Stanford University Implementing Fasb Statements 116 And 117 Case Study Analysis

Case Study Solution And Analysis

Home >> Harvard >> Stanford University Implementing Fasb Statements 116 And 117 >>

Stanford University Implementing Fasb Statements 116 And 117 Case Study Analysis

Business is currently one of the most significant food chains worldwide. It was founded by Henri Stanford University Implementing Fasb Statements 116 And 117 in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and decrease death rate.
Business is now a global business. Unlike other multinational business, it has senior executives from different nations and attempts to make choices thinking about the entire world. Stanford University Implementing Fasb Statements 116 And 117 currently has more than 500 factories worldwide and a network spread throughout 86 nations.


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


Stanford University Implementing Fasb Statements 116 And 117's vision is to offer its clients 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 quickly and supply products that would satisfy the requirements of each age. Stanford University Implementing Fasb Statements 116 And 117 visualizes to develop 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 currently, it is the leading business in the food market, it believes in 'Great Food, Excellent Life". Its mission is to supply its customers with a variety of choices that are healthy and best in taste also. It is concentrated on providing the very best food to its clients throughout the day and night.


Business has a wide range of items that it uses to its clients. Its items include food for babies, cereals, dairy items, treats, chocolates, food for family pet and mineral water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 staff members. In 2011, Business was listed as the most rewarding organization.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the business has actually put down its goals and objectives. These objectives and goals are listed below.
• One objective of the company is to reach no land fill status. It is working toward no waste, where no waste of the factory is landfilled. It motivates its employees to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of Stanford University Implementing Fasb Statements 116 And 117 is to lose minimum food throughout production. Usually, the food produced is lost even before it reaches the customers.
• Another thing that Business is dealing with is to improve its packaging in such a way that it would help it to lower the above-mentioned complications and would likewise guarantee 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, service partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the method of NHW and investing more of its revenues on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW technique. The target of the business is not accomplished as the sales were expected 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 innovation technology. Otherwise, it may result in the declined revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business technique is based upon the concept of Nutritious, Health and Health (NHW). This technique handles the idea to bringing change in the customer choices about food and making the food stuff much healthier worrying about the health concerns.
The vision of this method is based on the key method i.e. 60/40+ which merely means that the items will have a rating 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 items in market getting it a plus on its nutritional content.
This strategy was adopted to bring more delicious plus healthy foods and beverages in market than ever. In competitors with other business, with an intent of keeping its trust over clients as Business Company has gotten more relied on by costumers.

Quantitative Analysis.

R&D Spending 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 allow the business to more invest in R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is decreasing. This indicator also shows a thumbs-up to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing debt ratio position a threat of default of Business to its financiers and could lead a decreasing share prices. Therefore, in regards to increasing financial obligation ratio, the firm ought to not invest much on R&D and should pay its present financial obligations to reduce the threat for investors.
The increasing threat of investors with increasing debt ratio and declining share costs can be observed by huge decline of EPS of Stanford University Implementing Fasb Statements 116 And 117 stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This slow development also prevent company to further invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Graphs given in the Exhibits D and E.

TWOS Analysis

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

Strategies to exploit Opportunities using Strengths

Business should introduce more innovative products by large amount of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the profit margins for the business. It could also supply Business a long term competitive advantage over its competitors.
The global growth of Business must be focused on market recording of developing countries by expansion, attracting more clients through customer's commitment. As establishing countries are more populated than industrialized countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisStanford University Implementing Fasb Statements 116 And 117 needs to do mindful acquisition and merger of organizations, as it could affect the consumer's and society's perceptions about Business. It needs to acquire and combine with those companies which have a market reputation of healthy and nutritious business. It would enhance the perceptions of customers about Business.
Business ought to not only invest its R&D on innovation, instead of it needs to likewise concentrate on the R&D spending over evaluation of expense of numerous 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 just establishing but likewise to industrialized countries. It needs to widen its circle to different countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It needs to acquire and merge with those nations having a goodwill of being a healthy company in the market. It would also allow the company to use its prospective resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based on 4 aspects; age, gender, earnings and profession. For example, Business produces a number of products connected to babies i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Stanford University Implementing Fasb Statements 116 And 117 items are quite cost effective by almost all levels, however its significant targeted customers, in regards to earnings 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 two main aspects i.e. typical earnings level of the customer as well as the climate of the area. For instance, Singapore Business Company's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and lifestyle of the consumer. For example, Business 3 in 1 Coffee target those customers whose life style is rather busy and don't 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 consumer. Its extremely nutritious products target those clients who have a health mindful attitude towards their intakes.

