Longtop Financial Technologies A Case Study Solution

Longtop Financial Technologies A is presently among 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 decrease mortality rate. At the exact same time, the Page siblings from Switzerland also found The Anglo-Swiss Condensed Milk Business. The 2 ended up being competitors initially but later on merged in 1905, resulting in the birth of Longtop Financial Technologies A.
Business is now a global company. Unlike other international companies, it has senior executives from various countries and attempts to make decisions thinking about the whole world. Longtop Financial Technologies A currently has more than 500 factories worldwide and a network spread throughout 86 nations.

Purpose

The purpose of Longtop Financial Technologies A Corporation is to improve the lifestyle of individuals by playing its part and supplying healthy food. It wants to help the world in shaping a healthy and much better future for it. It likewise wants to motivate people to live a healthy life. While ensuring that the business is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Longtop Financial Technologies A's vision is to offer its consumers with food that is healthy, high in quality and safe to eat. It wishes to be innovative and concurrently comprehend the needs and requirements of its customers. Its vision is to grow fast and offer items that would satisfy the requirements of each age. Longtop Financial Technologies A envisions to develop a well-trained labor force which would help the business to grow
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Mission

Longtop Financial Technologies A's objective is that as presently, it is the leading company in the food market, it believes in 'Excellent Food, Great Life". Its objective is to offer its consumers with a variety of options that are healthy and best in taste also. It is concentrated on providing the best food to its consumers throughout the day and night.

Products.

Longtop Financial Technologies A has a large variety of products that it uses to its customers. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has actually set its goals and objectives. These goals and objectives are listed below.
• One goal of the business is to reach zero landfill status. (Business, aboutus, 2017).
• Another objective of Longtop Financial Technologies A is to waste minimum food during production. Frequently, the food produced is lost even prior to it reaches the clients.
• Another thing that Business is dealing with is to enhance its product packaging in such a way that it would help it to reduce the above-mentioned issues and would also ensure the shipment of high quality of its items to its clients.
• Meet worldwide standards of the environment.
• Build a relationship based upon trust with its customers, organisation partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the strategy 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 method. The target of the business is not attained as the sales were anticipated to grow higher 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 current Business method is based on the idea of Nutritious, Health and Health (NHW). This strategy deals with the idea to bringing modification in the customer preferences about food and making the food things much healthier worrying about the health issues.
The vision of this strategy is based upon the key method i.e. 60/40+ which simply means that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary value. The items will be made with extra dietary value in contrast to all other products in market gaining it a plus on its nutritional material.
This strategy was embraced to bring more delicious plus nutritious foods and beverages in market than ever. In competitors with other companies, with an objective of maintaining its trust over consumers as Business Company has acquired more relied on by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing actual amount of spending shows 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 Revenue Margin is increasing while R&D as a portion of sales is decreasing. This indication also shows a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D advancement instead of payment of debts. This increasing financial obligation ratio pose a hazard of default of Business to its financiers and might lead a decreasing share prices. In terms of increasing debt ratio, the firm must not spend much on R&D and ought to pay its existing financial obligations to reduce the risk for financiers.
The increasing danger of financiers with increasing debt ratio and declining share rates can be observed by substantial decrease of EPS of Longtop Financial Technologies A stocks.
The sales development of company is also low as compare to its mergers and acquisitions due to slow understanding building of customers. This sluggish growth also hinder company to more invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Charts given up the Exhibits D and E.

TWOS Analysis

2 analysis can be used to obtain different strategies based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative items by big quantity of R&D Spending and mergers and acquisitions. It might increase the marketplace share of Business and increase the revenue margins for the company. It could likewise supply Business a long term competitive benefit over its rivals.
The international expansion of Business must be focused on market recording of developing countries by growth, bring in more clients through customer's commitment. As establishing countries are more populated than industrialized nations, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Longtop Financial Technologies A ought to do cautious acquisition and merger of organizations, as it might impact the customer's and society's understandings about Business. It needs to obtain and combine with those business which have a market credibility of healthy and nutritious companies. It would improve the understandings of customers about Business.
Business must not only spend its R&D on innovation, rather than it needs to also focus on the R&D spending over assessment of cost of different healthy products. This would increase expense efficiency of its products, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business ought to transfer to not only developing however also to developed countries. It ought to expands its geographical growth. This wide geographical expansion towards establishing and established countries would reduce the threat of possible losses in times of instability in various nations. It should widen its circle to numerous nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

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

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based on four elements; age, gender, earnings and occupation. Business produces a number of products related to infants i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary items. Longtop Financial Technologies A items are quite affordable by almost all levels, however its major targeted customers, in terms of income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in almost 86 nations. Its geographical segmentation is based upon two main elements i.e. average earnings level of the consumer as well as 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 life style of the consumer. For example, Business 3 in 1 Coffee target those consumers whose lifestyle is rather hectic and don't have much time.

Behavioral Segmentation

Longtop Financial Technologies A behavioral division is based upon the mindset understanding and awareness of the consumer. For instance its highly healthy items target those consumers who have a health conscious mindset towards their consumptions.

Longtop Financial Technologies A Alternatives

In order to sustain the brand in the market and keep the customer undamaged with the brand name, there are 2 options:
Alternative: 1
The Business 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 business. However, spending on R&D would be sunk cost.
2. The company can resell the gotten units in the market, if it fails to execute its technique. Nevertheless, quantity invest in the R&D might not be restored, and it will be considered entirely sunk expense, if it do not offer potential results.
3. Spending on R&D supply sluggish development in sales, as it takes long period of time to present a product. Nevertheless, acquisitions provide fast results, as it supply the business already developed product, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the company to face misconception of consumers about Business core worths of healthy and healthy items.
2 Big costs on acquisitions than R&D would send a signal of business's inadequacy of establishing innovative products, and would outcomes in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the line of product of the business by the items which are already present in the market, making business not able to introduce new innovative items.
Alternative: 2.
The Business must invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the business to produce more ingenious items.
2. It would offer 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 offered to a totally new market segment.
4. Ingenious products will supply long term advantages and high market share in long term.
Cons:
1. It would reduce the earnings margins of the business.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would affect the company at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of business, which might provide an unfavorable signal to the financiers, and might result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Pros:
1. It would allow the business to introduce new innovative items with less threat of converting the costs 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 terms of the business's overall wealth in addition to in regards to ingenious products.
Cons:
1. Danger of conversion of R&D spending into sunk expense, higher than alternative 1 lower than alternative 2.
2. Risk of misunderstanding about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Intro of less variety of innovative products than alternative 2 and high variety of innovative items than alternative 1.

Longtop Financial Technologies A Conclusion

Business has stayed the top market gamer for more than a years. It has actually institutionalized its methods and culture to align itself with the market modifications and customer habits, which has ultimately enabled it to sustain its market share. Though, Business has developed significant market share and brand name identity in the city markets, it is advised that the business must focus on the rural areas in regards to establishing brand name loyalty, awareness, and equity, such can be done by developing a specific brand name allotment method through trade marketing methods, that draw clear distinction between Longtop Financial Technologies A items and other rival products. Moreover, Business needs to take advantage of its brand name picture of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will permit the company to develop brand equity for newly introduced and already produced products on a higher platform, making the efficient usage of resources and brand name image in the market.

Longtop Financial Technologies A Exhibits