Dependable Equipment Ltd The Popcorn Predicament Case Study Solution

Case Study Solution And Analysis

Home >> Ivey >> Dependable Equipment Ltd The Popcorn Predicament >>

Dependable Equipment Ltd The Popcorn Predicament Case Study Help

Dependable Equipment Ltd The Popcorn Predicament is presently among the biggest food cycle worldwide. It was established by Ivey in 1866, a German Pharmacist who first released "FarineLactee"; a mix of flour and milk to feed babies and reduce mortality rate. At the same time, the Page siblings from Switzerland likewise found The Anglo-Swiss Condensed Milk Business. The two ended up being rivals at first but in the future merged in 1905, leading to the birth of Dependable Equipment Ltd The Popcorn Predicament.
Business is now a multinational company. Unlike other international business, it has senior executives from different nations and attempts to make decisions thinking about the whole world. Dependable Equipment Ltd The Popcorn Predicament currently has more than 500 factories around the world and a network spread across 86 countries.


The purpose of Dependable Equipment Ltd The Popcorn Predicament Corporation is to enhance the quality of life of individuals by playing its part and supplying healthy food. It wants to help the world in shaping a healthy and better future for it. It also wants to motivate individuals to live a healthy life. While ensuring that the business is succeeding in the long run, that's how it plays its part for a better and healthy future


Dependable Equipment Ltd The Popcorn Predicament's vision is to offer its consumers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and all at once understand the needs and requirements of its customers. Its vision is to grow fast and offer items that would satisfy the requirements of each age group. Dependable Equipment Ltd The Popcorn Predicament visualizes to develop a well-trained labor force which would help the business to grow


Dependable Equipment Ltd The Popcorn Predicament's mission is that as currently, it is the leading company in the food market, it thinks in 'Great Food, Good Life". Its objective is to supply its consumers with a variety of choices that are healthy and finest in taste as well. It is focused on providing the very best food to its clients throughout the day and night.


Business has a vast array of products that it provides to its consumers. Its items include food for infants, cereals, dairy items, treats, chocolates, food for pet and bottled water. It has around 4 hundred and fifty (450) factories worldwide and around 328,000 employees. 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 put down its goals and objectives. These objectives and objectives are noted below.
• One objective of the business is to reach no 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 goal of Dependable Equipment Ltd The Popcorn Predicament is to squander minimum food throughout production. Frequently, the food produced is lost even prior to it reaches the clients.
• Another thing that Business is working on is to enhance its packaging in such a way that it would help it to reduce those problems and would also guarantee the shipment of high quality of its products to its customers.
• Meet worldwide requirements of the environment.
• Build a relationship based upon trust with its customers, business partners, employees, and federal government.

Critical Issues

Just 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 technique. However, the target of the company is not accomplished as the sales were anticipated to grow higher at the rate of 10% annually and the operating margins to increase by 20%, given up Exhibit H. There is a requirement to focus more on the sales then the development technology. Otherwise, it may lead to the declined earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based upon the concept of Nutritious, Health and Health (NHW). This strategy handles the concept to bringing modification in the consumer choices about food and making the food things healthier worrying about the health problems.
The vision of this technique is based on the secret approach i.e. 60/40+ which just implies that the products will have a score of 60% on the basis of taste and 40% is based on its nutritional value. The items will be produced with extra nutritional value in contrast to all other products in market acquiring it a plus on its dietary material.
This strategy was embraced to bring more yummy plus nutritious foods and drinks in market than ever. In competition with other companies, with an objective of maintaining its trust over consumers as Business Business has acquired more relied on by costumers.

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing real quantity of costs shows that the sales are increasing at a higher rate than its R&D costs, and allow the business to more invest in R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is declining. This indicator also reveals a green light 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 development instead of payment of financial obligations. This increasing debt ratio pose a danger of default of Business to its financiers and could lead a declining share prices. In terms of increasing debt ratio, the firm ought to not invest much on R&D and should pay its current financial obligations to decrease the risk for investors.
The increasing threat of financiers with increasing financial obligation ratio and declining share rates can be observed by substantial decline of EPS of Dependable Equipment Ltd The Popcorn Predicament stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow understanding building of consumers. This slow development also prevent business to further invest in 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 Charts given in the Displays D and E.

TWOS Analysis

2 analysis can be utilized to obtain numerous strategies based on 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 items by big quantity of R&D Spending and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the business. It might likewise provide Business a long term competitive benefit over its rivals.
The worldwide growth of Business need to be concentrated on market recording of establishing countries by growth, bring in more customers through client's commitment. As developing nations are more populous than industrialized nations, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisDependable Equipment Ltd The Popcorn Predicament should do mindful acquisition and merger of companies, as it might affect the consumer's and society's perceptions about Business. It should get and merge with those companies which have a market credibility of healthy and nutritious companies. It would enhance the perceptions of consumers about Business.
Business should not just invest its R&D on development, rather than it ought to likewise concentrate on the R&D costs over examination of expense of numerous nutritious items. This would increase cost effectiveness of its items, which will lead to increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business should move to not just developing but likewise to developed countries. It ought to broadens its geographical growth. This wide geographical expansion towards developing and established countries would minimize the risk of possible losses in times of instability in numerous countries. It should broaden its circle to various nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Dependable Equipment Ltd The Popcorn Predicament must wisely manage its acquisitions to prevent the threat of mistaken belief from the customers about Business. It needs to acquire and merge with those nations having a goodwill of being a healthy company in the market. This would not only enhance the understanding of customers about Business but would also increase the sales, earnings margins and market share of Business. It would likewise enable the business to utilize its prospective resources effectively on its other operations instead of acquisitions of those companies slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based on four factors; age, gender, income and profession. For instance, Business produces several items related to children i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Dependable Equipment Ltd The Popcorn Predicament products are rather cost effective by nearly all levels, but its major targeted customers, in terms of income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in practically 86 nations. Its geographical segmentation is based upon two main factors i.e. typical earnings level of the consumer in addition to the environment of the area. Singapore Business Company's segmentation is done on the basis of the weather condition 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. Business 3 in 1 Coffee target those consumers whose life design is rather hectic and do not have much time.