Stanford University Implementing Fasb Statements 116 And 117 Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are 2 alternatives:
Alternative: 1
The Company needs to invest more on acquisitions than on the R&D.
1. Acquisitions would increase total properties of the business, increasing the wealth of the company. Nevertheless, spending on R&D would be sunk cost.
2. The company can resell the obtained units in the market, if it stops working to implement its technique. Nevertheless, quantity spend on the R&D might not be restored, and it will be considered entirely sunk expense, if it do not provide potential outcomes.
3. Investing in R&D provide slow development in sales, as it takes very long time to present an item. However, acquisitions provide quick results, as it offer the company already established product, which can be marketed soon after the acquisition.
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the business to face mistaken belief of consumers about Business core worths of healthy and healthy items.
2 Large costs on acquisitions than R&D would send a signal of business's inadequacy of developing innovative products, and would results in consumer's frustration.
3. Big acquisitions than R&D would extend the product line of the company by the products which are already present in the market, making company unable to introduce brand-new innovative items.
Alternative: 2.
The Company needs to spend more on its R&D rather than acquisitions.
1. It would enable the company 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 clients by introducing those products which can be used to a completely brand-new market sector.
4. Ingenious items will provide long term advantages and high market share in long term.
1. It would reduce the profit margins of the company.
2. In case of failure, the whole costs on R&D would be thought about as sunk expense, and would affect the company at large. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might supply a negative signal to the financiers, and could result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to introduce brand-new ingenious products with less danger of converting the costs on R&D into sunk cost.
2. It would offer a favorable signal to the financiers, as the general possessions of the company would increase with its substantial R&D spending.
3. It would not affect the earnings margins of the company at a big rate as compare to alternative 2.
4. It would provide the company a strong long term market position in terms of the business's general wealth in addition to in regards to ingenious items.
1. Threat of conversion of R&D costs into sunk cost, higher than alternative 1 lesser than alternative 2.
2. Danger of mistaken belief about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less variety of ingenious products than alternative 2 and high number of innovative items than alternative 1.

Stanford University Implementing Fasb Statements 116 And 117 Conclusion

RecommendationsIt has institutionalised its techniques and culture to align itself with the market changes and client habits, which has eventually enabled it to sustain its market share. Business has actually developed substantial market share and brand identity in the urban markets, it is recommended that the company needs to focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by producing a specific brand name allowance technique through trade marketing techniques, that draw clear difference in between Stanford University Implementing Fasb Statements 116 And 117 items and other competitor products.

Stanford University Implementing Fasb Statements 116 And 117 Exhibits

PESTEL Analysis
Governmental assistance

Altering criteria of global food.
Boosted market share.
Altering perception towards healthier products
Improvements in R&D and also QA divisions.

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

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 7000
Highest after Service with much less growth than Service 3rd Lowest
R&D Spending Highest possible since 2006 Greatest after Company 2nd Least expensive
Net Profit Margin Greatest given that 2002 with rapid growth from 2004 to 2019 Due to sale of Alcon in 2018. Virtually equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition and health and wellness element Highest variety of brands with sustainable techniques Biggest confectionary as well as refined foods brand name in the world Biggest dairy products and mineral water brand worldwide
Segmentation Middle and also top middle level customers worldwide Specific consumers in addition to home team All age as well as Income Consumer Groups Center and top middle level consumers worldwide
Number of Brands 6th 5th 3rd 4th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 85525 388625 162166 954474 433937
Net Profit Margin 1.88% 1.71% 25.73% 7.68% 86.47%
EPS (Earning Per Share) 91.14 3.55 3.85 7.65 16.43
Total Asset 851492 963897 356179 896314 81238
Total Debt 96466 96772 61367 57565 11532
Debt Ratio 92% 36% 27% 97% 57%
R&D Spending 6885 4387 2449 3793 3691
R&D Spending as % of Sales 9.28% 3.37% 4.19% 8.37% 7.54%

Stanford University Implementing Fasb Statements 116 And 117 Executive Summary Stanford University Implementing Fasb Statements 116 And 117 Swot Analysis Stanford University Implementing Fasb Statements 116 And 117 Vrio Analysis Stanford University Implementing Fasb Statements 116 And 117 Pestel Analysis
Stanford University Implementing Fasb Statements 116 And 117 Porters Analysis Stanford University Implementing Fasb Statements 116 And 117 Recommendations