Menu

Molycorp Financing The Production Of Rare Earth Minerals A Case Study Solution

Case Study Solution And Analysis


Home >> Harvard >> Molycorp Financing The Production Of Rare Earth Minerals A >>

Molycorp Financing The Production Of Rare Earth Minerals A Case Study Help

Molycorp Financing The Production Of Rare Earth Minerals A is presently among the biggest food cycle worldwide. It was established by Harvard in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed infants and reduce death rate. At the same time, the Page siblings from Switzerland also found The Anglo-Swiss Condensed Milk Company. The two ended up being rivals at first but later combined in 1905, resulting in the birth of Molycorp Financing The Production Of Rare Earth Minerals A.
Business is now a transnational company. Unlike other international business, it has senior executives from various nations and tries to make decisions considering the whole world. Molycorp Financing The Production Of Rare Earth Minerals A presently has more than 500 factories around the world and a network spread throughout 86 nations.

Purpose

The function of Molycorp Financing The Production Of Rare Earth Minerals A Corporation is to improve the lifestyle of individuals by playing its part and supplying healthy food. It wishes to help the world in shaping a healthy and much better future for it. It likewise wishes to encourage individuals to live a healthy life. While making sure that the company is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

Molycorp Financing The Production Of Rare Earth Minerals A's vision is to provide its clients with food that is healthy, high in quality and safe to eat. Business envisions to develop a trained labor force which would help the company to grow
.

Mission

Molycorp Financing The Production Of Rare Earth Minerals A's mission is that as presently, it is the leading business in the food market, it thinks in 'Excellent Food, Good Life". Its mission is to offer its consumers with a range of options that are healthy and finest in taste too. It is focused on providing the best food to its consumers throughout the day and night.

Products.

Molycorp Financing The Production Of Rare Earth Minerals A has a large variety of items that it uses to its clients. In 2011, Business was listed as the most rewarding organization.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the business has set its objectives and goals. These goals and objectives are noted below.
• One objective of the company is to reach zero land fill status. (Business, aboutus, 2017).
• Another objective of Molycorp Financing The Production Of Rare Earth Minerals A is to squander minimum food throughout production. Frequently, the food produced is wasted even before it reaches the consumers.
• 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 complications and would also guarantee the shipment of high quality of its products to its customers.
• Meet global standards of the environment.
• Build a relationship based on trust with its customers, business partners, staff members, 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 method. The target of the company 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%, given in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based on the idea of Nutritious, Health and Health (NHW). This method deals with the idea to bringing modification in the consumer choices about food and making the food stuff healthier concerning about the health concerns.
The vision of this method is based upon the key approach i.e. 60/40+ which merely indicates that the items will have a rating of 60% on the basis of taste and 40% is based on its dietary worth. The products will be made with additional nutritional worth in contrast to all other items in market getting it a plus on its dietary content.
This strategy was embraced to bring more yummy plus healthy foods and beverages in market than ever. In competitors with other companies, with an intent of keeping its trust over consumers as Business Company has gotten more trusted by costumers.

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing real quantity of spending shows that the sales are increasing at a higher rate than its R&D costs, and permit the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This sign also reveals a thumbs-up to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D advancement rather than payment of financial obligations. This increasing financial obligation ratio position a risk of default of Business to its financiers and could lead a decreasing share costs. Therefore, in regards to increasing financial obligation ratio, the company ought to not invest much on R&D and should pay its present debts to reduce the danger 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 Molycorp Financing The Production Of Rare Earth Minerals A stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This slow development likewise prevent 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 estimations and Charts given up the Displays D and E.

TWOS Analysis


TWOS analysis can be utilized to derive different methods based on the SWOT Analysis provided above. A short summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should introduce more innovative 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 business. It might likewise offer Business a long term competitive benefit over its rivals.
The international expansion of Business must be concentrated on market catching of establishing countries by growth, bring in more clients through customer's loyalty. As establishing nations are more populated than industrialized nations, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMolycorp Financing The Production Of Rare Earth Minerals A should do careful acquisition and merger of companies, as it could impact the consumer's and society's understandings about Business. It must get and combine with those companies which have a market reputation of healthy and healthy business. It would enhance the understandings of customers about Business.
Business ought to not just invest its R&D on development, instead of it needs to also focus on the R&D spending over assessment of expense of different healthy products. This would increase expense efficiency of its items, which will result in increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

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

Strategies to overcome weaknesses to avoid threats

It should obtain and merge with those countries having a goodwill of being a healthy business in the market. It would also make it possible for the company to use its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based on 4 aspects; age, gender, income and occupation. Business produces numerous products related to infants i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Molycorp Financing The Production Of Rare Earth Minerals A products are quite budget-friendly by practically all levels, but its significant targeted consumers, in terms of earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in nearly 86 countries. Its geographical segmentation is based upon 2 primary elements i.e. typical income level of the customer as well as the climate of the region. Singapore Business Business's segmentation is done on the basis of the weather condition of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the personality and lifestyle of the client. For instance, Business 3 in 1 Coffee target those consumers whose life style is quite busy and do not have much time.

