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The Kashagan Production Sharing Agreement Psa Case Study Solution

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The Kashagan Production Sharing Agreement Psa Case Study Solution

The Kashagan Production Sharing Agreement Psa is currently among the most significant food chains worldwide. It was established by Harvard in 1866, a German Pharmacist who first released "FarineLactee"; a mix of flour and milk to feed infants and reduce death rate. At the same time, the Page siblings from Switzerland likewise found The Anglo-Swiss Condensed Milk Business. The two ended up being competitors in the beginning however in the future merged in 1905, leading to the birth of The Kashagan Production Sharing Agreement Psa.
Business is now a multinational company. Unlike other international companies, it has senior executives from different countries and tries to make choices thinking about the whole world. The Kashagan Production Sharing Agreement Psa currently has more than 500 factories around the world and a network spread throughout 86 countries.

Purpose

The function of The Kashagan Production Sharing Agreement Psa Corporation is to improve the lifestyle of individuals by playing its part and supplying healthy food. It wants to help the world in forming a healthy and much better future for it. It likewise wants to encourage people to live a healthy life. While making certain 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

The Kashagan Production Sharing Agreement Psa's vision is to provide its clients with food that is healthy, high in quality and safe to consume. It wants to be ingenious and concurrently 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. The Kashagan Production Sharing Agreement Psa imagines to establish a well-trained labor force which would help the company to grow
.

Mission

The Kashagan Production Sharing Agreement Psa's mission is that as presently, it is the leading business in the food industry, it believes in 'Good Food, Great Life". Its objective is to provide its consumers with a range of options that are healthy and finest in taste as well. It is concentrated on providing the best food to its consumers throughout the day and night.

Products.

The Kashagan Production Sharing Agreement Psa has a wide range of products that it uses to its clients. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the company has laid down its goals and objectives. These objectives and goals are noted below.
• One objective of the business is to reach absolutely no landfill status. It is working toward absolutely no waste, where no waste of the factory is landfilled. It encourages its staff members to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of The Kashagan Production Sharing Agreement Psa is to waste minimum food during production. Usually, the food produced is lost even prior to it reaches the customers.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to reduce those issues and would also ensure the shipment of high quality of its products to its customers.
• Meet global standards of the environment.
• Construct a relationship based on trust with its consumers, business partners, staff members, and government.

Critical Issues

Recently, Business Company is focusing more towards the strategy of NHW and investing more of its profits on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW strategy. The target of the company is not attained 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 Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based on the idea of Nutritious, Health and Health (NHW). This technique handles the concept to bringing modification in the consumer choices about food and making the food stuff healthier concerning about the health problems.
The vision of this method is based upon the key technique i.e. 60/40+ which simply indicates that the items will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The products will be manufactured with extra nutritional value in contrast to all other products in market gaining it a plus on its dietary material.
This strategy was adopted to bring more yummy plus healthy foods and drinks in market than ever. In competition with other companies, with an intent of retaining its trust over clients as Business Company has actually acquired more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual quantity of costs reveals that the sales are increasing at a greater rate than its R&D costs, and allow 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 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 rather than payment of debts. This increasing financial obligation ratio position a danger of default of Business to its financiers and might lead a decreasing share prices. In terms of increasing financial obligation ratio, the company ought to not spend much on R&D and should pay its present financial obligations to decrease the threat for financiers.
The increasing danger of financiers with increasing financial obligation ratio and decreasing share rates can be observed by huge decline of EPS of The Kashagan Production Sharing Agreement Psa stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow development likewise impede business 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 estimations and Charts given in the Exhibitions D and E.

TWOS Analysis


2 analysis can be utilized to derive various methods based on the SWOT Analysis offered above. A short summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should present more ingenious products by big amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the profit margins for the company. It might likewise provide Business a long term competitive advantage over its competitors.
The international growth of Business must be concentrated on market catching of establishing countries by expansion, drawing in more consumers through consumer's commitment. As developing nations are more populated than developed nations, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisThe Kashagan Production Sharing Agreement Psa needs to do careful acquisition and merger of organizations, as it could affect the client's and society's perceptions about Business. It needs to acquire and combine with those companies which have a market track record of healthy and healthy business. It would improve the perceptions of consumers about Business.
Business needs to not only invest its R&D on development, rather than it must also focus on the R&D costs over examination of expense of various nutritious items. This would increase cost 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 needs to move to not only developing however also to developed countries. It should widen its circle to numerous countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

The Kashagan Production Sharing Agreement Psa ought to carefully control its acquisitions to avoid the danger of mistaken belief from the customers about Business. It ought to obtain and combine with those countries having a goodwill of being a healthy company in the market. This would not only enhance the perception of customers about Business but would likewise increase the sales, revenue margins and market share of Business. It would also allow the business to utilize its possible resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 elements; age, gender, earnings and occupation. For instance, Business produces numerous products related to infants i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary products. The Kashagan Production Sharing Agreement Psa items are rather cost effective by practically all levels, however its significant targeted consumers, in regards to income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its presence in practically 86 countries. Its geographical division is based upon 2 main factors i.e. average income level of the customer as well as the environment of the area. For example, 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 life style of the consumer. For instance, Business 3 in 1 Coffee target those customers whose lifestyle is rather hectic and do not have much time.

