Tong Lung Metal Industry Co Ltd Case Study Solution

Tong Lung Metal Industry Co Ltd is presently one of the greatest food chains worldwide. It was established by Harvard in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and reduce mortality rate. At the very same time, the Page brothers from Switzerland likewise found The Anglo-Swiss Condensed Milk Company. The two became competitors initially but later on combined in 1905, resulting in the birth of Tong Lung Metal Industry Co Ltd.
Business is now a transnational company. Unlike other international companies, it has senior executives from different countries and tries to make choices thinking about the entire world. Tong Lung Metal Industry Co Ltd currently has more than 500 factories around the world and a network spread across 86 countries.

Purpose

The purpose of Tong Lung Metal Industry Co Ltd Corporation is to boost the quality of life of individuals by playing its part and providing healthy food. It wants to help the world in shaping a healthy and much better future for it. It likewise wishes 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 better and healthy future

Vision

Tong Lung Metal Industry Co Ltd's vision is to supply its consumers with food that is healthy, high in quality and safe to eat. Business visualizes to establish a well-trained labor force which would help the company to grow
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Mission

Tong Lung Metal Industry Co Ltd's objective is that as presently, it is the leading business in the food industry, it thinks in 'Excellent Food, Good Life". Its objective is to offer its customers with a variety of choices that are healthy and best in taste as well. It is concentrated on offering the very best food to its customers throughout the day and night.

Products.

Business has a wide range of items that it uses to its customers. Its items consist of food for infants, cereals, dairy items, snacks, chocolates, food for animal and mineral water. It has around four 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

• Bearing in mind the vision and mission of the corporation, the business has set its goals and goals. These goals and objectives are listed below.
• One goal of the business is to reach zero land fill status. (Business, aboutus, 2017).
• Another goal of Tong Lung Metal Industry Co Ltd is to waste minimum food during production. Most often, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is dealing with is to enhance its packaging in such a method that it would help it to lower the above-mentioned issues and would also ensure the delivery of high quality of its products to its consumers.
• Meet global requirements of the environment.
• Build a relationship based on trust with its consumers, company partners, employees, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its earnings on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW strategy. Nevertheless, the target of the business is not accomplished as the sales were anticipated to grow higher at the rate of 10% each year and the operating margins to increase by 20%, given in Display H. There is a need to focus more on the sales then the innovation technology. Otherwise, it might result in the decreased revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business strategy is based upon the principle of Nutritious, Health and Wellness (NHW). This technique handles the concept to bringing change in the consumer choices about food and making the food stuff healthier worrying about the health concerns.
The vision of this technique is based upon the secret method i.e. 60/40+ which simply means that the items will have a rating of 60% on the basis of taste and 40% is based upon its nutritional worth. The items will be made with extra dietary worth in contrast to all other products in market gaining it a plus on its nutritional content.
This technique was embraced to bring more yummy plus nutritious foods and drinks in market than ever. In competition with other companies, with an intention of keeping its trust over clients as Business Company has acquired more relied on by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing real quantity of costs reveals that the sales are increasing at a higher rate than its R&D costs, and permit the company to more invest in R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is decreasing. This indicator also reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its costs on mergers, acquisitions and R&D advancement instead of payment of financial obligations. This increasing debt ratio position a hazard of default of Business to its investors and could lead a decreasing share rates. In terms of increasing financial obligation ratio, the firm needs to not invest much on R&D and ought to pay its existing debts to reduce the threat for investors.
The increasing threat of financiers with increasing debt ratio and declining share rates can be observed by big decline of EPS of Tong Lung Metal Industry Co Ltd stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow perception building of consumers. This slow development also impede company to additional spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of calculations and Graphs given in the Exhibitions D and E.

