Stanford University Implementing Fasb Statements 116 And 117 Case Study Solution

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Stanford University Implementing Fasb Statements 116 And 117 Case Study Solution

Business is presently one of the biggest food chains worldwide. It was founded by Henri Stanford University Implementing Fasb Statements 116 And 117 in 1866, a German Pharmacist who first released "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 tries to make choices thinking about the whole world. Stanford University Implementing Fasb Statements 116 And 117 presently has more than 500 factories worldwide and a network spread across 86 nations.


The purpose of Business Corporation is to enhance the quality of life of individuals by playing its part and providing 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


Stanford University Implementing Fasb Statements 116 And 117's vision is to offer its consumers with food that is healthy, high in quality and safe to eat. It wants to be innovative and simultaneously understand the needs and requirements of its consumers. Its vision is to grow quick and provide products that would satisfy the needs of each age. Stanford University Implementing Fasb Statements 116 And 117 visualizes to establish a well-trained labor force which would help the business to grow


Stanford University Implementing Fasb Statements 116 And 117's objective is that as presently, it is the leading company in the food industry, it believes in 'Great Food, Excellent Life". Its mission is to provide its consumers with a variety of choices that are healthy and finest in taste too. It is focused on supplying the best food to its consumers throughout the day and night.


Stanford University Implementing Fasb Statements 116 And 117 has a wide variety of items that it provides to its consumers. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has actually put down its objectives and objectives. These objectives and objectives are listed below.
• One objective of the business is to reach absolutely no land fill status. It is working toward absolutely 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 Stanford University Implementing Fasb Statements 116 And 117 is to lose minimum food during production. Most often, the food produced is wasted even before it reaches the customers.
• Another thing that Business is working on is to improve its product packaging in such a way that it would help it to decrease the above-mentioned issues and would likewise ensure the shipment of high quality of its items to its customers.
• Meet international standards of the environment.
• Develop a relationship based on trust with its consumers, business partners, workers, and federal government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its profits on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW technique. 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%, provided in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

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

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing actual amount of spending shows that the sales are increasing at a greater rate than its R&D spending, and enable the company to more invest in R&D.
Net Profit 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.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing debt ratio posture a hazard of default of Business to its financiers and might lead a declining share rates. In terms of increasing financial obligation ratio, the firm ought to not invest much on R&D and must pay its existing debts to reduce the danger for financiers.
The increasing risk of financiers with increasing financial obligation ratio and decreasing share costs can be observed by huge decline of EPS of Stanford University Implementing Fasb Statements 116 And 117 stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish growth also impede 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 Charts given in the Displays D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain numerous strategies based on the SWOT Analysis given above. A short summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business ought to present more innovative items by big amount of R&D Costs and mergers and acquisitions. It might increase the marketplace share of Business and increase the earnings margins for the business. It could likewise offer Business a long term competitive advantage over its rivals.
The worldwide growth of Business should be focused on market recording of developing countries by expansion, drawing in more clients through consumer's commitment. As establishing nations are more populous than developed countries, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisStanford University Implementing Fasb Statements 116 And 117 must do mindful acquisition and merger of companies, as it might affect the customer's and society's understandings about Business. It should get and merge with those companies which have a market track record of healthy and nutritious companies. It would enhance the understandings of consumers about Business.
Business must not just spend its R&D on innovation, rather than it must likewise concentrate on the R&D costs over evaluation of cost of numerous healthy items. This would increase cost efficiency of its products, which will result in increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

Business should move to not only developing however likewise to developed nations. It ought to widen its circle to numerous nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Stanford University Implementing Fasb Statements 116 And 117 should carefully manage its acquisitions to prevent the threat of misconception from the customers about Business. It needs to get and merge with those countries having a goodwill of being a healthy company in the market. This would not just improve the understanding of customers about Business however would also increase the sales, profit margins and market share of Business. It would likewise make it possible for the business to use its possible resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon four elements; age, gender, earnings and occupation. Business produces several products related to babies i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary items. Stanford University Implementing Fasb Statements 116 And 117 items are quite inexpensive by nearly all levels, however its significant targeted consumers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its presence in almost 86 nations. Its geographical division is based upon two main factors i.e. typical earnings level of the consumer as well as the environment of the area. Singapore Business Business's division 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 character and life style of the customer. Business 3 in 1 Coffee target those customers whose life style is rather busy and do not have much time.

