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New Songdo City Chinese Version Case Study Analysis

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New Songdo City Chinese Version Case Study Analysis

New Songdo City Chinese Version is presently among the biggest food cycle worldwide. It was established by Harvard in 1866, a German Pharmacist who first introduced "FarineLactee"; a mix of flour and milk to feed infants and reduce death rate. At the same time, the Page brothers from Switzerland likewise found The Anglo-Swiss Condensed Milk Company. The 2 ended up being competitors at first however later merged in 1905, resulting in the birth of New Songdo City Chinese Version.
Business is now a transnational company. Unlike other international business, it has senior executives from different countries and attempts to make decisions considering the entire world. New Songdo City Chinese Version currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The function of New Songdo City Chinese Version Corporation is to improve the quality of life of individuals by playing its part and providing healthy food. It wants to help the world in forming a healthy and better future for it. It likewise wants to encourage individuals to live a healthy life. While making sure 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

New Songdo City Chinese Version's vision is to supply its consumers with food that is healthy, high in quality and safe to eat. It wants to be ingenious and at the same time comprehend the needs and requirements of its clients. Its vision is to grow fast and supply items that would please the requirements of each age. New Songdo City Chinese Version visualizes to develop a well-trained workforce which would help the company to grow
.

Mission

New Songdo City Chinese Version's objective is that as currently, it is the leading business in the food industry, it thinks in 'Good Food, Good Life". Its mission is to supply its consumers with a range of choices that are healthy and finest in taste. It is concentrated on offering the best food to its customers throughout the day and night.

Products.

Business has a wide variety of items that it offers to its consumers. Its items include food for infants, cereals, dairy products, snacks, chocolates, food for family pet and mineral water. It has around 4 hundred and fifty (450) factories around the globe and around 328,000 employees. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Remembering the vision and mission of the corporation, the company has actually laid down its goals and goals. These objectives and objectives are noted below.
• One goal of the company is to reach no landfill status. It is working toward zero waste, where no waste of the factory is landfilled. It encourages its workers to take the most out of the by-products. (Business, aboutus, 2017).
• Another objective of New Songdo City Chinese Version is to lose minimum food during production. Most often, the food produced is wasted even before it reaches the consumers.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to decrease those complications and would likewise ensure the delivery of high quality of its items to its clients.
• Meet worldwide requirements of the environment.
• Build a relationship based on trust with its consumers, organisation partners, workers, and government.

Critical Issues

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

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based upon the idea of Nutritious, Health and Health (NHW). This technique handles the idea to bringing change in the client preferences about food and making the food things much healthier worrying about the health concerns.
The vision of this method is based upon the key method 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 upon its nutritional worth. The items will be produced with extra dietary worth in contrast to all other products in market getting it a plus on its nutritional material.
This technique was adopted to bring more yummy plus healthy foods and beverages in market than ever. In competition with other business, with an intent of keeping its trust over customers as Business Business has acquired more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing actual quantity of costs reveals that the sales are increasing at a greater rate than its R&D spending, and permit the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This indicator also shows a thumbs-up to the R&D costs, mergers and acquisitions.
Debt ratio of the company is increasing due to its spending on mergers, acquisitions and R&D advancement instead of payment of financial obligations. This increasing financial obligation ratio present a danger of default of Business to its investors and might lead a decreasing share prices. In terms of increasing debt ratio, the company ought to not invest much on R&D and should pay its existing financial obligations to reduce the threat for financiers.
The increasing risk of investors with increasing financial obligation ratio and declining share prices can be observed by substantial decrease of EPS of New Songdo City Chinese Version stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow perception building of customers. This sluggish growth likewise impede business to further spend on 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 Exhibits D and E.

TWOS Analysis


TWOS analysis can be utilized to derive numerous strategies based upon the SWOT Analysis provided 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 big amount of R&D Spending and mergers and acquisitions. It might increase the marketplace share of Business and increase the earnings margins for the company. It could likewise supply Business a long term competitive benefit over its rivals.
The global expansion of Business should be concentrated on market capturing of establishing countries by growth, drawing in more customers through client'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 AnalysisNew Songdo City Chinese Version ought to do cautious acquisition and merger of companies, as it might affect the client's and society's understandings about Business. It must obtain and merge with those business which have a market track record of healthy and nutritious companies. It would improve the perceptions of customers about Business.
Business ought to not only invest its R&D on development, rather than it must also concentrate on the R&D costs over examination of expense of different healthy products. This would increase expense effectiveness of its products, which will lead to increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not just establishing but also to industrialized countries. It needs to expands its geographical growth. This wide geographical growth towards establishing and established nations would decrease the danger of potential losses in times of instability in numerous countries. It ought to expand its circle to various nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine with those nations having a goodwill of being a healthy business in the market. It would also enable the business to use its potential resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based upon four aspects; age, gender, earnings and occupation. For example, Business produces several products associated with children i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary products. New Songdo City Chinese Version products are rather inexpensive by nearly all levels, however its major targeted customers, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is composed of its presence in almost 86 countries. Its geographical segmentation is based upon two primary aspects i.e. typical income level of the customer in addition to the environment of the region. For instance, Singapore Business Company'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. For instance, Business 3 in 1 Coffee target those clients whose life style is quite busy and don't have much time.

