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Knox Electronics Case Study Analysis

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Business is currently one of the biggest food chains worldwide. It was founded by Henri Knox Electronics in 1866, a German Pharmacist who first released "FarineLactee"; a mix of flour and milk to feed infants and decrease death rate.
Business is now a multinational company. Unlike other international companies, it has senior executives from different countries and attempts to make decisions considering the whole world. Knox Electronics presently has more than 500 factories worldwide and a network spread across 86 countries.

Purpose

The purpose of Knox Electronics Corporation is to improve the quality of life of individuals by playing its part and providing healthy food. It wishes to help the world in shaping a healthy and much better future for it. It likewise wants to motivate individuals to live a healthy life. While ensuring that the business is being successful in the long run, that's how it plays its part for a much better and healthy future

Vision

Knox Electronics's vision is to supply its customers with food that is healthy, high in quality and safe to eat. Business visualizes to develop a trained labor force which would help the company to grow
.

Mission

Knox Electronics's mission is that as presently, it is the leading company in the food industry, it thinks in 'Great Food, Good Life". Its mission is to offer its consumers with a range of choices that are healthy and best in taste. It is concentrated on supplying the best food to its clients throughout the day and night.

Products.

Business has a vast array of items that it uses to its consumers. Its items consist of food for infants, cereals, dairy items, snacks, chocolates, food for animal and bottled water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 workers. In 2011, Business was listed as the most gainful organization.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the business has laid down its objectives and objectives. These objectives and objectives are noted below.
• One objective of the business is to reach no land fill status. It is pursuing zero 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 objective of Knox Electronics is to lose minimum food during production. Usually, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is dealing with is to improve its packaging in such a way that it would help it to lower those issues and would also guarantee the shipment of high quality of its items to its consumers.
• Meet worldwide standards of the environment.
• Construct a relationship based upon trust with its consumers, service partners, employees, and federal government.

Critical Issues

Just Recently, Business Company is focusing more towards the method 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 strategy. The target of the business is not accomplished as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, given in Exhibit H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based upon the concept of Nutritious, Health and Wellness (NHW). This strategy deals with the idea to bringing modification in the client choices about food and making the food things healthier worrying about the health problems.
The vision of this method is based on the secret technique i.e. 60/40+ which merely means that the products will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The items will be manufactured with extra nutritional worth in contrast to all other items in market gaining it a plus on its dietary material.
This technique was adopted to bring more tasty plus nutritious foods and drinks in market than ever. In competitors with other business, with an objective of retaining its trust over consumers as Business Company has actually acquired more relied on by costumers.

Quantitative Analysis.

R&D Costs as a portion of sales are declining with increasing real quantity of costs reveals that the sales are increasing at a greater rate than its R&D spending, and enable the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This sign also shows a thumbs-up to the R&D spending, mergers and acquisitions.
Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D advancement rather than payment of debts. This increasing financial obligation ratio position a danger of default of Business to its investors and might lead a decreasing share costs. In terms of increasing debt ratio, the company ought to not invest much on R&D and needs to pay its present debts to decrease the risk for financiers.
The increasing risk of investors with increasing financial obligation ratio and declining share costs can be observed by huge decrease of EPS of Knox Electronics stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow perception building of consumers. This slow growth also impede company 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 calculations and Charts given in the Exhibits D and E.

TWOS Analysis


TWOS analysis can be used to derive different techniques 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 should present more ingenious items by large quantity of R&D Spending and mergers and acquisitions. It could increase the marketplace share of Business and increase the revenue margins for the business. It might likewise offer Business a long term competitive advantage over its competitors.
The global expansion of Business should be focused on market capturing of establishing nations by expansion, attracting more clients through consumer's commitment. As establishing nations are more populated than developed nations, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisKnox Electronics must do mindful acquisition and merger of companies, as it might affect the client's and society's perceptions about Business. It needs to obtain and merge with those companies which have a market reputation of healthy and healthy companies. It would enhance the understandings of consumers about Business.
Business ought to not only spend its R&D on innovation, instead of it should likewise concentrate on the R&D spending over examination of cost of numerous healthy products. This would increase cost efficiency of its products, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business should move to not only establishing however likewise to developed nations. It ought to broaden its circle to various countries like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must get and merge with those nations having a goodwill of being a healthy company in the market. It would also enable the company to utilize its possible resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based on 4 elements; age, gender, earnings and profession. Business produces numerous items related to babies i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary items. Knox Electronics items are quite affordable by nearly all levels, however its major targeted clients, in regards to income level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is composed of its existence in practically 86 countries. Its geographical segmentation is based upon 2 main factors i.e. average income level of the customer along with the climate of the area. For instance, Singapore Business Business'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 consumers whose life style is rather hectic and do not have much time.

