2nd 7th 7th 9th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 74833 397966 543447 179222 692467
Net Profit Margin 9.69% 7.45% 43.95% 7.87% 12.88%
EPS (Earning Per Share) 72.14 5.74 2.81 7.79 49.25
Total Asset 274542 119539 477855 954545 59425
Total Debt 22985 78577 89836 15887 33982
Debt Ratio 38% 98% 77% 11% 35%
R&D Spending 9372 8878 8715 6166 4968
R&D Spending as % of Sales 1.37% 9.88% 9.77% 2.54% 6.67%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations