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Mexico City Water Shortage Case Study Analysis

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Mexico City Water Shortage Case Study Analysis

Mexico City Water Shortage is currently one of the greatest 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 infants and decrease 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 merged in 1905, resulting in the birth of Mexico City Water Shortage.
Business is now a global business. Unlike other multinational companies, it has senior executives from different nations and tries to make choices considering the whole world. Mexico City Water Shortage currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The purpose of Mexico City Water Shortage Corporation is to improve the quality of life 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 also wants to encourage 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 much better and healthy future

Vision

Mexico City Water Shortage's vision is to offer its consumers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and at the same time understand the needs and requirements of its customers. Its vision is to grow fast and provide products that would satisfy the needs of each age group. Mexico City Water Shortage pictures to establish a trained labor force which would help the company to grow
.

Mission

Mexico City Water Shortage's mission is that as currently, it is the leading business in the food market, it believes in 'Good Food, Great Life". Its mission is to offer its consumers with a variety of choices that are healthy and finest in taste as well. It is focused on offering the very best food to its customers throughout the day and night.

Products.

Mexico City Water Shortage has a broad range of items that it uses to its clients. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has put down its objectives and objectives. These objectives and objectives are listed below.
• One goal of the business is to reach no landfill status. (Business, aboutus, 2017).
• Another objective of Mexico City Water Shortage is to lose minimum food throughout production. Most often, the food produced is squandered even before it reaches the customers.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to reduce those problems and would also guarantee the shipment of high quality of its products to its customers.
• Meet international standards of the environment.
• Develop a relationship based on trust with its customers, company partners, staff members, and federal government.

Critical Issues

Just Recently, Business Company is focusing more towards the method of NHW and investing more of its revenues on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW method. The target of the company is not accomplished as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibit H. There is a requirement to focus more on the sales then the development technology. Otherwise, it may lead to the decreased revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based upon the principle of Nutritious, Health and Health (NHW). This method handles the idea to bringing modification in the customer preferences about food and making the food things healthier worrying about the health concerns.
The vision of this strategy is based on the key approach i.e. 60/40+ which simply implies that the products will have a rating of 60% on the basis of taste and 40% is based upon its nutritional value. The products will be manufactured with additional nutritional value in contrast to all other items in market getting it a plus on its nutritional material.
This strategy was adopted to bring more delicious plus healthy foods and drinks in market than ever. In competition with other companies, with an objective of maintaining its trust over customers as Business Business has gotten more trusted by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing actual quantity of costs shows that the sales are increasing at a higher rate than its R&D costs, and allow the business to more invest in R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is declining. This sign likewise shows a green light 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 debts. This increasing debt ratio pose a risk of default of Business to its financiers and could lead a declining share rates. For that reason, in terms of increasing debt ratio, the company should not invest much on R&D and needs to pay its existing debts to reduce the danger for financiers.
The increasing risk of financiers with increasing financial obligation ratio and decreasing share costs can be observed by substantial decrease of EPS of Mexico City Water Shortage stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This sluggish development also impede business to further 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 up the Exhibitions D and E.

TWOS Analysis


2 analysis can be utilized to derive different methods based upon the SWOT Analysis given above. A brief summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business should introduce more ingenious products by large quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the profit margins for the company. It could likewise provide Business a long term competitive benefit over its rivals.
The international expansion of Business should be focused on market capturing of establishing nations by growth, drawing in more customers through customer's commitment. As developing countries are more populous than developed countries, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMexico City Water Shortage should do careful acquisition and merger of organizations, as it could impact the consumer's and society's perceptions about Business. It must get and combine with those companies which have a market credibility of healthy and nutritious business. It would enhance the perceptions of consumers about Business.
Business needs to not only spend its R&D on innovation, instead of it ought to also focus on the R&D spending over examination of cost of different nutritious items. This would increase cost performance of its products, which will result in increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business must move to not just developing but likewise to industrialized nations. It must expand its circle to various countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Mexico City Water Shortage must wisely control its acquisitions to prevent the danger of misunderstanding from the consumers about Business. It ought to acquire and merge with those nations having a goodwill of being a healthy business in the market. This would not just enhance the understanding of customers about Business but would also increase the sales, revenue margins and market share of Business. It would likewise enable the company to utilize its potential resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based on four elements; age, gender, earnings and occupation. Business produces numerous items related to children i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Mexico City Water Shortage products are quite cost effective by almost all levels, but its major targeted clients, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is made up of its presence in nearly 86 countries. Its geographical segmentation is based upon two main factors i.e. typical income level of the customer along with the climate of the region. For instance, Singapore Business Company's division is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the personality and lifestyle of the customer. Business 3 in 1 Coffee target those customers whose life design is rather busy and don't have much time.

