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Konys Inc Case Study Analysis

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Konys Inc Case Study Analysis

Business is presently one of the most significant food chains worldwide. It was founded by Henri Konys Inc in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed babies and reduce death rate.
Business is now a global business. Unlike other multinational companies, it has senior executives from different nations and attempts to make choices thinking about the whole world. Konys Inc presently has more than 500 factories worldwide and a network spread throughout 86 countries.

Purpose

The function of Konys Inc Corporation is to improve the lifestyle of individuals by playing its part and offering healthy food. It wants to help the world in shaping a healthy and better future for it. It likewise wishes to motivate people 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 much better and healthy future

Vision

Konys Inc's vision is to provide its consumers with food that is healthy, high in quality and safe to consume. It wishes to be innovative and all at once comprehend the needs and requirements of its consumers. Its vision is to grow quickly and provide products that would please the needs of each age group. Konys Inc envisions to establish a trained workforce which would help the company to grow
.

Mission

Konys Inc's objective is that as currently, it is the leading company in the food industry, it thinks in 'Excellent Food, Good Life". Its objective is to supply its customers with a variety of choices that are healthy and best in taste. It is focused on offering the best food to its consumers throughout the day and night.

Products.

Konys Inc has a broad range of products that it provides to its consumers. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the business has set its goals and objectives. These goals and objectives are noted below.
• One goal of the company is to reach absolutely no garbage dump status. It is pursuing no waste, where no waste of the factory is landfilled. It encourages its employees to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Konys Inc is to squander minimum food throughout production. Usually, the food produced is squandered even prior to it reaches the consumers.
• Another thing that Business is dealing with is to improve its product packaging in such a method that it would help it to decrease those complications and would likewise guarantee the delivery of high quality of its items to its consumers.
• Meet global requirements of the environment.
• Develop a relationship based on trust with its consumers, company partners, staff members, and government.

Critical Issues

Recently, Business Business is focusing more towards the strategy of NHW and investing more of its earnings on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW technique. 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%, offered in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based on the concept of Nutritious, Health and Health (NHW). This strategy deals with the idea to bringing change in the client preferences about food and making the food stuff much healthier worrying about the health concerns.
The vision of this strategy is based upon the key technique i.e. 60/40+ which merely suggests that the items will have a score of 60% on the basis of taste and 40% is based on its nutritional worth. The items will be produced with additional dietary value in contrast to all other products in market getting it a plus on its dietary content.
This strategy was adopted to bring more tasty plus nutritious foods and drinks in market than ever. In competition with other business, with an objective of maintaining its trust over consumers as Business Business has acquired more trusted by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual amount of spending reveals that the sales are increasing at a greater rate than its R&D spending, and enable the business to more spend on R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This sign also reveals a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of financial obligations. This increasing debt ratio present a danger of default of Business to its financiers and might lead a declining share prices. For that reason, in terms of increasing debt ratio, the company needs to not spend much on R&D and should pay its current debts to reduce the threat for investors.
The increasing threat of investors with increasing debt ratio and declining share costs can be observed by substantial decline of EPS of Konys Inc stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow perception structure of customers. This slow development also hinder company to more invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Graphs given in the Exhibits D and E.

TWOS Analysis


2 analysis can be utilized to derive different strategies based on the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more ingenious 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 company. It could also supply Business a long term competitive benefit over its rivals.
The international expansion of Business need to be focused on market recording of developing countries by growth, attracting more consumers through consumer's commitment. As establishing countries are more populated than industrialized countries, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisKonys Inc should do cautious acquisition and merger of organizations, as it could affect the customer's and society's perceptions about Business. It needs to get and combine with those business which have a market reputation of healthy and nutritious business. It would improve the perceptions of customers about Business.
Business ought to not just invest its R&D on development, rather than it should also concentrate on the R&D costs over assessment of cost of different healthy products. This would increase cost efficiency of its products, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business should relocate to not only developing however likewise to developed countries. It needs to broadens its geographical expansion. This wide geographical growth towards establishing and developed countries would lower the threat of potential losses in times of instability in different nations. It should expand its circle to various nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine 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 effectively on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on 4 elements; age, gender, earnings and profession. Business produces a number of items related to children i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Konys Inc items are quite budget-friendly by nearly all levels, but its major targeted clients, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is made up of its existence in practically 86 nations. Its geographical segmentation is based upon 2 primary aspects i.e. average income level of the customer in addition to the environment of the area. For instance, 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 division of Business is based upon the character and life style of the customer. For instance, Business 3 in 1 Coffee target those clients whose lifestyle is rather hectic and don't have much time.

Behavioral Segmentation

Konys Inc behavioral division is based upon the attitude understanding and awareness of the client. Its extremely healthy products target those consumers who have a health mindful mindset towards their consumptions.

Konys Inc Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are two choices:
Option: 1
The Business should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the business. Spending on R&D would be sunk expense.
2. The business can resell the gotten systems in the market, if it fails to execute its strategy. Nevertheless, quantity invest in the R&D might not be restored, and it will be considered entirely sunk cost, if it do not give potential outcomes.
3. Investing in R&D provide sluggish growth in sales, as it takes very long time to present an item. Acquisitions supply fast results, as it provide the company already developed product, which can be marketed quickly 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 mistaken belief of customers about Business core worths of healthy and nutritious items.
2 Large costs on acquisitions than R&D would send out a signal of business's inefficiency of developing innovative products, and would outcomes in customer's frustration.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are already present in the market, making business not able to introduce brand-new ingenious items.
Option: 2.
The Business should invest more on its R&D instead of acquisitions.
Pros:
1. It would allow the business to produce more innovative products.
2. It would provide the business a strong competitive position in the market.
3. It would enable the business to increase its targeted consumers by introducing those products which can be provided to an entirely brand-new market sector.
4. Ingenious products will provide long term benefits and high market share in long term.
Cons:
1. It would reduce the earnings margins of the business.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would impact the company at large. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could offer an unfavorable signal to the investors, and might result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to present new innovative products with less danger of transforming the spending on R&D into sunk expense.
2. It would supply a favorable signal to the financiers, as the general assets of the company 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 supply the company a strong long term market position in regards to the business's overall wealth in addition to in terms of ingenious products.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than alternative 1 lesser than alternative 2.
2. Threat of misconception about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less number of ingenious products than alternative 2 and high number of ingenious items than alternative 1.

Konys Inc Conclusion

RecommendationsIt has institutionalised its methods and culture to align itself with the market modifications and client habits, which has actually eventually enabled it to sustain its market share. Business has actually established substantial market share and brand identity in the city markets, it is recommended that the company must focus on the rural locations in terms of establishing brand name commitment, awareness, and equity, such can be done by producing a specific brand name allowance method through trade marketing strategies, that draw clear difference between Konys Inc items and other competitor items.

Konys Inc Exhibits

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

Changing standards of international food.
Enhanced market share.
Altering understanding in the direction of much healthier products
Improvements in R&D and QA divisions.

Introduction of E-marketing.
No such influence as it is favourable.
Issues over recycling.

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible because 4000
Greatest after Organisation with less development than Company 9th Most affordable
R&D Spending Highest possible since 2008 Highest after Organisation 8th Least expensive
Net Profit Margin Highest since 2005 with rapid development from 2001 to 2011 Due to sale of Alcon in 2016. Nearly equal to Kraft Foods Unification Virtually equal to Unilever N/A
Competitive Advantage Food with Nourishment as well as health and wellness variable Highest possible number of brand names with sustainable techniques Biggest confectionary and refined foods brand on the planet Largest dairy products as well as mineral water brand name worldwide
Segmentation Middle and also top center level consumers worldwide Private clients along with household group Any age and Income Client Groups Middle and also top middle level consumers worldwide
Number of Brands 9th 7th 9th 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 71472 222714 617445 239537 527365
Net Profit Margin 6.13% 9.94% 11.12% 2.27% 36.97%
EPS (Earning Per Share) 71.16 9.32 3.19 9.16 12.93
Total Asset 847479 199265 967498 612625 14392
Total Debt 66738 53774 49613 17251 96174
Debt Ratio 14% 75% 75% 45% 29%
R&D Spending 5392 5856 7419 4573 4881
R&D Spending as % of Sales 5.85% 1.62% 4.72% 7.34% 6.24%

Konys Inc Executive Summary Konys Inc Swot Analysis Konys Inc Vrio Analysis Konys Inc Pestel Analysis
Konys Inc Porters Analysis Konys Inc Recommendations