Behavioral Segmentation

Molycorp Financing The Production Of Rare Earth Minerals A behavioral segmentation is based upon the mindset understanding and awareness of the consumer. Its highly healthy products target those consumers who have a health conscious mindset towards their consumptions.

Molycorp Financing The Production Of Rare Earth Minerals A Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand, there are two alternatives:
Alternative: 1
The Company should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the business, increasing the wealth of the business. 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. Nevertheless, amount invest in the R&D could not be restored, and it will be considered totally sunk cost, if it do not offer potential results.
3. Investing in R&D offer slow development in sales, as it takes long period of time to present a product. Nevertheless, acquisitions supply fast outcomes, as it offer the business currently established product, which can be marketed right after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to deal with misconception of consumers about Business core values of healthy and healthy products.
2 Large costs on acquisitions than R&D would send a signal of business's inadequacy of establishing innovative products, and would results in consumer's discontentment too.
3. Large acquisitions than R&D would extend the product line of the company by the products which are currently present in the market, making business unable to introduce new ingenious items.
Alternative: 2.
The Business ought to invest more on its R&D rather than acquisitions.
Pros:
1. It would enable 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 products which can be offered to an entirely brand-new market section.
4. Innovative products will provide long term advantages and high market share in long run.
Cons:
1. It would decrease the revenue margins of the business.
2. In case of failure, the whole costs on R&D would be considered as sunk expense, and would affect the company at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might provide a negative signal to the investors, and might result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to introduce new innovative items with less danger of transforming the costs on R&D into sunk cost.
2. It would offer a favorable signal to the financiers, as the total properties of the business would increase with its considerable R&D costs.
3. It would not impact the profit margins of the business at a big rate as compare to alternative 2.
4. It would supply the company a strong long term market position in regards to the company's total wealth as well as in terms of ingenious items.
Cons:
1. Danger of conversion of R&D spending into sunk cost, higher than alternative 1 lower than alternative 2.
2. Danger of mistaken belief about the acquisitions, greater than alternative 2 and lower than option 1.
3. Introduction of less number of innovative products than alternative 2 and high number of ingenious items than alternative 1.

Molycorp Financing The Production Of Rare Earth Minerals A Conclusion

RecommendationsIt has institutionalised its strategies and culture to align itself with the market changes and customer habits, which has actually eventually permitted it to sustain its market share. Business has actually developed significant market share and brand identity in the urban markets, it is suggested that the business should focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by creating a particular brand name allotment strategy through trade marketing tactics, that draw clear difference in between Molycorp Financing The Production Of Rare Earth Minerals A products and other competitor products.

Molycorp Financing The Production Of Rare Earth Minerals A Exhibits

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

Altering standards of worldwide food.
Boosted market share.
Changing understanding towards healthier items
Improvements in R&D and QA divisions.

Intro of E-marketing.
No such influence as it is good.
Worries over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest because 4000
Greatest after Business with less growth than Company 4th Most affordable
R&D Spending Highest possible considering that 2005 Highest possible after Organisation 6th Most affordable
Net Profit Margin Highest possible considering that 2007 with rapid development from 2005 to 2015 Because of sale of Alcon in 2012. Practically equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition and health factor Greatest variety of brand names with sustainable methods Biggest confectionary and processed foods brand name worldwide Largest dairy items as well as mineral water brand on the planet
Segmentation Middle as well as top middle level customers worldwide Specific clients together with family team Every age as well as Income Consumer Teams Middle and top middle level customers worldwide
Number of Brands 9th 5th 1st 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 82547 925743 425198 179847 155178
Net Profit Margin 2.34% 2.31% 26.84% 7.12% 83.44%
EPS (Earning Per Share) 41.14 3.69 7.18 1.91 38.55
Total Asset 716159 669174 845641 876412 14148
Total Debt 67222 15378 26468 19415 46993
Debt Ratio 14% 34% 11% 32% 48%
R&D Spending 5459 7326 1837 8585 6695
R&D Spending as % of Sales 4.24% 2.81% 3.72% 1.23% 9.81%

Molycorp Financing The Production Of Rare Earth Minerals A Executive Summary Molycorp Financing The Production Of Rare Earth Minerals A Swot Analysis Molycorp Financing The Production Of Rare Earth Minerals A Vrio Analysis Molycorp Financing The Production Of Rare Earth Minerals A Pestel Analysis
Molycorp Financing The Production Of Rare Earth Minerals A Porters Analysis Molycorp Financing The Production Of Rare Earth Minerals A Recommendations