Behavioral Segmentation

Knox Electronics behavioral segmentation is based upon the attitude knowledge and awareness of the client. Its highly healthy items target those customers who have a health conscious attitude towards their intakes.

Knox Electronics Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand, there are two alternatives:
Option: 1
The Company must spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the business, increasing the wealth of the company. Costs on R&D would be sunk cost.
2. The business can resell the gotten systems in the market, if it fails to implement its technique. Quantity invest on the R&D might not be restored, and it will be considered completely sunk cost, if it do not give possible results.
3. Spending on R&D supply sluggish growth in sales, as it takes long period of time to introduce a product. However, acquisitions supply fast results, as it provide the company currently established item, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the company to deal with misconception of consumers about Business core worths of healthy and nutritious items.
2 Large spending on acquisitions than R&D would send out a signal of business's inefficiency of establishing innovative items, and would results in consumer's dissatisfaction as well.
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 company unable to introduce brand-new innovative products.
Alternative: 2.
The Business must spend more on its R&D instead of acquisitions.
Pros:
1. It would enable the company to produce more ingenious 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 provided to an entirely new market segment.
4. Innovative items will offer long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the company.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would impact the business at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might supply an unfavorable signal to the investors, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the company to introduce brand-new innovative items with less risk of transforming the costs on R&D into sunk expense.
2. It would supply a positive signal to the financiers, as the total assets of the business would increase with its substantial 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 provide the business a strong long term market position in regards to the company's total wealth as well as in regards to ingenious items.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than alternative 1 lower than alternative 2.
2. Threat of misunderstanding about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less variety of ingenious items than alternative 2 and high number of innovative products than alternative 1.

Knox Electronics Conclusion

RecommendationsIt has actually institutionalised its methods and culture to align itself with the market changes and client behavior, which has eventually permitted it to sustain its market share. Business has actually developed substantial market share and brand identity in the urban markets, it is advised that the business ought to focus on the rural locations in terms of developing brand name loyalty, awareness, and equity, such can be done by producing a particular brand allowance method through trade marketing tactics, that draw clear difference in between Knox Electronics items and other competitor items.

Knox Electronics Exhibits

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

Transforming requirements of worldwide food.
Boosted market share.
Transforming assumption in the direction of much healthier products
Improvements in R&D and also QA divisions.

Intro of E-marketing.
No such effect as it is good.
Concerns over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 1000
Highest after Company with less development than Business 1st Lowest
R&D Spending Highest possible considering that 2009 Greatest after Business 2nd Cheapest
Net Profit Margin Greatest given that 2002 with rapid development from 2001 to 2014 Due to sale of Alcon in 2011. Practically equal to Kraft Foods Unification Nearly equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as health and wellness element Highest possible number of brands with sustainable techniques Biggest confectionary as well as processed foods brand worldwide Largest dairy items as well as mineral water brand name worldwide
Segmentation Middle as well as top middle level customers worldwide Private clients in addition to family team Every age and Revenue Customer Teams Middle and also top center level consumers worldwide
Number of Brands 9th 3rd 4th 4th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 79427 657296 958666 427434 187482
Net Profit Margin 5.54% 8.59% 86.43% 8.28% 25.36%
EPS (Earning Per Share) 93.46 4.53 2.37 2.61 81.23
Total Asset 669587 125957 144954 444691 58658
Total Debt 49217 18218 14567 81945 99396
Debt Ratio 82% 35% 58% 26% 35%
R&D Spending 6251 9389 6168 2171 8738
R&D Spending as % of Sales 3.83% 9.42% 3.25% 4.52% 3.89%

Knox Electronics Executive Summary Knox Electronics Swot Analysis Knox Electronics Vrio Analysis Knox Electronics Pestel Analysis
Knox Electronics Porters Analysis Knox Electronics Recommendations