Behavioral Segmentation

Stanford University Implementing Fasb Statements 116 And 117 behavioral segmentation is based upon the mindset knowledge and awareness of the customer. Its extremely nutritious items target those customers who have a health conscious attitude towards their usages.

Stanford University Implementing Fasb Statements 116 And 117 Alternatives

In order to sustain the brand name in the market and keep the client intact with the brand, there are two options:
Option: 1
The Business must invest more on acquisitions than on the R&D.
1. Acquisitions would increase total properties of the business, increasing the wealth of the business. Costs on R&D would be sunk expense.
2. The company can resell the obtained units in the market, if it stops working to implement its strategy. Quantity spend on the R&D might not be restored, and it will be considered completely sunk cost, if it do not offer potential results.
3. Spending on R&D provide sluggish growth in sales, as it takes very long time to present an item. Acquisitions supply fast outcomes, as it provide the company already developed product, which can be marketed quickly after the acquisition.
1. Acquisition of company'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 worths of healthy and healthy products.
2 Large spending on acquisitions than R&D would send out a signal of business's inadequacy of developing innovative items, and would results in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the line of product of the business by the products which are currently present in the market, making business unable to introduce new ingenious items.
Option: 2.
The Company needs to invest more on its R&D rather than acquisitions.
1. It would make it possible for the business to produce more ingenious items.
2. It would supply the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted customers by introducing those items which can be used to a totally new market section.
4. Innovative items will provide long term benefits and high market share in long run.
1. It would reduce the revenue margins of the company.
2. In case of failure, the entire costs on R&D would be considered as sunk expense, and would affect the company at large. The threat is not in the case of acquisitions.
3. It would not increase the wealth of company, which might supply a negative signal to the investors, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to introduce new innovative items with less risk of transforming the costs on R&D into sunk cost.
2. It would provide a positive signal to the investors, as the general assets of the company would increase with its substantial R&D costs.
3. It would not impact the earnings margins of the business at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the business's total wealth in addition to in terms of ingenious items.
1. Risk of conversion of R&D costs into sunk cost, higher than option 1 lesser than alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Introduction of less number of innovative products than alternative 2 and high number of innovative items than alternative 1.

Stanford University Implementing Fasb Statements 116 And 117 Conclusion

RecommendationsIt has institutionalized its techniques and culture to align itself with the market modifications and consumer behavior, which has actually ultimately allowed it to sustain its market share. Business has established substantial market share and brand identity in the metropolitan markets, it is advised that the business needs to focus on the rural locations in terms of establishing brand name commitment, awareness, and equity, such can be done by creating a particular brand name allowance technique through trade marketing strategies, that draw clear distinction in between Stanford University Implementing Fasb Statements 116 And 117 products and other competitor products.

Stanford University Implementing Fasb Statements 116 And 117 Exhibits

PESTEL Analysis
Governmental support

Transforming standards of global food.
Boosted market share. Altering understanding in the direction of healthier items Improvements in R&D and also QA departments.

Intro of E-marketing.
No such influence as it is beneficial. Problems over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest considering that 7000 Highest possible after Company with much less growth than Organisation 1st Least expensive
R&D Spending Highest considering that 2008 Highest possible after Company 8th Cheapest
Net Profit Margin Highest possible because 2003 with quick development from 2004 to 2017 As a result of sale of Alcon in 2018. Practically equal to Kraft Foods Unification Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health and wellness element Highest number of brands with lasting methods Biggest confectionary as well as refined foods brand name in the world Largest dairy products and also bottled water brand name in the world
Segmentation Middle as well as upper center level customers worldwide Specific customers along with family team Any age and also Revenue Consumer Teams Middle and also top center degree consumers worldwide
Number of Brands 5th 8th 7th 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 81411 958668 765158 663488 992211
Net Profit Margin 2.36% 3.75% 17.75% 9.67% 18.87%
EPS (Earning Per Share) 82.41 1.62 8.86 5.54 58.96
Total Asset 947734 425145 496946 574949 76123
Total Debt 59913 84313 12385 55681 15383
Debt Ratio 69% 77% 48% 54% 25%
R&D Spending 4872 5465 2195 6579 2754
R&D Spending as % of Sales 4.82% 4.67% 7.67% 4.47% 4.51%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations