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Valjibhai Stones Case Study Analysis

Valjibhai Stones is presently among the most significant food chains worldwide. It was established by Harvard in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix of flour and milk to feed babies and decrease death rate. At the exact same time, the Page brothers from Switzerland likewise found The Anglo-Swiss Condensed Milk Company. The two ended up being competitors at first however in the future merged in 1905, leading to the birth of Valjibhai Stones.
Business is now a transnational company. Unlike other international business, it has senior executives from various countries and tries to make decisions considering the entire world. Valjibhai Stones currently has more than 500 factories worldwide and a network spread throughout 86 countries.

Purpose

The function 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 business is being successful in the long run, that's how it plays its part for a much better and healthy future

Vision

Valjibhai Stones's vision is to provide its clients with food that is healthy, high in quality and safe to eat. Business pictures to establish a well-trained labor force which would help the business to grow
.

Mission

Valjibhai Stones's mission is that as presently, it is the leading company in the food market, it thinks in 'Good Food, Great Life". Its mission is to supply its customers with a range of choices that are healthy and finest in taste. It is concentrated on offering the very best food to its clients throughout the day and night.

Products.

Valjibhai Stones has a wide variety of products that it offers to its consumers. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Remembering the vision and objective of the corporation, the business has put down its objectives and goals. These goals and goals are noted below.
• One goal of the business is to reach zero landfill status. It is working toward zero waste, where no waste of the factory is landfilled. It encourages its staff members to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of Valjibhai Stones is to squander minimum food throughout production. Frequently, 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 way that it would help it to reduce the above-mentioned complications and would also guarantee the shipment of high quality of its products to its clients.
• Meet international requirements of the environment.
• Build a relationship based upon trust with its consumers, organisation partners, staff members, and government.

Critical Issues

Just Recently, Business Company is focusing more towards the strategy 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. The target of the business is not accomplished as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, offered in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business strategy is based on the principle of Nutritious, Health and Wellness (NHW). This method deals with the concept to bringing change in the customer preferences about food and making the food things much healthier concerning about the health issues.
The vision of this technique is based on the secret method i.e. 60/40+ which simply implies that the items will have a score of 60% on the basis of taste and 40% is based upon its dietary worth. The products will be produced with additional dietary value in contrast to all other items in market gaining it a plus on its nutritional content.
This method was adopted to bring more tasty plus healthy foods and beverages in market than ever. In competition with other business, with an objective of retaining its trust over clients as Business Company has actually acquired more relied on by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing real amount of costs shows that the sales are increasing at a higher rate than its R&D spending, and enable the business to more spend on R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is decreasing. This sign also shows a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation 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 financial obligation ratio present a threat of default of Business to its financiers and might lead a decreasing share rates. For that reason, in terms of increasing financial obligation ratio, the firm ought to not spend much on R&D and needs to pay its current debts to reduce the threat for financiers.
The increasing risk of investors with increasing debt ratio and decreasing share costs can be observed by substantial decline of EPS of Valjibhai Stones stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception building of customers. This sluggish growth likewise prevent company to further 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 computations and Graphs given up the Displays D and E.

TWOS Analysis


TWOS analysis can be used to derive various techniques based on the SWOT Analysis provided above. A quick summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business must present more ingenious products by big quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the revenue margins for the business. It could also supply Business a long term competitive advantage over its rivals.
The global expansion of Business should be focused on market recording of developing countries by expansion, drawing in more clients through consumer's loyalty. As developing nations are more populous than developed countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisValjibhai Stones ought to do careful acquisition and merger of organizations, as it could impact the consumer's and society's understandings about Business. It should get and merge with those companies which have a market credibility of healthy and nutritious business. It would enhance the perceptions of consumers about Business.
Business should not only invest its R&D on innovation, rather than it should also focus on the R&D costs over evaluation of cost of numerous nutritious products. This would increase cost performance of its items, which will lead to increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business must move to not just establishing however likewise to industrialized nations. It must broaden its circle to various nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It needs to obtain and merge with those nations having a goodwill of being a healthy business in the market. It would also make it possible for the company to utilize its potential resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based upon 4 elements; age, gender, earnings and occupation. For example, Business produces several products related to infants i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Valjibhai Stones items are rather economical by practically all levels, however its significant targeted consumers, in regards to income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in almost 86 nations. Its geographical division is based upon 2 main aspects i.e. typical earnings level of the consumer along with the climate of the region. For instance, Singapore Business Company's segmentation 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 lifestyle of the client. Business 3 in 1 Coffee target those customers whose life design is quite busy and do not have much time.

Behavioral Segmentation

Valjibhai Stones behavioral segmentation is based upon the attitude understanding and awareness of the client. For instance its highly healthy products target those consumers who have a health mindful attitude towards their usages.

Valjibhai Stones Alternatives

In order to sustain the brand name in the market and keep the client intact with the brand name, there are two choices:
Alternative: 1
The Company must invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall assets of the company, increasing the wealth of the business. Spending on R&D would be sunk cost.
2. The business can resell the obtained systems in the market, if it fails to implement its strategy. Nevertheless, amount invest in the R&D could not be revived, and it will be considered completely sunk cost, if it do not give potential outcomes.
3. Investing in R&D provide slow development in sales, as it takes very long time to present an item. However, acquisitions offer quick results, as it offer the business currently established product, which can be marketed soon 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 deal with misconception of consumers about Business core values of healthy and nutritious products.
2 Large spending on acquisitions than R&D would send a signal of business's inadequacy of establishing innovative items, and would outcomes in customer's frustration.
3. Big acquisitions than R&D would extend the line of product of the company by the products which are currently present in the market, making company unable to introduce brand-new ingenious items.
Option: 2.
The Company ought to spend more on its R&D rather than acquisitions.
Pros:
1. It would allow the business to produce more innovative items.
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 completely brand-new market sector.
4. Innovative products will supply long term advantages and high market share in long run.
Cons:
1. It would decrease the revenue margins of the business.
2. In case of failure, the entire spending on R&D would be considered as sunk cost, and would impact the company at large. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which might supply a negative signal to the financiers, and could result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce brand-new innovative items with less threat of transforming the costs on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the total possessions of the business would increase with its substantial R&D costs.
3. It would not affect the profit margins of the business at a large rate as compare to alternative 2.
4. It would provide the company a strong long term market position in regards to the company's general wealth in addition to in regards to innovative products.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than alternative 1 lesser than alternative 2.
2. Danger of misconception about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Intro of less variety of innovative items than alternative 2 and high number of innovative items than alternative 1.

Valjibhai Stones Conclusion

RecommendationsBusiness has stayed the top market gamer for more than a decade. It has actually institutionalised its strategies 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 city markets, it is recommended that the company must focus on the rural locations in terms of developing brand commitment, awareness, and equity, such can be done by developing a particular brand allotment strategy through trade marketing strategies, that draw clear distinction between Valjibhai Stones items and other rival items. Valjibhai Stones ought to leverage its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will allow the business to develop brand equity for recently introduced and already produced products on a greater platform, making the effective usage of resources and brand name image in the market.

Valjibhai Stones Exhibits

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

Altering standards of worldwide food.
Improved market share.
Changing perception in the direction of much healthier items
Improvements in R&D as well as QA divisions.

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

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest considering that 5000
Greatest after Company with less development than Business 6th Least expensive
R&D Spending Highest possible since 2004 Greatest after Business 4th Most affordable
Net Profit Margin Greatest since 2003 with fast growth from 2003 to 2018 Due to sale of Alcon in 2011. Almost equal to Kraft Foods Unification Practically equal to Unilever N/A
Competitive Advantage Food with Nutrition and also wellness aspect Greatest variety of brands with sustainable techniques Biggest confectionary as well as processed foods brand on the planet Largest dairy products and bottled water brand in the world
Segmentation Center and top middle degree customers worldwide Individual consumers in addition to home group All age and Revenue Consumer Teams Middle and also top center level consumers worldwide
Number of Brands 3rd 1st 8th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 43527 971418 993379 935965 591647
Net Profit Margin 7.31% 6.64% 49.74% 4.16% 72.17%
EPS (Earning Per Share) 53.84 5.78 3.72 7.19 61.67
Total Asset 613638 144428 995926 447499 45562
Total Debt 74915 59714 32767 71228 27721
Debt Ratio 26% 44% 85% 29% 14%
R&D Spending 8738 8555 4775 9694 8693
R&D Spending as % of Sales 7.79% 8.59% 2.73% 7.75% 6.81%

Valjibhai Stones Executive Summary Valjibhai Stones Swot Analysis Valjibhai Stones Vrio Analysis Valjibhai Stones Pestel Analysis
Valjibhai Stones Porters Analysis Valjibhai Stones Recommendations