Behavioral Segmentation

Dependable Equipment Ltd The Popcorn Predicament behavioral division is based upon the attitude knowledge and awareness of the customer. Its highly healthy products target those clients who have a health mindful mindset towards their usages.

Dependable Equipment Ltd The Popcorn Predicament Alternatives

In order to sustain the brand in the market and keep the consumer undamaged with the brand name, there are 2 choices:
Option: 1
The Business must invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall assets of the business, increasing the wealth of the company. Costs on R&D would be sunk cost.
2. The company can resell the acquired units in the market, if it fails to execute its strategy. Quantity invest on the R&D could not be restored, and it will be considered entirely sunk expense, if it do not offer potential outcomes.
3. Spending on R&D supply sluggish growth in sales, as it takes long period of time to introduce an item. Acquisitions offer quick outcomes, as it supply the company currently developed item, which can be marketed quickly after the acquisition.
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the business to face misunderstanding of customers about Business core values of healthy and nutritious items.
2 Large spending on acquisitions than R&D would send a signal of business's inadequacy of establishing ingenious products, and would lead to customer's frustration too.
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 business not able to present new innovative products.
Alternative: 2.
The Business ought to spend more on its R&D rather than acquisitions.
1. It would make it possible for the company to produce more innovative items.
2. It would offer the company a strong competitive position in the market.
3. It would enable the business to increase its targeted customers by introducing those items which can be offered to a totally new market segment.
4. Innovative items will supply long term benefits and high market share in long run.
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 threat is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might offer an unfavorable signal to the investors, and might result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the company to present brand-new ingenious products with less risk of converting the spending on R&D into sunk expense.
2. It would supply a favorable signal to the financiers, as the total assets of the company would increase with its considerable R&D spending.
3. It would not impact the profit margins of the company at a large rate as compare to alternative 2.
4. It would offer the business a strong long term market position in terms of the business's general wealth as well as in terms of ingenious products.
1. Danger of conversion of R&D spending into sunk cost, greater than option 1 lower than alternative 2.
2. Danger of mistaken belief about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less number of innovative products than alternative 2 and high variety of innovative products than alternative 1.

Dependable Equipment Ltd The Popcorn Predicament Conclusion

RecommendationsBusiness has remained the top market player for more than a decade. It has institutionalized its techniques and culture to align itself with the market changes and consumer behavior, which has actually eventually allowed it to sustain its market share. Business has actually developed substantial market share and brand name identity in the metropolitan markets, it is suggested that the business must focus on the rural areas in terms of establishing brand name loyalty, awareness, and equity, such can be done by creating a specific brand allotment technique through trade marketing strategies, that draw clear distinction in between Dependable Equipment Ltd The Popcorn Predicament products and other competitor items. Furthermore, Business ought to leverage its brand name image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will enable the business to develop brand equity for newly introduced and currently produced products on a higher platform, making the effective use of resources and brand image in the market.

Dependable Equipment Ltd The Popcorn Predicament Exhibits

PESTEL Analysis
Governmental assistance

Transforming criteria of international food.
Enhanced market share. Changing understanding towards much healthier items Improvements in R&D as well as QA departments.

Intro of E-marketing.
No such influence as it is beneficial. Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 9000 Greatest after Service with much less growth than Service 8th Least expensive
R&D Spending Greatest given that 2001 Greatest after Business 4th Cheapest
Net Profit Margin Greatest since 2004 with fast development from 2001 to 2018 As a result of sale of Alcon in 2013. Nearly equal to Kraft Foods Incorporation Nearly equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health aspect Highest number of brand names with sustainable methods Biggest confectionary and also refined foods brand on the planet Biggest dairy products and mineral water brand name on the planet
Segmentation Middle and top middle degree consumers worldwide Specific clients in addition to family group All age as well as Revenue Consumer Teams Middle and also top middle degree customers worldwide
Number of Brands 3rd 9th 7th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 36966 234126 774635 769385 192673
Net Profit Margin 4.92% 6.45% 96.53% 9.25% 94.95%
EPS (Earning Per Share) 56.18 2.58 8.14 3.83 47.93
Total Asset 658449 742394 645219 551773 91753
Total Debt 46449 48236 96115 99695 73225
Debt Ratio 53% 37% 77% 85% 87%
R&D Spending 9777 3575 9873 2621 9956
R&D Spending as % of Sales 9.37% 7.89% 5.68% 8.64% 8.28%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations