Flagstar Cos Inc Case Study Solution

Flagstar Cos Inc is presently among the most significant food chains worldwide. It was founded by Harvard in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed infants and reduce death rate. At the exact same time, the Page siblings from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Company. The two ended up being rivals in the beginning however in the future combined in 1905, resulting in the birth of Flagstar Cos Inc.
Business is now a global business. Unlike other international companies, it has senior executives from different countries and attempts to make decisions considering the entire world. Flagstar Cos Inc currently has more than 500 factories worldwide and a network spread throughout 86 countries.

Purpose

The function of Flagstar Cos Inc Corporation is to improve the lifestyle of people by playing its part and offering healthy food. It wishes to help the world in shaping a healthy and much better future for it. It likewise wishes to encourage people to live a healthy life. While making sure that the business is prospering in the long run, that's how it plays its part for a much better and healthy future

Vision

Flagstar Cos Inc's vision is to provide its clients with food that is healthy, high in quality and safe to consume. Business imagines to establish a trained labor force which would help the company to grow
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Mission

Flagstar Cos Inc's objective is that as presently, it is the leading company in the food market, it thinks in 'Good Food, Excellent Life". Its mission is to offer its consumers with a range of options that are healthy and finest in taste as well. It is focused on providing the best food to its clients throughout the day and night.

Products.

Business has a large range of products that it uses to its consumers. Its products include food for infants, cereals, dairy products, snacks, chocolates, food for pet and mineral water. It has around four hundred and fifty (450) factories around the world and around 328,000 workers. In 2011, Business was noted as the most rewarding company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has laid down its objectives and goals. These goals and goals are noted below.
• One goal of the company is to reach absolutely no land fill status. (Business, aboutus, 2017).
• Another goal of Flagstar Cos Inc is to squander minimum food throughout production. Most often, the food produced is wasted even before it reaches the consumers.
• Another thing that Business is working on is to improve its packaging in such a method that it would help it to decrease those problems and would also ensure the shipment of high quality of its products to its customers.
• Meet worldwide standards of the environment.
• Develop a relationship based upon trust with its customers, organisation partners, staff members, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the strategy 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 technique. The target of the business 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%, given in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based on the principle of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing modification in the client preferences about food and making the food things healthier concerning about the health issues.
The vision of this strategy is based upon the key technique i.e. 60/40+ which just indicates that the products 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 extra nutritional value in contrast to all other products in market gaining it a plus on its nutritional content.
This method was embraced to bring more yummy plus nutritious foods and beverages in market than ever. In competitors with other business, with an intention of retaining its trust over consumers as Business Company has actually gotten more trusted by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing actual quantity of spending reveals that the sales are increasing at a greater rate than its R&D spending, and permit the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This indication also reveals a thumbs-up to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing debt ratio posture a hazard of default of Business to its investors and could lead a declining share rates. In terms of increasing debt ratio, the company should not spend much on R&D and must pay its present financial obligations to reduce the threat for financiers.
The increasing risk of investors with increasing financial obligation ratio and declining share rates can be observed by huge decrease of EPS of Flagstar Cos Inc stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow understanding building of customers. This slow growth also prevent company 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 estimations and Graphs given up the Displays D and E.

TWOS Analysis

2 analysis can be used to derive numerous methods based upon the SWOT Analysis offered above. A brief summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should introduce more innovative items by big quantity of R&D Costs and mergers and acquisitions. It might increase the marketplace share of Business and increase the profit margins for the company. It could likewise provide Business a long term competitive advantage over its competitors.
The global growth of Business must be concentrated on market catching of establishing countries by expansion, bring in more customers through client's loyalty. As developing countries are more populous than industrialized nations, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Flagstar Cos Inc needs to do cautious acquisition and merger of companies, as it might impact the client's and society's perceptions about Business. It should acquire and merge with those companies which have a market reputation of healthy and nutritious business. It would improve the perceptions of consumers about Business.
Business needs to not only invest its R&D on development, rather than it needs to likewise focus on the R&D spending over examination of cost of numerous healthy products. This would increase expense effectiveness 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 just developing however likewise to developed countries. It ought to widen its circle to various nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Flagstar Cos Inc ought to wisely control its acquisitions to prevent the threat of misconception from the consumers about Business. It ought to obtain and combine with those nations having a goodwill of being a healthy company in the market. This would not just improve the understanding of consumers about Business however would likewise increase the sales, revenue margins and market share of Business. It would also make it possible for the company to utilize its possible resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon four aspects; age, gender, earnings and profession. For example, Business produces several products associated with babies i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary items. Flagstar Cos Inc products are rather inexpensive by almost all levels, but its major targeted consumers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its existence in almost 86 countries. Its geographical division is based upon 2 primary factors i.e. average income level of the customer in addition to the environment of the area. For instance, 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 segmentation of Business is based upon the personality and lifestyle of the client. Business 3 in 1 Coffee target those clients whose life style is quite hectic and don't have much time.

Behavioral Segmentation

Flagstar Cos Inc behavioral segmentation is based upon the mindset knowledge and awareness of the customer. For example its extremely healthy products target those customers who have a health conscious mindset towards their consumptions.

Flagstar Cos Inc Alternatives

In order to sustain the brand in the market and keep the consumer undamaged with the brand name, there are two choices:
Alternative: 1
The Company ought to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall properties of the business, increasing the wealth of the company. Nevertheless, costs on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it stops working to execute its strategy. Nevertheless, quantity invest in the R&D might not be revived, and it will be thought about completely sunk expense, if it do not give possible results.
3. Spending on R&D offer slow development in sales, as it takes very long time to present an item. However, acquisitions offer quick results, as it supply the company already developed item, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's values like Kraftz foods can lead the company to deal with misunderstanding of consumers about Business core values of healthy and healthy products.
2 Big costs on acquisitions than R&D would send out a signal of business's inefficiency of developing innovative items, and would results in consumer's dissatisfaction too.
3. Big acquisitions than R&D would extend the product line of the business by the products which are already present in the market, making company unable to present brand-new ingenious products.
Alternative: 2.
The Business needs to invest more on its R&D instead of acquisitions.
Pros:
1. It would enable the company to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would allow the business to increase its targeted customers by introducing those items which can be used to a totally brand-new market sector.
4. Ingenious products will provide long term benefits and high market share in long term.
Cons:
1. It would reduce 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 big. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might supply a negative signal to the investors, and could result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would allow the company to introduce brand-new innovative products with less threat of transforming the spending on R&D into sunk cost.
2. It would offer a positive signal to the investors, as the total properties of the business would increase with its considerable R&D costs.
3. It would not affect the revenue margins of the business 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 business's total wealth as well as in terms of ingenious items.
Cons:
1. Risk 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. Intro of less variety of ingenious items than alternative 2 and high variety of ingenious products than alternative 1.

Flagstar Cos Inc Conclusion

Business has remained the top market player for more than a years. It has institutionalised its methods and culture to align itself with the market changes and consumer behavior, which has ultimately permitted it to sustain its market share. Though, Business has developed considerable market share and brand name identity in the metropolitan markets, it is advised that the company needs to focus on the backwoods in regards to establishing brand commitment, awareness, and equity, such can be done by creating a specific brand allotment technique through trade marketing tactics, that draw clear difference in between Flagstar Cos Inc products and other competitor items. Furthermore, Business must utilize its brand picture of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other categories such as nutrition. This will permit the business to develop brand name equity for recently introduced and currently produced items on a higher platform, making the effective usage of resources and brand name image in the market.

Flagstar Cos Inc Exhibits