Behavioral Segmentation

The Kashagan Production Sharing Agreement Psa behavioral segmentation is based upon the attitude knowledge and awareness of the consumer. Its extremely nutritious products target those consumers who have a health mindful mindset towards their consumptions.

The Kashagan Production Sharing Agreement Psa Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand name, there are two alternatives:
Option: 1
The Business should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the company, increasing the wealth of the business. Spending on R&D would be sunk expense.
2. The business can resell the acquired units in the market, if it fails to implement its method. Nevertheless, quantity spend on the R&D could not be restored, and it will be thought about completely sunk cost, if it do not offer possible outcomes.
3. Investing in R&D provide sluggish growth in sales, as it takes long time to introduce a product. Acquisitions supply fast results, as it offer the business already established item, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's values like Kraftz foods can lead the company to face misunderstanding of customers about Business core worths of healthy and nutritious products.
2 Big costs on acquisitions than R&D would send a signal of business's inadequacy of establishing innovative items, and would lead to customer's discontentment also.
3. Big acquisitions than R&D would extend the product line of the company by the items which are currently present in the market, making business not able to present brand-new innovative items.
Alternative: 2.
The Business ought to invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the business to produce more ingenious products.
2. It would provide the company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those items which can be used to a completely new market section.
4. Innovative products will offer long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the business.
2. In case of failure, the whole spending on R&D would be considered as sunk cost, and would affect the business at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which could offer an unfavorable signal to the investors, and could result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with considerable costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce brand-new innovative products with less threat of converting the spending on R&D into sunk expense.
2. It would provide a positive signal to the financiers, as the total properties of the company would increase with its considerable R&D spending.
3. It would not impact the revenue margins of the business at a large rate as compare to alternative 2.
4. It would offer the company a strong long term market position in terms of the company's total wealth as well as in regards to innovative products.
Cons:
1. Danger of conversion of R&D costs into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Risk of mistaken belief about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less variety of ingenious products than alternative 2 and high variety of ingenious products than alternative 1.

The Kashagan Production Sharing Agreement Psa Conclusion

RecommendationsBusiness has actually remained the top market gamer for more than a years. It has institutionalized its strategies and culture to align itself with the market modifications and client behavior, which has actually eventually allowed it to sustain its market share. Though, Business has actually developed significant market share and brand identity in the metropolitan markets, it is recommended that the company must focus on the rural areas in terms of developing brand commitment, awareness, and equity, such can be done by developing a specific brand name allocation technique through trade marketing strategies, that draw clear distinction between The Kashagan Production Sharing Agreement Psa products and other rival products. Additionally, Business needs to utilize its brand picture of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will enable the business to develop brand name equity for freshly presented and already produced items on a higher platform, making the effective usage of resources and brand name image in the market.

The Kashagan Production Sharing Agreement Psa Exhibits

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

Altering criteria of worldwide food.
Enhanced market share.
Altering perception towards healthier items
Improvements in R&D and QA divisions.

Intro of E-marketing.
No such influence as it is favourable.
Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest since 8000
Greatest after Business with less development than Business 8th Least expensive
R&D Spending Highest considering that 2005 Highest after Organisation 4th Least expensive
Net Profit Margin Highest because 2003 with rapid development from 2006 to 2019 Because of sale of Alcon in 2013. Almost equal to Kraft Foods Consolidation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition and wellness variable Highest number of brands with lasting practices Largest confectionary and refined foods brand worldwide Largest dairy items and also bottled water brand name on the planet
Segmentation Center and also upper middle degree customers worldwide Private consumers in addition to family group All age and Revenue Consumer Groups Center and also upper center degree consumers worldwide
Number of Brands 2nd 8th 2nd 5th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 27817 316324 321233 729413 148278
Net Profit Margin 1.12% 4.77% 81.11% 2.63% 86.69%
EPS (Earning Per Share) 89.21 6.95 6.49 3.48 29.15
Total Asset 122531 161696 278866 986267 33721
Total Debt 72482 32879 74253 24917 41231
Debt Ratio 89% 93% 89% 23% 73%
R&D Spending 7237 3661 2777 9179 7478
R&D Spending as % of Sales 2.71% 1.86% 8.73% 4.62% 1.84%

The Kashagan Production Sharing Agreement Psa Executive Summary The Kashagan Production Sharing Agreement Psa Swot Analysis The Kashagan Production Sharing Agreement Psa Vrio Analysis The Kashagan Production Sharing Agreement Psa Pestel Analysis
The Kashagan Production Sharing Agreement Psa Porters Analysis The Kashagan Production Sharing Agreement Psa Recommendations