Molycorp Morgan Brothers Reverse Convertible Notes C Case Study Analysis

Case Study Solution And Analysis

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Molycorp Morgan Brothers Reverse Convertible Notes C Case Study Analysis

Business is presently one of the biggest food chains worldwide. It was established by Henri Molycorp Morgan Brothers Reverse Convertible Notes C in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed infants and decrease mortality rate.
Business is now a multinational business. Unlike other multinational business, it has senior executives from different nations and attempts to make decisions considering the entire world. Molycorp Morgan Brothers Reverse Convertible Notes C currently has more than 500 factories worldwide and a network spread across 86 countries.


The purpose of Molycorp Morgan Brothers Reverse Convertible Notes C Corporation is to enhance the lifestyle of people by playing its part and providing healthy food. It wishes to help the world in forming a healthy and much better future for it. It likewise wishes to encourage people to live a healthy life. While ensuring that the business is succeeding in the long run, that's how it plays its part for a better and healthy future


Molycorp Morgan Brothers Reverse Convertible Notes C's vision is to offer its clients with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and simultaneously comprehend the requirements and requirements of its customers. Its vision is to grow quick and provide items that would please the needs of each age group. Molycorp Morgan Brothers Reverse Convertible Notes C visualizes to develop a trained labor force which would help the business to grow


Molycorp Morgan Brothers Reverse Convertible Notes C's mission is that as presently, it is the leading company in the food market, it thinks in 'Excellent Food, Great Life". Its objective is to provide its customers with a range of options that are healthy and finest in taste too. It is focused on supplying the very best food to its clients throughout the day and night.


Molycorp Morgan Brothers Reverse Convertible Notes C has a wide variety of products that it uses to its customers. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the company has actually laid down its goals and objectives. These goals and goals are listed below.
• One objective of the business is to reach zero land fill status. It is pursuing absolutely no waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Molycorp Morgan Brothers Reverse Convertible Notes C is to waste minimum food during production. Most often, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is dealing with is to improve its packaging in such a method that it would help it to reduce the above-mentioned issues and would also ensure the delivery of high quality of its items to its consumers.
• Meet worldwide standards of the environment.
• Construct a relationship based on trust with its customers, business partners, staff members, and government.

Critical Issues

Recently, Business Business is focusing more towards the strategy of NHW and investing more of its revenues on the R&D innovation. The nation is investing more on acquisitions and mergers to support its NHW method. The target of the company is not achieved 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. There is a requirement to focus more on the sales then the development technology. Otherwise, it might lead to the decreased earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based upon the principle of Nutritious, Health and Health (NHW). This strategy handles the concept to bringing modification in the consumer choices about food and making the food stuff much healthier concerning about the health concerns.
The vision of this strategy is based on the key technique i.e. 60/40+ which simply implies that the products will have a score of 60% on the basis of taste and 40% is based on its dietary value. The items will be produced with additional dietary worth in contrast to all other products in market getting it a plus on its dietary content.
This technique was embraced to bring more yummy plus healthy foods and beverages in market than ever. In competition with other companies, with an objective of retaining its trust over customers as Business Company has gained more relied on by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual amount of costs shows that the sales are increasing at a greater rate than its R&D costs, and allow the company to more invest in R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is decreasing. This indication likewise shows a green light 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 present a danger of default of Business to its investors and could lead a declining share rates. For that reason, in regards to increasing debt ratio, the firm needs to not invest much on R&D and should pay its present debts to decrease the risk for financiers.
The increasing danger of financiers with increasing financial obligation ratio and decreasing share prices can be observed by huge decline of EPS of Molycorp Morgan Brothers Reverse Convertible Notes C stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow understanding building of customers. This sluggish growth also impede company to more 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 used to obtain various methods based upon the SWOT Analysis offered above. A quick summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business must present more innovative products by large quantity of R&D Spending and mergers and acquisitions. It could increase the marketplace share of Business and increase the earnings margins for the business. It might likewise supply Business a long term competitive benefit over its rivals.
The international expansion of Business should be focused on market capturing of developing countries by expansion, attracting more customers through consumer's commitment. As establishing nations are more populated than industrialized nations, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMolycorp Morgan Brothers Reverse Convertible Notes C must do mindful acquisition and merger of companies, as it might impact the client's and society's perceptions about Business. It ought to get and merge with those companies which have a market track record of healthy and healthy business. It would improve the perceptions of customers about Business.
Business needs to not only spend its R&D on innovation, rather than it needs to likewise concentrate on the R&D costs over evaluation of cost of different healthy products. This would increase cost effectiveness of its products, which will result in increasing its sales, due to declining costs, 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 growth towards developing and developed countries would lower the risk of prospective losses in times of instability in different nations. It needs to broaden its circle to numerous nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Molycorp Morgan Brothers Reverse Convertible Notes C needs to sensibly control its acquisitions to prevent the risk of misconception from the consumers about Business. It must acquire and merge with those nations having a goodwill of being a healthy business in the market. This would not just improve the understanding of consumers about Business however would also increase the sales, earnings margins and market share of Business. It would likewise enable the company to use its potential resources effectively on its other operations instead of acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on 4 elements; age, gender, income and profession. For example, Business produces several items associated with infants i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary products. Molycorp Morgan Brothers Reverse Convertible Notes C items are quite cost effective by almost all levels, however its major targeted clients, in terms of income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its existence in practically 86 countries. Its geographical division is based upon 2 main aspects i.e. average earnings level of the customer in addition to the environment of the area. Singapore Business Business's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and life style of the consumer. Business 3 in 1 Coffee target those consumers whose life style is quite hectic and do not have much time.