Behavioral Segmentation

New Songdo City Chinese Version behavioral segmentation is based upon the mindset knowledge and awareness of the client. Its extremely healthy products target those consumers who have a health mindful attitude towards their intakes.

New Songdo City Chinese Version Alternatives

In order to sustain the brand name in the market and keep the consumer undamaged with the brand, there are two choices:
Alternative: 1
The Company must spend 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 company can resell the obtained units in the market, if it fails to implement its strategy. However, quantity invest in the R&D might not be revived, and it will be considered completely sunk expense, if it do not offer prospective outcomes.
3. Spending on R&D offer slow development in sales, as it takes very long time to present an item. Acquisitions provide quick outcomes, as it offer the company currently developed product, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the business to face misconception of customers about Business core values of healthy and nutritious products.
2 Large spending on acquisitions than R&D would send out a signal of business's ineffectiveness of developing innovative items, and would results in customer's dissatisfaction.
3. Big acquisitions than R&D would extend the product line of the business by the products which are already present in the market, making company not able to introduce new ingenious items.
Alternative: 2.
The Business ought to spend more on its R&D rather than acquisitions.
Pros:
1. It would make it possible for the company to produce more ingenious items.
2. It would offer the business a strong competitive position in the market.
3. It would enable the business to increase its targeted customers by introducing those items which can be provided to an entirely new market section.
4. Ingenious items will offer long term benefits and high market share in long term.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the whole spending on R&D would be thought about as sunk expense, and would affect the company at big. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could provide a negative signal to the financiers, and could result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to present new ingenious products with less risk of converting the spending on R&D into sunk cost.
2. It would provide a positive signal to the financiers, as the general assets of the company would increase with its considerable R&D costs.
3. It would not affect the earnings 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 regards to the business's general wealth in addition to 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 misconception about the acquisitions, greater than alternative 2 and lower than option 1.
3. Intro of less variety of ingenious products than alternative 2 and high number of innovative products than alternative 1.

New Songdo City Chinese Version Conclusion

RecommendationsIt has institutionalised its techniques and culture to align itself with the market modifications and consumer habits, which has actually eventually allowed it to sustain its market share. Business has established significant market share and brand identity in the urban markets, it is recommended that the company needs to focus on the rural locations in terms of establishing brand name commitment, awareness, and equity, such can be done by developing a specific brand allowance method through trade marketing tactics, that draw clear distinction in between New Songdo City Chinese Version items and other competitor items.

New Songdo City Chinese Version Exhibits

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

Transforming standards of international food.
Boosted market share.
Transforming assumption in the direction of healthier products
Improvements in R&D and QA divisions.

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

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 4000
Highest after Service with much less development than Company 4th Lowest
R&D Spending Greatest since 2007 Highest possible after Business 3rd Most affordable
Net Profit Margin Highest considering that 2004 with fast growth from 2004 to 2012 As a result of sale of Alcon in 2014. Virtually equal to Kraft Foods Consolidation Almost equal to Unilever N/A
Competitive Advantage Food with Nourishment and health and wellness factor Highest possible number of brands with lasting techniques Biggest confectionary as well as refined foods brand name on the planet Largest dairy items and also bottled water brand worldwide
Segmentation Middle and also upper middle level customers worldwide Individual consumers along with household team Any age as well as Income Client Groups Center as well as upper center degree customers worldwide
Number of Brands 3rd 6th 6th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 28514 632588 858873 111131 448652
Net Profit Margin 5.84% 5.17% 88.67% 6.62% 45.74%
EPS (Earning Per Share) 51.25 9.78 9.97 8.81 84.43
Total Asset 398317 364615 775393 839593 31296
Total Debt 83459 84975 62934 36354 19853
Debt Ratio 99% 75% 75% 65% 46%
R&D Spending 4882 3823 1269 9382 9629
R&D Spending as % of Sales 3.26% 8.88% 9.21% 5.59% 5.25%

New Songdo City Chinese Version Executive Summary New Songdo City Chinese Version Swot Analysis New Songdo City Chinese Version Vrio Analysis New Songdo City Chinese Version Pestel Analysis
New Songdo City Chinese Version Porters Analysis New Songdo City Chinese Version Recommendations