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Enron Collapse Case Study Solution

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Enron Collapse Case Study Analysis

Business is presently one of the greatest food chains worldwide. It was established by Henri Enron Collapse in 1866, a German Pharmacist who first launched "FarineLactee"; a mix of flour and milk to feed babies and reduce death rate.
Business is now a multinational company. Unlike other multinational companies, it has senior executives from various countries and tries to make decisions thinking about the whole world. Enron Collapse presently has more than 500 factories around the world and a network spread throughout 86 countries.

Purpose

The purpose of Enron Collapse Corporation is to boost the lifestyle of individuals by playing its part and supplying healthy food. It wants to help the world in forming a healthy and much better future for it. It likewise wants to motivate individuals to live a healthy life. 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

Enron Collapse's vision is to supply its clients with food that is healthy, high in quality and safe to eat. It wishes to be ingenious and at the same time comprehend the needs and requirements of its consumers. Its vision is to grow fast and offer products that would please the requirements of each age. Enron Collapse envisions to establish a trained workforce which would help the company to grow
.

Mission

Enron Collapse's mission is that as presently, it is the leading company in the food market, it believes in 'Great Food, Great Life". Its mission is to supply its consumers with a variety of options that are healthy and best in taste. It is focused on offering the best food to its consumers throughout the day and night.

Products.

Enron Collapse has a wide variety of items that it offers to its consumers. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the company has actually set its goals and objectives. These objectives and goals are listed below.
• One goal of the company is to reach no garbage dump status. (Business, aboutus, 2017).
• Another goal of Enron Collapse is to waste minimum food throughout production. Usually, the food produced is wasted even prior to it reaches the clients.
• Another thing that Business is working on is to improve its product packaging in such a method that it would help it to minimize the above-mentioned problems and would also ensure the delivery of high quality of its products to its clients.
• Meet global standards of the environment.
• Construct a relationship based upon trust with its customers, organisation partners, employees, 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 nation is investing more on acquisitions and mergers to support its NHW technique. The target of the business is not achieved as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, given in Exhibit H. There is a need to focus more on the sales then the development technology. Otherwise, it may result in the decreased profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based on the principle of Nutritious, Health and Wellness (NHW). This method deals with the concept to bringing change in the customer preferences about food and making the food things much healthier worrying about the health problems.
The vision of this technique is based on the secret method i.e. 60/40+ which simply suggests that the items will have a rating of 60% on the basis of taste and 40% is based upon its dietary worth. The products will be manufactured with additional nutritional worth in contrast to all other items in market acquiring it a plus on its dietary content.
This technique was embraced to bring more tasty plus nutritious foods and beverages in market than ever. In competitors with other companies, with an objective of maintaining its trust over customers as Business Company has gotten more relied on by clients.

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing actual quantity of costs reveals that the sales are increasing at a greater rate than its R&D spending, and allow the company to more spend on R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This sign also shows a green light to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of debts. This increasing financial obligation ratio position a danger of default of Business to its financiers and might lead a decreasing share rates. In terms of increasing financial obligation ratio, the firm ought to not spend much on R&D and must pay its current financial obligations to reduce the threat for financiers.
The increasing threat of investors with increasing financial obligation ratio and decreasing share rates can be observed by huge decrease of EPS of Enron Collapse 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 impede business to additional 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 Charts given in the Exhibitions D and E.

TWOS Analysis


2 analysis can be utilized to obtain various techniques based on the SWOT Analysis given above. A short summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business needs to present more ingenious items by large amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the revenue margins for the company. It might likewise provide Business a long term competitive advantage over its competitors.
The worldwide expansion of Business should be concentrated on market recording of developing countries by expansion, drawing in more customers through client's commitment. As establishing nations are more populous than industrialized countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisEnron Collapse ought to do careful acquisition and merger of companies, as it might affect the customer's and society's perceptions about Business. It should get and combine with those companies which have a market reputation of healthy and healthy companies. It would enhance the perceptions of customers about Business.
Business needs to not only spend its R&D on development, instead of it must likewise focus on the R&D spending over assessment of cost of different healthy products. This would increase cost performance of its items, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business ought to transfer to not only developing but also to developed nations. It should expands its geographical growth. This large geographical growth towards establishing and established countries would minimize the threat of potential losses in times of instability in various nations. It must broaden its circle to different nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It ought to obtain and merge with those countries having a goodwill of being a healthy company in the market. It would also allow the business to utilize its potential resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based upon 4 elements; age, gender, earnings and occupation. For instance, Business produces numerous items associated with babies i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary products. Enron Collapse products are quite cost effective by almost all levels, however its significant targeted consumers, in terms of income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in nearly 86 nations. Its geographical division is based upon two main elements i.e. typical 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 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 consumers whose life design is rather hectic and do not have much time.