Behavioral Segmentation

Molycorp Morgan Brothers Reverse Convertible Notes C behavioral division is based upon the mindset knowledge and awareness of the client. For example its highly nutritious products target those clients who have a health conscious mindset towards their intakes.

Molycorp Morgan Brothers Reverse Convertible Notes C Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand, there are two options:
Option: 1
The Business should invest more on acquisitions than on the R&D.
1. Acquisitions would increase total properties of the business, increasing the wealth of the business. Nevertheless, costs on R&D would be sunk cost.
2. The company can resell the obtained systems in the market, if it fails to execute its technique. Quantity invest on the R&D could not be restored, and it will be thought about totally sunk cost, if it do not give possible outcomes.
3. Investing in R&D provide slow development in sales, as it takes very long time to present an item. Acquisitions offer quick outcomes, as it provide the business already developed item, which can be marketed quickly after the acquisition.
1. Acquisition of company's which do not fit with the company's values like Kraftz foods can lead the business to face misconception of customers about Business core values of healthy and nutritious items.
2 Big costs on acquisitions than R&D would send out a signal of company's inadequacy of developing innovative products, and would lead to consumer's discontentment too.
3. Big acquisitions than R&D would extend the product line of the business by the items which are currently present in the market, making business not able to introduce new ingenious items.
Alternative: 2.
The Company should spend more on its R&D rather than acquisitions.
1. It would enable the company to produce more ingenious products.
2. It would supply the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted consumers by presenting those products which can be offered to a completely new market segment.
4. Ingenious products will supply long term benefits and high market share in long term.
1. It would reduce the earnings margins of the business.
2. In case of failure, the whole spending on R&D would be thought about as sunk cost, and would affect the business at big. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might supply a negative signal to the financiers, and might result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to introduce brand-new innovative items with less risk of converting the costs on R&D into sunk cost.
2. It would supply a favorable signal to the investors, as the general assets of the company would increase with its substantial R&D costs.
3. It would not affect the earnings margins of the company 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 business's overall wealth along with in regards to innovative items.
1. Risk of conversion of R&D costs into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less number of ingenious products than alternative 2 and high number of innovative items than alternative 1.

Molycorp Morgan Brothers Reverse Convertible Notes C Conclusion

RecommendationsBusiness has stayed the top market gamer for more than a decade. It has actually institutionalised its strategies and culture to align itself with the marketplace changes and customer behavior, which has ultimately allowed it to sustain its market share. Though, Business has developed considerable market share and brand name identity in the city markets, it is suggested that the company must focus on the backwoods in terms of developing brand name commitment, awareness, and equity, such can be done by developing a specific brand allotment technique through trade marketing methods, that draw clear difference between Molycorp Morgan Brothers Reverse Convertible Notes C products and other competitor items. Molycorp Morgan Brothers Reverse Convertible Notes C must take advantage of its brand name image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will enable the business to develop brand name equity for recently introduced and already produced items on a higher platform, making the efficient usage of resources and brand image in the market.

Molycorp Morgan Brothers Reverse Convertible Notes C Exhibits

PESTEL Analysis
Governmental assistance

Transforming requirements of international food.
Enhanced market share.
Transforming understanding in the direction of healthier items
Improvements in R&D as well as QA departments.

Introduction of E-marketing.
No such effect as it is beneficial.
Worries over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest because 6000
Highest after Service with much less development than Business 2nd Cheapest
R&D Spending Highest possible since 2006 Highest after Service 3rd Least expensive
Net Profit Margin Highest since 2005 with fast growth from 2003 to 2019 Due to sale of Alcon in 2018. Virtually equal to Kraft Foods Consolidation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition and health and wellness aspect Highest possible variety of brand names with lasting techniques Biggest confectionary and refined foods brand name on the planet Biggest dairy items as well as mineral water brand name in the world
Segmentation Middle and also upper center level customers worldwide Specific clients in addition to house team Every age as well as Revenue Customer Teams Center and also top middle degree customers worldwide
Number of Brands 8th 2nd 7th 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 96521 182737 265753 762338 226977
Net Profit Margin 8.74% 5.92% 42.86% 9.58% 65.21%
EPS (Earning Per Share) 65.36 3.17 9.63 2.74 56.97
Total Asset 928529 173865 185266 886478 31525
Total Debt 56764 12818 11222 11388 46119
Debt Ratio 11% 28% 61% 23% 11%
R&D Spending 3945 9696 1988 5638 3637
R&D Spending as % of Sales 6.22% 5.46% 7.36% 4.44% 2.69%

Molycorp Morgan Brothers Reverse Convertible Notes C Executive Summary Molycorp Morgan Brothers Reverse Convertible Notes C Swot Analysis Molycorp Morgan Brothers Reverse Convertible Notes C Vrio Analysis Molycorp Morgan Brothers Reverse Convertible Notes C Pestel Analysis
Molycorp Morgan Brothers Reverse Convertible Notes C Porters Analysis Molycorp Morgan Brothers Reverse Convertible Notes C Recommendations