TWOS Analysis

2 analysis can be utilized to obtain different strategies based upon the SWOT Analysis given above. A brief summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business must introduce more innovative products by large quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the company. It could likewise provide Business a long term competitive advantage over its rivals.
The worldwide expansion of Business need to be concentrated on market recording of establishing nations by growth, drawing in more customers through consumer's commitment. As developing countries are more populous than industrialized nations, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Tong Lung Metal Industry Co Ltd must do cautious acquisition and merger of companies, as it might affect the customer's and society's understandings about Business. It must obtain and combine with those companies which have a market reputation of healthy and nutritious business. It would enhance the understandings of customers about Business.
Business should not only spend its R&D on innovation, instead of it should also concentrate on the R&D spending over examination of expense of different nutritious products. This would increase cost effectiveness of its products, which will result in increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not only developing but also to developed nations. It must broaden its circle to numerous countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine with those countries having a goodwill of being a healthy business in the market. It would likewise make it possible for 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 demographic division of Business is based on 4 aspects; age, gender, earnings and occupation. For example, Business produces a number of products related to infants i.e. Cerelac, Nido, and so on and related to grownups i.e. confectionary items. Tong Lung Metal Industry Co Ltd items are rather affordable by practically all levels, however its significant targeted customers, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in almost 86 nations. Its geographical division is based upon 2 primary factors i.e. typical income level of the consumer in addition to the environment of the area. Singapore Business Company's segmentation 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 personality and life style of the customer. For example, Business 3 in 1 Coffee target those consumers whose life style is quite hectic and do not have much time.

Behavioral Segmentation

Tong Lung Metal Industry Co Ltd behavioral division is based upon the mindset knowledge and awareness of the consumer. For instance its highly healthy products target those clients who have a health mindful mindset towards their consumptions.

Tong Lung Metal Industry Co Ltd Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are 2 choices:
Option: 1
The Business must invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall assets of the business, increasing the wealth of the business. Nevertheless, spending on R&D would be sunk cost.
2. The business can resell the obtained units in the market, if it stops working to implement its strategy. Amount invest on the R&D might not be restored, and it will be considered completely sunk expense, if it do not provide potential outcomes.
3. Investing in R&D offer sluggish development in sales, as it takes long period of time to present an item. Acquisitions offer fast results, as it provide the company currently developed product, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the business to face misunderstanding of customers about Business core worths of healthy and healthy products.
2 Large costs on acquisitions than R&D would send a signal of company's inefficiency of developing innovative products, and would lead to customer's frustration as well.
3. Large acquisitions than R&D would extend the product line of the business by the products which are already present in the market, making company unable to present new innovative items.
Option: 2.
The Company must invest 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 provide the business a strong competitive position in the market.
3. It would enable the company to increase its targeted customers by introducing those products which can be provided to a completely new market segment.
4. Ingenious products will provide long term benefits and high market share in long run.
Cons:
1. It would reduce the profit margins of the business.
2. In case of failure, the whole costs on R&D would be considered as sunk expense, and would impact the business at large. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer an unfavorable signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would enable the company to present new innovative products with less threat of converting the spending on R&D into sunk cost.
2. It would offer a favorable signal to the financiers, as the overall properties of the business would increase with its substantial R&D costs.
3. It would not impact the revenue 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 terms of the company's overall wealth as well as in terms of innovative items.
Cons:
1. Threat of conversion of R&D spending into sunk expense, greater than option 1 lesser than alternative 2.
2. Threat of misunderstanding about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less variety of ingenious items than alternative 2 and high number of ingenious items than alternative 1.

Tong Lung Metal Industry Co Ltd Conclusion

Business has remained the leading market player for more than a years. It has institutionalized its strategies and culture to align itself with the market modifications and customer behavior, which has actually ultimately permitted it to sustain its market share. Though, Business has actually developed substantial market share and brand name identity in the city markets, it is suggested that the company should focus on the rural areas in regards to developing brand loyalty, awareness, and equity, such can be done by producing a specific brand allotment technique through trade marketing techniques, that draw clear difference between Tong Lung Metal Industry Co Ltd items and other rival products. Moreover, Business needs to leverage its brand image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other categories such as nutrition. This will allow the company to establish brand equity for freshly presented and already produced products on a greater platform, making the efficient use of resources and brand image in the market.

Tong Lung Metal Industry Co Ltd Exhibits