Colgate Palmolive Co The Precision Toothbrush Case Study Solution

Business is currently one of the biggest food chains worldwide. It was founded by Henri Colgate Palmolive Co The Precision Toothbrush in 1866, a German Pharmacist who initially released "FarineLactee"; a combination of flour and milk to feed babies and reduce death rate.
Business is now a transnational business. Unlike other international companies, it has senior executives from various countries and tries to make decisions thinking about the entire world. Colgate Palmolive Co The Precision Toothbrush presently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

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

Vision

Colgate Palmolive Co The Precision Toothbrush's vision is to provide its customers with food that is healthy, high in quality and safe to eat. Business imagines to establish a well-trained workforce which would help the company to grow
.

Mission

Colgate Palmolive Co The Precision Toothbrush's mission is that as presently, it is the leading business in the food industry, it thinks in 'Good Food, Good Life". Its mission is to supply its customers with a variety of choices that are healthy and finest in taste also. It is focused on offering the best food to its clients throughout the day and night.

Products.

Colgate Palmolive Co The Precision Toothbrush has a large variety of items that it provides to its consumers. In 2011, Business was listed as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the company has actually set its goals and goals. These goals and objectives are noted below.
• One goal of the business is to reach 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 by-products. (Business, aboutus, 2017).
• Another goal of Colgate Palmolive Co The Precision Toothbrush is to lose minimum food throughout production. Usually, the food produced is squandered even before it reaches the customers.
• Another thing that Business is working on is to enhance its packaging in such a way that it would help it to decrease those complications and would also ensure the delivery of high quality of its items to its clients.
• Meet international standards of the environment.
• Construct a relationship based upon trust with its consumers, organisation partners, workers, and federal government.

Critical Issues

Recently, Business Business is focusing more towards the technique of NHW and investing more of its earnings on the R&D innovation. The nation 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 greater at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibit H. There is a need to focus more on the sales then the development technology. Otherwise, it might result in the declined revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based on the concept of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing change in the consumer preferences about food and making the food stuff healthier concerning about the health concerns.
The vision of this method is based on the secret approach i.e. 60/40+ which simply implies that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary value. The products will be manufactured with extra dietary value in contrast to all other products in market gaining it a plus on its nutritional content.
This strategy was embraced to bring more delicious plus healthy foods and drinks in market than ever. In competition with other business, with an intent of retaining its trust over consumers as Business Business has acquired more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing real quantity of spending reveals that the sales are increasing at a greater rate than its R&D spending, and permit the company to more invest in R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This indication likewise reveals a thumbs-up 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 advancement instead of payment of debts. This increasing debt ratio position a danger of default of Business to its investors and could lead a declining share costs. For that reason, in terms of increasing financial obligation ratio, the firm must not spend much on R&D and needs to pay its present debts to decrease the threat for investors.
The increasing threat of financiers with increasing financial obligation ratio and decreasing share rates can be observed by big decline of EPS of Colgate Palmolive Co The Precision Toothbrush stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow perception building of customers. This slow development also prevent business to further spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of computations and Charts given in the Exhibitions D and E.

TWOS Analysis

TWOS analysis can be used to derive various strategies based upon the SWOT Analysis provided above. A quick summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business ought to introduce more innovative products by large amount of R&D Costs and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the business. It could likewise offer Business a long term competitive benefit over its competitors.
The worldwide growth of Business ought to be concentrated on market catching of establishing nations by growth, drawing in more consumers through consumer's commitment. As developing nations are more populous than industrialized countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Colgate Palmolive Co The Precision Toothbrush ought to do mindful acquisition and merger of organizations, as it could affect the customer's and society's understandings about Business. It needs to acquire and merge with those business which have a market reputation of healthy and healthy business. It would improve the understandings of customers about Business.
Business must not only spend its R&D on development, rather than it ought to also concentrate on the R&D spending over assessment of expense of numerous nutritious items. This would increase expense efficiency of its items, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing but likewise to industrialized countries. It must widen its circle to numerous nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Colgate Palmolive Co The Precision Toothbrush ought to wisely control its acquisitions to avoid the risk of mistaken belief from the customers about Business. It must get and merge with those nations having a goodwill of being a healthy business in the market. This would not only improve the perception of consumers about Business however would also increase the sales, profit margins and market share of Business. It would likewise make it possible for the company to utilize its possible resources efficiently on its other operations instead of acquisitions of those organizations slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based on 4 aspects; age, gender, income and occupation. Business produces numerous items related to babies i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary products. Colgate Palmolive Co The Precision Toothbrush products are quite inexpensive by practically all levels, but its significant targeted consumers, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is made up of its existence in almost 86 nations. Its geographical segmentation is based upon two primary elements i.e. average income level of the customer as well as the climate of the region. For example, Singapore Business Business's division is done on the basis of the weather condition of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and life style of the client. For instance, Business 3 in 1 Coffee target those clients whose life style is rather busy and do not have much time.

Behavioral Segmentation

Colgate Palmolive Co The Precision Toothbrush behavioral segmentation is based upon the mindset understanding and awareness of the customer. For example its extremely healthy items target those consumers who have a health conscious attitude towards their usages.

Colgate Palmolive Co The Precision Toothbrush Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand name, there are two choices:
Alternative: 1
The Company should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total properties of the company, increasing the wealth of the business. Spending on R&D would be sunk expense.
2. The business can resell the acquired systems in the market, if it stops working to implement its technique. Quantity spend on the R&D could not be revived, and it will be considered totally sunk expense, if it do not provide potential outcomes.
3. Investing in R&D offer sluggish growth in sales, as it takes very long time to present an item. However, acquisitions provide quick outcomes, as it provide the business currently developed item, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to deal with mistaken belief of customers about Business core worths of healthy and nutritious products.
2 Large spending on acquisitions than R&D would send out a signal of business's inefficiency of establishing ingenious products, and would results in consumer's frustration.
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 company not able to introduce new innovative items.
Alternative: 2.
The Business needs to invest more on its R&D rather than acquisitions.
Pros:
1. It would allow the business to produce more ingenious products.
2. It would supply the company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those products which can be offered to an entirely brand-new market section.
4. Ingenious items will supply 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 entire costs on R&D would be considered as sunk expense, and would affect the company at large. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might supply a negative signal to the investors, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Pros:
1. It would allow the business to present new ingenious products with less threat of transforming the costs on R&D into sunk cost.
2. It would provide a positive signal to the investors, as the general assets of the business would increase with its significant 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 supply the company a strong long term market position in terms of the company's general wealth as well as in terms of ingenious products.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than option 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less variety of innovative products than alternative 2 and high variety of innovative products than alternative 1.

Colgate Palmolive Co The Precision Toothbrush Conclusion

It has actually institutionalised its techniques and culture to align itself with the market modifications and client habits, which has ultimately enabled it to sustain its market share. Business has actually developed considerable market share and brand name identity in the urban markets, it is suggested that the business needs to focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by developing a specific brand allowance strategy through trade marketing methods, that draw clear distinction in between Colgate Palmolive Co The Precision Toothbrush items and other rival products.

Colgate Palmolive Co The Precision Toothbrush Exhibits