Bayer Ag A Case Study Solution

Business is presently one of the most significant food chains worldwide. It was established by Henri Bayer Ag A in 1866, a German Pharmacist who first launched "FarineLactee"; a mix of flour and milk to feed babies and reduce death rate.
Business is now a multinational business. Unlike other international business, it has senior executives from different countries and tries to make choices thinking about the whole world. Bayer Ag A presently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The purpose of Business Corporation is to boost the quality of life of people by playing its part and offering healthy food. While making sure that the company is prospering in the long run, that's how it plays its part for a much better and healthy future

Vision

Bayer Ag A's vision is to supply its customers with food that is healthy, high in quality and safe to eat. Business envisions to establish a well-trained labor force which would help the company to grow
.

Mission

Bayer Ag A's mission is that as currently, it is the leading company in the food market, it thinks in 'Excellent Food, Great Life". Its mission is to provide its consumers with a range of choices that are healthy and best in taste too. It is focused on providing the very best food to its consumers throughout the day and night.

Products.

Bayer Ag A has a broad variety of products that it provides to its clients. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has set its objectives and objectives. These goals and goals are noted below.
• One objective of the business is to reach absolutely no landfill status. It is pursuing absolutely no waste, where no waste of the factory is landfilled. It motivates its employees to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Bayer Ag A is to squander minimum food during production. Frequently, the food produced is squandered even prior to 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 complications and would likewise guarantee the delivery of high quality of its products to its consumers.
• Meet global requirements of the environment.
• Build a relationship based upon trust with its customers, service partners, employees, and government.

Critical Issues

Recently, Business Business is focusing more towards the technique of NHW and investing more of its revenues on the R&D innovation. The nation is investing more on acquisitions and mergers to support its NHW method. The target of the company is not achieved as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, offered in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business method is based upon the idea of Nutritious, Health and Wellness (NHW). This technique deals with the idea to bringing change in the customer choices about food and making the food stuff healthier worrying about the health concerns.
The vision of this method is based upon the secret technique i.e. 60/40+ which just suggests that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary worth. The products will be manufactured with additional nutritional worth in contrast to all other items in market getting it a plus on its dietary material.
This technique was embraced to bring more delicious plus nutritious foods and drinks in market than ever. In competitors with other business, with an intent of maintaining its trust over customers as Business Company has actually gotten more relied on by customers.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing real amount of spending shows that the sales are increasing at a higher rate than its R&D spending, and allow the company to more spend on R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This indicator likewise reveals a green light to the R&D costs, 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 debt ratio position a risk of default of Business to its financiers and could lead a declining share prices. In terms of increasing financial obligation ratio, the company needs to not invest much on R&D and must pay its present debts to reduce the threat for investors.
The increasing threat of financiers with increasing debt ratio and decreasing share costs can be observed by big decrease of EPS of Bayer Ag A stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish growth also impede 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 calculations and Graphs given in the Exhibits D and E.

TWOS Analysis

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

Strategies to exploit Opportunities using Strengths

Business ought to present more innovative items by big quantity of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the earnings margins for the business. It might also provide Business a long term competitive benefit over its competitors.
The global growth of Business must be concentrated on market catching of developing countries by expansion, drawing in more clients through client's loyalty. As establishing countries are more populated than industrialized countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Bayer Ag A must do mindful acquisition and merger of organizations, as it might impact the client's and society's understandings about Business. It should obtain and merge with those companies which have a market credibility of healthy and healthy business. It would enhance the perceptions of customers about Business.
Business must not just spend its R&D on development, instead of it needs to likewise focus on the R&D spending over assessment of expense of numerous healthy products. This would increase expense performance of its items, which will result in increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business should relocate to not just developing but likewise to developed nations. It ought to expands its geographical growth. This wide geographical expansion towards developing and developed countries would decrease the risk of prospective losses in times of instability in different nations. It must expand its circle to different countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Bayer Ag A ought to sensibly manage its acquisitions to prevent the threat of misunderstanding from the customers about Business. It must get and combine with those nations having a goodwill of being a healthy company in the market. This would not only improve the perception of consumers about Business but would also increase the sales, profit margins and market share of Business. It would likewise make it possible for the company to use its possible resources efficiently on its other operations instead of acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The demographic division of Business is based on four factors; age, gender, earnings and profession. Business produces a number of products related to infants i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary products. Bayer Ag A products are quite budget-friendly by almost all levels, but its major targeted clients, in terms of income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its existence in nearly 86 nations. Its geographical segmentation is based upon 2 main aspects i.e. average income level of the customer in addition to the climate of the region. Singapore Business Business's division is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and lifestyle of the customer. For example, Business 3 in 1 Coffee target those customers whose life style is rather hectic and do not have much time.

Behavioral Segmentation

Bayer Ag A behavioral division is based upon the attitude knowledge and awareness of the customer. Its extremely nutritious products target those consumers who have a health mindful attitude towards their intakes.

Bayer Ag A Alternatives

In order to sustain the brand name in the market and keep the client undamaged with the brand, there are two options:
Alternative: 1
The Company should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall properties of the company, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The business can resell the acquired systems in the market, if it fails to implement its strategy. Nevertheless, quantity spend on the R&D could not be revived, and it will be considered completely sunk expense, if it do not provide possible results.
3. Investing in R&D offer slow growth in sales, as it takes very long time to present an item. However, acquisitions provide fast outcomes, as it supply the business currently developed item, which can be marketed right after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the business to face mistaken belief of consumers about Business core worths of healthy and nutritious products.
2 Large costs on acquisitions than R&D would send out a signal of business's inefficiency of developing innovative items, and would results in consumer's discontentment.
3. Big acquisitions than R&D would extend the line of product of the company by the items which are currently present in the market, making business not able to introduce new ingenious products.
Alternative: 2.
The Company needs to invest more on its R&D instead of acquisitions.
Pros:
1. It would enable the business to produce more innovative products.
2. It would offer the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted customers by introducing those items which can be used to a totally brand-new market sector.
4. Ingenious products will offer 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 whole costs on R&D would be considered as sunk cost, and would affect the company at big. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could supply a negative signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Pros:
1. It would allow the business to introduce brand-new innovative items with less threat of converting the costs on R&D into sunk expense.
2. It would provide a positive signal to the investors, as the general properties of the business would increase with its substantial R&D costs.
3. It would not affect the profit 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 regards to the company's overall wealth as well as in regards to innovative products.
Cons:
1. Risk of conversion of R&D spending into sunk expense, higher than option 1 lesser than alternative 2.
2. Danger of misconception about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Intro of less variety of innovative items than alternative 2 and high number of innovative items than alternative 1.

Bayer Ag A Conclusion

It has actually institutionalised its techniques and culture to align itself with the market modifications and customer habits, which has actually ultimately allowed it to sustain its market share. Business has developed significant market share and brand identity in the city markets, it is suggested that the company needs to 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 techniques, that draw clear distinction in between Bayer Ag A products and other rival products.

Bayer Ag A Exhibits