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Waltham Motors Division Case Study Solution

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Waltham Motors Division Case Study Analysis

Business is currently one of the biggest food chains worldwide. It was founded by Henri Waltham Motors Division in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed babies and reduce mortality rate.
Business is now a global company. Unlike other multinational business, it has senior executives from various nations and attempts to make choices considering the entire world. Waltham Motors Division currently has more than 500 factories around the world and a network spread throughout 86 nations.

Purpose

The purpose of Business Corporation is to enhance the quality of life of individuals by playing its part and providing 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

Waltham Motors Division's vision is to provide its consumers with food that is healthy, high in quality and safe to consume. Business imagines to establish a trained workforce which would help the business to grow
.

Mission

Waltham Motors Division's mission is that as currently, it is the leading business in the food market, it thinks in 'Good Food, Excellent Life". Its mission is to provide its customers with a variety of choices that are healthy and best in taste also. It is concentrated on providing the best food to its consumers throughout the day and night.

Products.

Business has a wide variety of items that it offers to its clients. Its products include food for babies, cereals, dairy items, snacks, chocolates, food for family pet and mineral water. It has around four hundred and fifty (450) factories all over the world and around 328,000 workers. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has put down its goals and objectives. These goals and objectives are listed below.
• One objective of the company is to reach no landfill status. It is pursuing zero waste, where no waste of the factory is landfilled. It encourages its employees to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Waltham Motors Division is to lose minimum food throughout production. Most often, the food produced is lost even before it reaches the clients.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to minimize those complications and would also guarantee the shipment of high quality of its items to its customers.
• Meet worldwide standards of the environment.
• Develop a relationship based upon trust with its consumers, organisation partners, employees, and government.

Critical Issues

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 method. The target of the business is not accomplished 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 technique is based upon the idea of Nutritious, Health and Wellness (NHW). This method handles the idea to bringing change in the consumer preferences about food and making the food stuff healthier worrying about the health problems.
The vision of this technique is based on the secret method i.e. 60/40+ which merely implies that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary value. The items will be produced with additional nutritional value in contrast to all other products in market gaining it a plus on its nutritional material.
This technique was embraced to bring more delicious plus healthy foods and beverages in market than ever. In competition with other companies, with an objective of retaining its trust over consumers as Business Company has acquired more relied on by customers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual amount of spending shows that the sales are increasing at a higher rate than its R&D costs, and enable the company to more invest in R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is decreasing. This sign likewise shows 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 rather than payment of debts. This increasing debt ratio present a threat of default of Business to its investors and could lead a decreasing share prices. For that reason, in regards to increasing financial obligation ratio, the company must not invest much on R&D and must pay its existing debts to decrease the danger for investors.
The increasing threat of financiers with increasing debt ratio and declining share rates can be observed by substantial decline of EPS of Waltham Motors Division stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow perception structure of customers. This slow development likewise prevent business 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 estimations and Charts given up the Exhibits D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative 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 supply Business a long term competitive advantage over its rivals.
The global growth of Business need to be concentrated on market recording of establishing nations by growth, bring in more clients through customer's loyalty. As establishing countries are more populated than developed countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisWaltham Motors Division should do cautious acquisition and merger of companies, as it might impact the consumer's and society's understandings about Business. It should acquire and combine with those business which have a market reputation of healthy and healthy business. It would enhance the perceptions of customers about Business.
Business must not only invest its R&D on innovation, instead of it should also focus on the R&D spending over assessment of expense of numerous healthy items. This would increase cost efficiency 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 establishing however likewise to developed nations. It should broadens its geographical expansion. This large geographical growth towards developing and established nations would reduce the danger of possible losses in times of instability in numerous nations. It ought to expand its circle to numerous countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Waltham Motors Division must wisely manage its acquisitions to avoid the danger of misunderstanding from the customers about Business. It ought to acquire and combine with those countries having a goodwill of being a healthy company in the market. This would not only improve the perception of consumers about Business however would also increase the sales, revenue margins and market share of Business. It would likewise allow the company to utilize its possible resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based on 4 aspects; age, gender, income and occupation. Business produces a number of items related to children i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary products. Waltham Motors Division items are rather budget friendly by nearly all levels, but its significant targeted clients, in terms of earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its existence in nearly 86 nations. Its geographical segmentation is based upon 2 main elements i.e. average income level of the consumer along with the environment of the area. Singapore Business Business'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 personality and life style of the consumer. For instance, Business 3 in 1 Coffee target those consumers whose life style is quite hectic and do not have much time.

