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

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

Business is presently one of the biggest food chains worldwide. It was established by Henri Molycorp Financing The Production Of Rare Earth Minerals A in 1866, a German Pharmacist who first launched "FarineLactee"; a mix of flour and milk to feed infants and reduce mortality rate.
Business is now a global business. Unlike other international business, it has senior executives from different 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 across 86 nations.


The purpose of Business Corporation is to boost the quality of life of individuals by playing its part and offering healthy food. While making sure that the business is succeeding in the long run, that's how it plays its part for a much better and healthy future


Molycorp Financing The Production Of Rare Earth Minerals A's vision is to offer its customers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and all at once comprehend the requirements and requirements of its consumers. Its vision is to grow fast and provide products that would satisfy the needs of each age group. Molycorp Financing The Production Of Rare Earth Minerals A pictures to establish a well-trained workforce which would help the business to grow


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


Business has a large range of products that it provides to its customers. Its items include food for babies, cereals, dairy items, snacks, chocolates, food for animal and mineral water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 workers. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the business has actually put down its objectives and objectives. These goals and objectives are listed below.
• One objective of the business is to reach absolutely no garbage dump status. It is pursuing no waste, where no waste of the factory is landfilled. It motivates its staff members to take the most out of the by-products. (Business, aboutus, 2017).
• Another objective of Molycorp Financing The Production Of Rare Earth Minerals A is to waste minimum food during production. Usually, the food produced is wasted even before it reaches the clients.
• Another thing that Business is dealing with is to improve its packaging in such a method that it would help it to lower the above-mentioned problems and would also ensure the shipment of high quality of its items to its consumers.
• Meet global standards of the environment.
• Construct a relationship based on trust with its customers, business partners, workers, 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 innovation. The nation is investing more on acquisitions and mergers to support its NHW method. The target of the business is not attained 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 Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business method is based upon the idea of Nutritious, Health and Health (NHW). This technique handles the idea to bringing modification in the customer choices about food and making the food things healthier worrying about the health problems.
The vision of this strategy is based upon the key technique i.e. 60/40+ which merely implies that the products will have a score of 60% on the basis of taste and 40% is based upon its nutritional value. The products will be manufactured with additional dietary value in contrast to all other products in market getting it a plus on its nutritional content.
This strategy was embraced to bring more tasty plus nutritious foods and drinks in market than ever. In competitors with other companies, with an objective of maintaining its trust over clients as Business Company has actually acquired more trusted by costumers.

Quantitative Analysis.

R&D Costs as a portion of sales are decreasing with increasing actual amount of spending reveals that the sales are increasing at a greater rate than its R&D costs, and enable the business to more invest in R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This indication likewise reveals 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 development rather than payment of debts. This increasing debt ratio posture a risk of default of Business to its financiers and might lead a declining share costs. For that reason, in regards to increasing debt ratio, the firm ought to not spend much on R&D and needs to pay its current debts to decrease the threat for financiers.
The increasing risk of investors with increasing financial obligation ratio and declining share costs can be observed by big 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 sluggish development also hinder company to further invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of computations and Graphs given up the Displays D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain numerous techniques based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business should present more innovative items by big amount of R&D Spending and mergers and acquisitions. It could increase the marketplace share of Business and increase the revenue margins for the business. It could also offer Business a long term competitive benefit over its rivals.
The global growth of Business need to be focused on market capturing of developing countries by growth, attracting more consumers through customer's loyalty. As establishing nations are more populous than developed countries, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMolycorp Financing The Production Of Rare Earth Minerals A needs to do careful acquisition and merger of companies, as it might affect the consumer's and society's understandings about Business. It needs to get and merge with those business which have a market track record of healthy and healthy companies. It would enhance the understandings of customers about Business.
Business must not only invest its R&D on innovation, rather than it ought to likewise concentrate on the R&D spending over evaluation of expense of various healthy products. This would increase expense effectiveness of its products, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business should transfer to not just developing however also to industrialized nations. It needs to widens its geographical growth. This large geographical expansion towards establishing and established nations would reduce the threat of possible losses in times of instability in various countries. It ought to widen its circle to various nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must get and merge with those nations having a goodwill of being a healthy company in the market. It would likewise enable the business to use its potential resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 aspects; age, gender, income and occupation. For instance, Business produces numerous products connected to children i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary products. Molycorp Financing The Production Of Rare Earth Minerals A products are quite affordable by practically all levels, but its significant targeted consumers, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in almost 86 nations. Its geographical segmentation is based upon two primary aspects i.e. average earnings level of the customer along with the environment of the region. Singapore Business Business's division 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 character and lifestyle of the customer. For example, Business 3 in 1 Coffee target those customers whose lifestyle is rather 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 knowledge and awareness of the consumer. Its highly nutritious items target those consumers who have a health mindful mindset towards their intakes.