Behavioral Segmentation

Mexico City Water Shortage behavioral segmentation is based upon the mindset understanding and awareness of the customer. For example its highly nutritious items target those clients who have a health mindful mindset towards their consumptions.

Mexico City Water Shortage Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand, there are two options:
Alternative: 1
The Company needs to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the company, increasing the wealth of the business. However, costs on R&D would be sunk expense.
2. The business can resell the gotten units in the market, if it fails to execute its method. Quantity invest on the R&D could not be restored, and it will be thought about totally sunk expense, if it do not give prospective results.
3. Investing in R&D supply slow growth in sales, as it takes long period of time to introduce an item. Nevertheless, acquisitions supply fast outcomes, as it offer the business 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 misunderstanding of consumers about Business core values of healthy and nutritious products.
2 Large spending on acquisitions than R&D would send a signal of business's ineffectiveness of establishing ingenious items, and would results in consumer's frustration too.
3. Big acquisitions than R&D would extend the product line of the company by the products which are currently present in the market, making company not able to present new innovative items.
Alternative: 2.
The Company should invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the business to produce more innovative products.
2. It would provide the business a strong competitive position in the market.
3. It would enable the company to increase its targeted customers by presenting those items which can be offered to an entirely new market section.
4. Innovative items will provide long term advantages and high market share in long run.
Cons:
1. It would decrease the profit margins of the company.
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 threat is not in the case of acquisitions.
3. It would not increase the wealth of company, which might supply an unfavorable signal to the financiers, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to introduce new ingenious items with less risk of transforming the costs on R&D into sunk expense.
2. It would supply a positive signal to the financiers, as the general possessions of the company would increase with its substantial R&D costs.
3. It would not affect the earnings margins of the company at a large rate as compare to alternative 2.
4. It would offer the company a strong long term market position in terms of the company's overall wealth along with in terms of innovative products.
Cons:
1. Threat of conversion of R&D costs into sunk expense, higher than alternative 1 lesser than alternative 2.
2. Danger of misunderstanding about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less number of ingenious items than alternative 2 and high variety of ingenious items than alternative 1.

Mexico City Water Shortage Conclusion

RecommendationsIt has actually institutionalized its methods and culture to align itself with the market changes and customer habits, which has ultimately enabled it to sustain its market share. Business has established substantial market share and brand name identity in the city markets, it is advised that the company needs to focus on the rural locations in terms of developing brand commitment, awareness, and equity, such can be done by producing a specific brand allotment technique through trade marketing methods, that draw clear difference between Mexico City Water Shortage products and other rival items.

Mexico City Water Shortage Exhibits

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

Altering requirements of global food.
Improved market share.
Altering understanding in the direction of much healthier items
Improvements in R&D and QA divisions.

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

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest since 8000
Highest after Organisation with much less growth than Company 9th Cheapest
R&D Spending Highest considering that 2003 Greatest after Company 6th Least expensive
Net Profit Margin Highest considering that 2004 with fast development from 2005 to 2013 Due to sale of Alcon in 2019. Almost equal to Kraft Foods Unification Nearly equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health aspect Highest variety of brands with lasting techniques Biggest confectionary as well as processed foods brand name in the world Biggest dairy items and also mineral water brand name worldwide
Segmentation Middle as well as top middle level consumers worldwide Specific consumers along with home team Any age as well as Earnings Customer Teams Center and also top center level consumers worldwide
Number of Brands 8th 9th 9th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 95686 482827 637548 659667 533471
Net Profit Margin 1.95% 1.55% 55.14% 7.88% 79.88%
EPS (Earning Per Share) 35.41 3.48 4.97 3.34 25.51
Total Asset 598959 736189 871534 296829 57962
Total Debt 47666 31924 71422 19889 15982
Debt Ratio 78% 71% 95% 74% 74%
R&D Spending 7921 1223 3296 8786 5554
R&D Spending as % of Sales 9.63% 9.25% 1.89% 6.81% 3.56%

Mexico City Water Shortage Executive Summary Mexico City Water Shortage Swot Analysis Mexico City Water Shortage Vrio Analysis Mexico City Water Shortage Pestel Analysis
Mexico City Water Shortage Porters Analysis Mexico City Water Shortage Recommendations