Behavioral Segmentation

Enron Collapse behavioral segmentation is based upon the attitude understanding and awareness of the customer. Its extremely nutritious products target those clients who have a health mindful attitude towards their intakes.

Enron Collapse Alternatives

In order to sustain the brand in the market and keep the customer intact with the brand, there are 2 alternatives:
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. Nevertheless, 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 method. Amount spend on the R&D might not be restored, and it will be thought about entirely sunk expense, if it do not give potential results.
3. Investing in R&D supply sluggish growth in sales, as it takes long period of time to introduce an item. However, acquisitions offer fast results, as it provide the company currently developed product, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the company to deal with 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 company's inadequacy of establishing innovative items, and would results in 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 business unable to present new innovative items.
Option: 2.
The Business ought to invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the company to produce more ingenious products.
2. It would supply the company a strong competitive position in the market.
3. It would enable the company to increase its targeted customers by presenting those products which can be used to a completely brand-new market sector.
4. Innovative products will supply long term advantages and high market share in long run.
Cons:
1. It would decrease the revenue margins of the company.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would affect the business at large. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could provide an unfavorable signal to the financiers, and could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to present new innovative items with less danger of transforming the spending on R&D into sunk expense.
2. It would provide a positive signal to the financiers, as the total assets of the company would increase with its substantial R&D costs.
3. It would not impact the earnings margins of the company at a large rate as compare to alternative 2.
4. It would offer the business a strong long term market position in regards to the company's total wealth in addition to in regards to ingenious products.
Cons:
1. Threat of conversion of R&D costs into sunk expense, greater than option 1 lower than alternative 2.
2. Risk of mistaken belief about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Intro of less variety of ingenious items than alternative 2 and high variety of innovative items than alternative 1.

Enron Collapse Conclusion

RecommendationsBusiness has stayed the leading market player for more than a years. It has institutionalised its methods and culture to align itself with the market changes and customer habits, which has eventually allowed it to sustain its market share. Though, Business has actually developed considerable market share and brand name identity in the urban markets, it is suggested that the business needs to focus on the backwoods in terms of establishing brand loyalty, awareness, and equity, such can be done by producing a particular brand allowance technique through trade marketing tactics, that draw clear difference in between Enron Collapse items and other rival items. Moreover, Business must take advantage of its brand name image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will enable the business to develop brand name equity for recently presented and currently produced products on a higher platform, making the efficient usage of resources and brand image in the market.

Enron Collapse Exhibits

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

Changing requirements of international food.
Boosted market share.
Transforming understanding towards healthier products
Improvements in R&D and also QA departments.

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

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible given that 6000
Highest after Service with much less development than Organisation 4th Least expensive
R&D Spending Highest possible considering that 2001 Highest after Business 2nd Lowest
Net Profit Margin Highest possible considering that 2002 with fast development from 2004 to 2018 Due to sale of Alcon in 2018. Practically equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as health factor Highest possible number of brand names with lasting methods Biggest confectionary and also processed foods brand name worldwide Largest milk products and also bottled water brand worldwide
Segmentation Middle and upper middle degree consumers worldwide Private customers in addition to family group Any age as well as Revenue Consumer Teams Middle and top center level customers worldwide
Number of Brands 7th 8th 1st 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 61292 792925 623612 534821 564471
Net Profit Margin 1.82% 5.99% 87.48% 8.85% 92.14%
EPS (Earning Per Share) 86.89 1.65 1.76 5.87 98.61
Total Asset 369685 583547 567152 398633 16754
Total Debt 31813 65783 17239 35589 69318
Debt Ratio 48% 17% 81% 33% 62%
R&D Spending 8313 1983 3342 1599 8753
R&D Spending as % of Sales 7.47% 8.28% 8.19% 1.87% 9.38%

Enron Collapse Executive Summary Enron Collapse Swot Analysis Enron Collapse Vrio Analysis Enron Collapse Pestel Analysis
Enron Collapse Porters Analysis Enron Collapse Recommendations