Menu

Saito Solar Discounted Cash Flow Valuation Case Study Help

Case Study Solution And Analysis


Home >> Harvard >> Saito Solar Discounted Cash Flow Valuation >>

Saito Solar Discounted Cash Flow Valuation Case Study Solution

Business is currently one of the greatest food chains worldwide. It was established by Henri Saito Solar Discounted Cash Flow Valuation in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed infants and reduce death rate.
Business is now a multinational company. Unlike other international business, it has senior executives from various nations and attempts to make choices considering the whole world. Saito Solar Discounted Cash Flow Valuation presently has more than 500 factories worldwide and a network spread across 86 countries.

Purpose

The function of Saito Solar Discounted Cash Flow Valuation Corporation is to improve the quality of life of people by playing its part and providing healthy food. It wants to help the world in forming a healthy and much 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 better and healthy future

Vision

Saito Solar Discounted Cash Flow Valuation's vision is to supply its clients with food that is healthy, high in quality and safe to consume. It wishes to be innovative and simultaneously comprehend the needs and requirements of its customers. Its vision is to grow quickly and offer items that would satisfy the needs of each age group. Saito Solar Discounted Cash Flow Valuation envisions to establish a trained workforce which would help the company to grow
.

Mission

Saito Solar Discounted Cash Flow Valuation's objective is that as currently, it is the leading company in the food market, it thinks in 'Great Food, Excellent Life". Its mission is to provide its consumers with a variety of options that are healthy and best in taste also. It is focused on offering the very best food to its consumers throughout the day and night.

Products.

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

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has actually laid down its goals and goals. These goals and objectives are listed below.
• One objective of the company is to reach no landfill status. (Business, aboutus, 2017).
• Another goal of Saito Solar Discounted Cash Flow Valuation is to waste minimum food throughout production. Most often, the food produced is squandered even prior to 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 lower those issues and would also guarantee the shipment of high quality of its items to its customers.
• Meet global requirements of the environment.
• Develop a relationship based on trust with its consumers, business partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the technique of NHW and investing more of its revenues 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 expected to grow greater 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 current Business strategy is based on the idea of Nutritious, Health and Wellness (NHW). This method deals with the concept to bringing modification in the customer choices about food and making the food stuff much healthier concerning about the health concerns.
The vision of this method is based upon the secret method i.e. 60/40+ which simply suggests that the items will have a score of 60% on the basis of taste and 40% is based on its nutritional worth. The items will be manufactured with additional nutritional worth in contrast to all other items in market acquiring it a plus on its nutritional content.
This strategy was embraced to bring more tasty plus healthy foods and beverages in market than ever. In competition with other companies, with an intention of retaining its trust over customers as Business Company has actually gotten more trusted by clients.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing real amount of costs reveals 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 percentage of sales is decreasing. This sign likewise reveals a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of debts. This increasing debt ratio posture a threat of default of Business to its investors and might lead a declining share rates. In terms of increasing debt ratio, the firm ought to not invest much on R&D and should pay its existing debts to reduce the danger for financiers.
The increasing danger of investors with increasing debt ratio and decreasing share rates can be observed by substantial decline of EPS of Saito Solar Discounted Cash Flow Valuation 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 growth likewise hinder company to additional 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 Charts given up the Displays D and E.

TWOS Analysis


2 analysis can be used to obtain different strategies based upon the SWOT Analysis given above. A short summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business should present more innovative items by large quantity of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the business. It could likewise supply Business a long term competitive benefit over its rivals.
The international growth of Business need to be concentrated on market catching of establishing nations by growth, bring in more clients through client's loyalty. As establishing nations are more populated than industrialized countries, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisSaito Solar Discounted Cash Flow Valuation needs to do careful acquisition and merger of companies, as it could affect the client's and society's perceptions about Business. It ought to get and combine with those business which have a market credibility of healthy and healthy companies. It would improve the perceptions of customers about Business.
Business must not only invest its R&D on innovation, rather than it needs to likewise concentrate on the R&D spending over assessment of cost of different healthy products. This would increase cost effectiveness of its products, which will result in increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing however likewise to developed nations. It must expands its geographical growth. This broad geographical growth towards developing and developed nations would lower the risk of possible losses in times of instability in various nations. It needs to expand its circle to various countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It should get and combine with those countries having a goodwill of being a healthy business in the market. It would likewise enable the company to utilize its prospective resources effectively on its other operations rather than acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based on 4 aspects; age, gender, income and profession. For instance, Business produces numerous items related to babies i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Saito Solar Discounted Cash Flow Valuation items are rather budget friendly by almost all levels, however its major targeted clients, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is made up of its existence in almost 86 countries. Its geographical segmentation is based upon 2 main factors i.e. average income level of the customer as well as the climate of the region. Singapore Business Business's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and lifestyle of the consumer. For example, Business 3 in 1 Coffee target those clients whose lifestyle is quite busy and don't have much time.

Behavioral Segmentation

Saito Solar Discounted Cash Flow Valuation behavioral division is based upon the mindset understanding and awareness of the customer. Its highly nutritious items target those consumers who have a health mindful mindset towards their consumptions.

Saito Solar Discounted Cash Flow Valuation Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand, there are 2 choices:
Option: 1
The Business should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall properties of the company, increasing the wealth of the business. However, spending on R&D would be sunk expense.
2. The company can resell the obtained systems in the market, if it fails to execute its method. Amount invest on the R&D could not be restored, and it will be considered totally sunk expense, if it do not provide potential outcomes.
3. Investing in R&D provide sluggish development in sales, as it takes long time to present a product. Nevertheless, acquisitions supply quick outcomes, as it provide the company already developed product, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the company to deal with misconception of customers about Business core values of healthy and healthy items.
2 Big spending on acquisitions than R&D would send a signal of business's inefficiency of establishing ingenious products, and would results in consumer's frustration too.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are already present in the market, making business unable to introduce new ingenious items.
Option: 2.
The Company must spend more on its R&D instead of acquisitions.
Pros:
1. It would allow the business to produce more ingenious products.
2. It would offer the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted consumers by introducing those items which can be provided to a totally new market section.
4. Ingenious items will supply long term advantages and high market share in long run.
Cons:
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 cost, and would affect the company at large. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which could supply a negative signal to the financiers, and could result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce brand-new innovative items with less risk of transforming the spending on R&D into sunk expense.
2. It would provide a positive signal to the financiers, as the total possessions of the company would increase with its substantial R&D costs.
3. It would not impact the revenue 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 regards to the company's total wealth in addition to in regards to ingenious products.
Cons:
1. Threat of conversion of R&D spending into sunk cost, higher than option 1 lower than alternative 2.
2. Danger of misconception about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Introduction of less number of ingenious items than alternative 2 and high variety of innovative items than alternative 1.

Saito Solar Discounted Cash Flow Valuation Conclusion

RecommendationsBusiness has remained the top market player for more than a decade. It has actually institutionalized its techniques and culture to align itself with the market modifications and consumer habits, which has eventually enabled it to sustain its market share. Though, Business has actually developed considerable market share and brand identity in the city markets, it is advised that the company needs to concentrate on the backwoods in terms of developing brand name commitment, awareness, and equity, such can be done by developing a specific brand name allowance strategy through trade marketing tactics, that draw clear distinction in between Saito Solar Discounted Cash Flow Valuation items and other competitor items. Furthermore, Business ought to take advantage of its brand 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 allow the company to develop brand equity for recently introduced and currently produced products on a higher platform, making the effective use of resources and brand name image in the market.

Saito Solar Discounted Cash Flow Valuation Exhibits

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

Altering requirements of worldwide food.
Enhanced market share.
Changing understanding towards healthier products
Improvements in R&D as well as QA divisions.

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

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 9000
Highest possible after Company with less development than Service 4th Least expensive
R&D Spending Highest because 2004 Highest after Business 3rd Lowest
Net Profit Margin Highest considering that 2003 with fast growth from 2006 to 2015 Because of sale of Alcon in 2014. Nearly equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition and also wellness element Highest number of brand names with lasting techniques Largest confectionary as well as refined foods brand name on the planet Largest milk products and also bottled water brand name on the planet
Segmentation Middle as well as top center degree consumers worldwide Individual consumers along with house group Any age as well as Revenue Customer Teams Middle and top middle level consumers worldwide
Number of Brands 2nd 6th 3rd 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 16734 461186 155936 379725 497468
Net Profit Margin 6.95% 2.43% 21.68% 5.14% 17.59%
EPS (Earning Per Share) 44.35 2.93 5.12 5.35 69.95
Total Asset 776311 719672 919978 297722 22834
Total Debt 97819 46864 89214 44962 14695
Debt Ratio 78% 73% 49% 28% 37%
R&D Spending 6557 2319 6684 9961 5314
R&D Spending as % of Sales 3.16% 5.44% 8.76% 1.28% 4.12%

Saito Solar Discounted Cash Flow Valuation Executive Summary Saito Solar Discounted Cash Flow Valuation Swot Analysis Saito Solar Discounted Cash Flow Valuation Vrio Analysis Saito Solar Discounted Cash Flow Valuation Pestel Analysis
Saito Solar Discounted Cash Flow Valuation Porters Analysis Saito Solar Discounted Cash Flow Valuation Recommendations