Molycorp Financing The Production Of Rare Earth Minerals A Alternatives

In order to sustain the brand name in the market and keep the consumer intact with the brand, there are two choices:
Option: 1
The Company should invest more on acquisitions than on the R&D.
1. Acquisitions would increase total possessions of the company, increasing the wealth of the business. Spending on R&D would be sunk cost.
2. The company can resell the gotten units in the market, if it stops working to execute its technique. However, quantity invest in the R&D could not be restored, and it will be considered totally sunk expense, if it do not give possible results.
3. Spending on R&D provide slow growth in sales, as it takes very long time to introduce an item. However, acquisitions offer quick results, as it provide the business already established product, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the business to face mistaken belief of customers about Business core worths of healthy and nutritious products.
2 Large spending on acquisitions than R&D would send a signal of company's inadequacy of establishing innovative items, and would lead to customer's frustration as well.
3. Big acquisitions than R&D would extend the line of product of the company by the products which are already present in the market, making business not able to present brand-new ingenious items.
Option: 2.
The Business ought to invest more on its R&D instead of acquisitions.
1. It would make it possible for the company to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those products which can be used to a totally new market sector.
4. Ingenious items will offer long term benefits and high market share in long run.
1. It would decrease the earnings margins of the company.
2. In case of failure, the whole costs on R&D would be thought about 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 business, which could offer an unfavorable signal to the financiers, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to introduce brand-new innovative items with less danger of transforming the costs on R&D into sunk cost.
2. It would offer a positive signal to the investors, as the overall assets of the company would increase with its substantial 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 offer the company a strong long term market position in terms of the company's overall wealth as well as in terms of ingenious products.
1. Risk of conversion of R&D spending into sunk expense, greater than option 1 lesser than alternative 2.
2. Threat of misunderstanding about the acquisitions, greater than alternative 2 and lower than option 1.
3. Introduction of less number of innovative items than alternative 2 and high number of ingenious products than alternative 1.

Molycorp Financing The Production Of Rare Earth Minerals A Conclusion

RecommendationsIt has institutionalized its techniques and culture to align itself with the market modifications and customer behavior, which has actually eventually permitted it to sustain its market share. Business has actually established considerable market share and brand identity in the metropolitan markets, it is suggested that the business needs to focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by developing a particular brand name allotment strategy through trade marketing methods, that draw clear distinction between Molycorp Financing The Production Of Rare Earth Minerals A items and other rival products.

Molycorp Financing The Production Of Rare Earth Minerals A Exhibits

PESTEL Analysis
Governmental assistance

Changing criteria of international food.
Boosted market share. Changing understanding in the direction of healthier products Improvements in R&D and QA divisions.

Introduction of E-marketing.
No such impact as it is good. Worries over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 7000 Highest possible after Service with much less development than Organisation 8th Lowest
R&D Spending Greatest considering that 2001 Highest possible after Organisation 5th Lowest
Net Profit Margin Greatest since 2004 with fast development from 2002 to 2012 Due to sale of Alcon in 2013. Practically equal to Kraft Foods Incorporation Practically equal to Unilever N/A
Competitive Advantage Food with Nourishment and also health and wellness variable Highest variety of brands with sustainable practices Biggest confectionary and also processed foods brand name in the world Largest milk products as well as bottled water brand worldwide
Segmentation Middle as well as top middle degree customers worldwide Private clients together with family group Any age and Income Client Groups Middle as well as top middle degree consumers worldwide
Number of Brands 2nd 4th 5th 5th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 67356 453618 793392 686779 892663
Net Profit Margin 1.61% 5.64% 14.25% 9.41% 42.98%
EPS (Earning Per Share) 63.93 3.69 9.13 4.18 21.42
Total Asset 473949 348472 132393 217193 65349
Total Debt 74864 52145 12818 24674 45668
Debt Ratio 72% 44% 52% 66% 54%
R&D Spending 2669 2798 5427 6345 8242
R&D Spending as % of Sales 9.58% 1.63% 3.95% 3.58% 7.57%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations