Viva Macau A Case Study Solution

Business is currently one of the biggest food chains worldwide. It was established by Henri Viva Macau A in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix of flour and milk to feed infants and reduce death rate.
Business is now a global company. Unlike other multinational companies, it has senior executives from various countries and attempts to make choices considering the whole world. Viva Macau A currently has more than 500 factories around the world and a network spread across 86 countries.

Purpose

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

Vision

Viva Macau A's vision is to provide its customers with food that is healthy, high in quality and safe to eat. Business visualizes to develop a well-trained labor force which would help the business to grow
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Mission

Viva Macau A's mission is that as presently, it is the leading company in the food industry, it believes in 'Good Food, Excellent Life". Its mission is to offer its customers with a range of options that are healthy and finest in taste. It is concentrated on providing the best food to its consumers throughout the day and night.

Products.

Viva Macau A has a wide range of products that it provides to its clients. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the business has actually put down its objectives and goals. These goals and objectives are noted below.
• One goal of the business is to reach no garbage dump status. It is working toward 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 Viva Macau A is to waste minimum food during production. Frequently, 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 method that it would help it to decrease the above-mentioned problems and would likewise guarantee the delivery of high quality of its products to its clients.
• Meet global standards of the environment.
• Build a relationship based upon trust with its customers, organisation partners, workers, and government.

Critical Issues

Just Recently, Business Company is focusing more towards the technique of NHW and investing more of its revenues 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 accomplished as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, provided in Display H. There is a requirement to focus more on the sales then the development technology. Otherwise, it might lead to the decreased income rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based upon the idea of Nutritious, Health and Wellness (NHW). This technique handles the concept to bringing change in the consumer preferences about food and making the food things healthier worrying about the health issues.
The vision of this method is based on the secret technique i.e. 60/40+ which simply indicates that the products will have a rating of 60% on the basis of taste and 40% is based upon its nutritional value. The items will be produced with extra dietary worth in contrast to all other items in market getting it a plus on its dietary material.
This strategy was adopted to bring more delicious plus healthy foods and beverages in market than ever. In competitors with other business, with an objective of maintaining its trust over customers as Business Business has gotten more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing real quantity of costs shows that the sales are increasing at a greater rate than its R&D costs, and allow the business to more spend on R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign likewise reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing financial obligation ratio pose a hazard of default of Business to its investors and might lead a decreasing share prices. For that reason, in regards to increasing debt ratio, the firm ought to not spend much on R&D and should pay its present debts to decrease the threat for financiers.
The increasing risk of financiers with increasing debt ratio and declining share prices can be observed by substantial decrease of EPS of Viva Macau A stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow understanding building of consumers. This sluggish growth also impede business 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 in the Exhibits D and E.

TWOS Analysis

TWOS analysis can be utilized to derive various methods based upon the SWOT Analysis offered above. A brief summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more ingenious products by large amount 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 might likewise offer Business a long term competitive benefit over its rivals.
The worldwide growth of Business should be focused on market capturing of developing countries by growth, drawing in more consumers through client's loyalty. As developing nations are more populous than developed countries, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Viva Macau A should do careful acquisition and merger of companies, as it could impact the client's and society's understandings about Business. It should acquire and merge with those business which have a market reputation of healthy and nutritious companies. It would enhance the perceptions of customers about Business.
Business needs to not only spend its R&D on innovation, instead of it needs to likewise concentrate on the R&D costs over evaluation of cost of different healthy products. This would increase cost effectiveness of its items, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business ought to transfer to not just developing but also to industrialized nations. It needs to widens its geographical expansion. This large geographical expansion towards developing and established countries would reduce the risk of prospective losses in times of instability in numerous nations. It ought to widen its circle to numerous countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Viva Macau A ought to sensibly manage its acquisitions to prevent the risk of misunderstanding from the customers about Business. It needs to obtain and merge with those countries having a goodwill of being a healthy business in the market. This would not just improve the perception of customers about Business but would also increase the sales, profit margins and market share of Business. It would also enable the company to use its potential resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 aspects; age, gender, earnings and profession. Business produces a number of products related to infants i.e. Cerelac, Nido, and so on and related to grownups i.e. confectionary items. Viva Macau A items are quite budget friendly by almost all levels, but its major targeted consumers, in terms of earnings level are middle and upper middle level clients.

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 customer along with the climate of the region. 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 character and life style of the client. Business 3 in 1 Coffee target those clients whose life style is quite busy and don't have much time.

Behavioral Segmentation

Viva Macau A behavioral division is based upon the mindset understanding and awareness of the client. Its highly healthy products target those clients who have a health conscious attitude towards their usages.

Viva Macau A Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand name, there are 2 alternatives:
Alternative: 1
The Company must spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the company. Nevertheless, costs on R&D would be sunk expense.
2. The business can resell the obtained units in the market, if it fails to implement its strategy. Nevertheless, amount spend on the R&D might not be restored, and it will be thought about completely sunk expense, if it do not offer prospective results.
3. Investing in R&D offer slow growth in sales, as it takes very long time to present an item. Acquisitions supply quick results, as it offer the company currently developed product, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the company to face mistaken belief of customers about Business core worths of healthy and nutritious products.
2 Big spending on acquisitions than R&D would send a signal of company's inefficiency of developing ingenious products, and would results in customer's frustration as well.
3. Large acquisitions than R&D would extend the line of product of the company by the products which are currently present in the market, making business not able to introduce brand-new ingenious products.
Option: 2.
The Business needs to invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the business to produce more innovative items.
2. It would supply the business a strong competitive position in the market.
3. It would enable the business to increase its targeted clients by introducing those items which can be offered to a completely brand-new market segment.
4. Ingenious items will offer long term benefits and high market share in long run.
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 expense, and would affect the business at big. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could provide a negative signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Pros:
1. It would allow the company to present new innovative products with less risk of transforming the spending on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the total properties of the business would increase with its substantial R&D spending.
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 business a strong long term market position in regards to the business's total wealth in addition to in regards to ingenious products.
Cons:
1. Threat of conversion of R&D spending into sunk cost, greater than alternative 1 lower 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 variety of ingenious products than alternative 1.

Viva Macau A Conclusion

Business has remained the leading market gamer for more than a decade. It has actually institutionalised its strategies and culture to align itself with the market changes and customer habits, which has actually ultimately permitted it to sustain its market share. Business has developed significant market share and brand name identity in the urban markets, it is suggested that the business must focus on the rural locations in terms of developing brand name commitment, awareness, and equity, such can be done by producing a particular brand allotment technique through trade marketing strategies, that draw clear distinction between Viva Macau A items and other rival products. Moreover, Business must take advantage of its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will permit the business to develop brand name equity for freshly introduced and currently produced products on a higher platform, making the reliable usage of resources and brand image in the market.

Viva Macau A Exhibits