Behavioral Segmentation

Waltham Motors Division behavioral segmentation is based upon the mindset understanding and awareness of the client. For example its extremely healthy products target those customers who have a health conscious mindset towards their consumptions.

Waltham Motors Division Alternatives

In order to sustain the brand in the market and keep the consumer undamaged with the brand, there are 2 options:
Option: 1
The Business should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the business, increasing the wealth of the business. Costs on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it fails to execute its method. Nevertheless, quantity spend on the R&D might not be revived, and it will be thought about entirely sunk cost, if it do not offer potential results.
3. Spending on R&D provide sluggish growth in sales, as it takes long period of time to present an item. However, acquisitions offer fast outcomes, as it offer the company currently developed product, which can be marketed right after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the company to face misconception of customers about Business core worths of healthy and nutritious items.
2 Big spending on acquisitions than R&D would send out a signal of company's inefficiency of developing ingenious items, and would results in consumer's frustration.
3. Big acquisitions than R&D would extend the line of product of the business by the items which are currently present in the market, making company not able to introduce brand-new ingenious items.
Alternative: 2.
The Company must invest more on its R&D instead of acquisitions.
Pros:
1. It would allow the company to produce more ingenious items.
2. It would provide the company a strong competitive position in the market.
3. It would allow the business to increase its targeted clients by introducing those products which can be offered to a totally brand-new market sector.
4. Ingenious items will provide long term benefits and high market share in long run.
Cons:
1. It would reduce the profit margins of the company.
2. In case of failure, the entire costs on R&D would be considered as sunk cost, and would impact the company at large. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could supply an unfavorable signal to the investors, and could result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce new innovative items with less threat of transforming the spending on R&D into sunk cost.
2. It would provide a favorable signal to the investors, as the general properties of the company would increase with its significant R&D spending.
3. It would not impact the profit margins of the business at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in regards to the company's overall wealth along with in regards to ingenious products.
Cons:
1. Danger of conversion of R&D spending into sunk cost, greater than alternative 1 lesser than alternative 2.
2. Risk of mistaken belief about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less variety of innovative products than alternative 2 and high number of innovative items than alternative 1.

Waltham Motors Division Conclusion

RecommendationsIt has actually institutionalized its techniques and culture to align itself with the market modifications and client behavior, which has eventually allowed it to sustain its market share. Business has established significant market share and brand name identity in the city markets, it is recommended that the business ought to focus on the rural areas in terms of establishing brand commitment, awareness, and equity, such can be done by creating a particular brand allocation method through trade marketing methods, that draw clear difference between Waltham Motors Division items and other rival items.

Waltham Motors Division Exhibits

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

Transforming requirements of international food.
Enhanced market share.
Changing perception in the direction of much healthier products
Improvements in R&D and QA divisions.

Introduction of E-marketing.
No such effect as it is favourable.
Worries over recycling.

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest since 2000
Highest possible after Company with much less development than Service 2nd Lowest
R&D Spending Greatest since 2002 Highest after Service 6th Cheapest
Net Profit Margin Highest given that 2004 with fast development from 2006 to 2015 Because of sale of Alcon in 2011. Nearly equal to Kraft Foods Incorporation Nearly equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as wellness element Highest variety of brands with sustainable methods Largest confectionary and processed foods brand on the planet Biggest dairy items and mineral water brand in the world
Segmentation Middle and upper center level consumers worldwide Individual clients together with household team All age and also Income Client Teams Center and also upper middle degree consumers worldwide
Number of Brands 5th 1st 8th 4th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 49231 316223 876453 142972 599468
Net Profit Margin 6.99% 4.72% 83.19% 9.82% 83.27%
EPS (Earning Per Share) 85.51 4.65 5.96 2.35 94.79
Total Asset 547394 412867 316724 712649 53344
Total Debt 41677 37141 18761 44385 44965
Debt Ratio 52% 67% 32% 14% 21%
R&D Spending 5835 4141 7197 2763 1414
R&D Spending as % of Sales 7.63% 6.16% 9.37% 8.83% 3.54%

Waltham Motors Division Executive Summary Waltham Motors Division Swot Analysis Waltham Motors Division Vrio Analysis Waltham Motors Division Pestel Analysis
Waltham Motors Division Porters Analysis Waltham Motors Division Recommendations