Mistral Energy A Tale Of Two Power Markets Case Study Solution

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Mistral Energy A Tale Of Two Power Markets is presently among the biggest food cycle worldwide. It was founded by Ivey in 1866, a German Pharmacist who first introduced "FarineLactee"; a mix of flour and milk to feed infants and reduce death rate. At the exact same time, the Page brothers from Switzerland also found The Anglo-Swiss Condensed Milk Company. The 2 ended up being competitors initially but later on combined in 1905, leading to the birth of Mistral Energy A Tale Of Two Power Markets.
Business is now a multinational company. Unlike other multinational companies, it has senior executives from different countries and tries to make choices considering the entire world. Mistral Energy A Tale Of Two Power Markets presently has more than 500 factories around the world and a network spread across 86 nations.


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


Mistral Energy A Tale Of Two Power Markets's vision is to provide its clients with food that is healthy, high in quality and safe to eat. It wishes to be innovative and simultaneously comprehend the requirements and requirements of its consumers. Its vision is to grow quick and offer items that would satisfy the requirements of each age. Mistral Energy A Tale Of Two Power Markets imagines to develop a well-trained workforce which would help the company to grow


Mistral Energy A Tale Of Two Power Markets's objective is that as presently, it is the leading business in the food industry, it believes in 'Great Food, Great Life". Its mission is to supply its customers with a variety of options that are healthy and best in taste too. It is concentrated on providing the very best food to its consumers throughout the day and night.


Mistral Energy A Tale Of Two Power Markets has a broad variety of products that it uses to its customers. 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 goals and goals are listed below.
• One objective of the business is to reach absolutely no landfill status. (Business, aboutus, 2017).
• Another objective of Mistral Energy A Tale Of Two Power Markets is to waste minimum food throughout production. Most often, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is dealing with is to enhance its packaging in such a way that it would help it to reduce those complications and would also guarantee the delivery of high quality of its items to its clients.
• Meet global standards of the environment.
• Construct a relationship based on trust with its consumers, organisation partners, workers, and government.

Critical Issues

Recently, Business Company is focusing more towards the method of NHW and investing more of its profits on the R&D technology. The nation is investing more on acquisitions and mergers to support its NHW technique. Nevertheless, the target of the business is not achieved as the sales were expected to grow greater at the rate of 10% each year and the operating margins to increase by 20%, given in Display H. There is a requirement to focus more on the sales then the innovation technology. Otherwise, it might result in the decreased revenue rate. (Henderson, 2012).

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 method handles the idea to bringing modification in the consumer preferences about food and making the food things much healthier worrying about the health problems.
The vision of this strategy is based on the secret method i.e. 60/40+ which simply means that the products will have a rating of 60% on the basis of taste and 40% is based on its dietary worth. The items will be made with additional dietary worth in contrast to all other items in market gaining it a plus on its nutritional material.
This technique was adopted to bring more yummy plus healthy foods and beverages in market than ever. In competition with other business, with an intent of keeping its trust over clients as Business Business has gained more relied on by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing actual quantity of spending shows that the sales are increasing at a greater rate than its R&D spending, and permit the business to more invest in R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is declining. This sign also shows a thumbs-up to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing financial obligation ratio pose a risk of default of Business to its financiers and could lead a decreasing share costs. In terms of increasing financial obligation ratio, the firm must not invest much on R&D and should pay its current debts to decrease the risk for investors.
The increasing danger of financiers with increasing financial obligation ratio and decreasing share prices can be observed by substantial decline of EPS of Mistral Energy A Tale Of Two Power Markets stocks.
The sales growth of company is also low as compare to its mergers and acquisitions due to slow perception structure of consumers. This slow growth also hinder company to additional 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 computations and Graphs given up the Exhibits D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain different methods based on the SWOT Analysis provided above. A short summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should present more innovative items by large quantity of R&D Spending and mergers and acquisitions. It might increase the marketplace share of Business and increase the profit margins for the business. It might likewise provide Business a long term competitive advantage over its competitors.
The international expansion of Business need to be concentrated on market capturing of developing nations by expansion, bring in more consumers through consumer's loyalty. As developing countries are more populated than industrialized countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMistral Energy A Tale Of Two Power Markets should do cautious acquisition and merger of organizations, as it might affect the consumer's and society's understandings about Business. It needs to 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 ought to not only invest its R&D on innovation, rather than it needs to also focus on the R&D spending over evaluation of cost of various healthy items. This would increase cost efficiency of its items, which will lead to increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not only developing however likewise to industrialized nations. It must expands its geographical expansion. This broad geographical growth towards establishing and established nations would lower the threat of possible losses in times of instability in numerous countries. It should expand its circle to various nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Mistral Energy A Tale Of Two Power Markets ought to carefully control its acquisitions to prevent the danger of misunderstanding from the customers about Business. It needs to acquire and merge with those countries having a goodwill of being a healthy company in the market. This would not just improve the understanding 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 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 market division of Business is based on four elements; age, gender, income and profession. Business produces a number of products related to children i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary items. Mistral Energy A Tale Of Two Power Markets products are rather affordable by nearly all levels, but its significant targeted clients, in terms of earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is made up of its presence in nearly 86 nations. Its geographical segmentation is based upon 2 main elements i.e. average income level of the consumer along with the environment of the area. For instance, Singapore Business Company's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the personality and lifestyle of the client. Business 3 in 1 Coffee target those consumers whose life design is quite busy and do not have much time.

Behavioral Segmentation

Mistral Energy A Tale Of Two Power Markets behavioral division is based upon the mindset knowledge and awareness of the consumer. For example its highly healthy products target those customers who have a health conscious attitude towards their consumptions.

Mistral Energy A Tale Of Two Power Markets Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are 2 alternatives:
Option: 1
The Company needs to invest more on acquisitions than on the R&D.
1. Acquisitions would increase total properties of the company, increasing the wealth of the company. Nevertheless, costs on R&D would be sunk expense.
2. The business can resell the obtained units in the market, if it stops working to implement its strategy. Nevertheless, quantity invest in the R&D might not be restored, and it will be thought about completely sunk expense, if it do not offer possible outcomes.
3. Spending on R&D offer sluggish growth in sales, as it takes long period of time to present an item. However, acquisitions provide fast results, as it supply the business currently developed item, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the company's values 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 costs on acquisitions than R&D would send out a signal of company's inefficiency of developing ingenious items, and would results in customer's discontentment.
3. Big acquisitions than R&D would extend the product line of the company by the items which are currently present in the market, making company not able to present new innovative items.
Alternative: 2.
The Company must invest more on its R&D rather than acquisitions.
1. It would enable the business to produce more ingenious products.
2. It would provide the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted customers by presenting those products which can be used to a completely new market sector.
4. Ingenious products will supply long term advantages and high market share in long run.
1. It would reduce the profit margins of the company.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would impact the company at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which could provide a negative signal to the investors, and could result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to present brand-new ingenious products with less danger of converting the spending on R&D into sunk cost.
2. It would supply a favorable signal to the investors, as the overall assets of the business would increase with its substantial R&D spending.
3. It would not impact the earnings margins of the business at a big rate as compare to alternative 2.
4. It would offer the business a strong long term market position in terms of the company's general wealth along with in terms of innovative products.
1. Threat of conversion of R&D spending into sunk expense, greater than option 1 lower than alternative 2.
2. Threat of misunderstanding about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Intro of less variety of ingenious items than alternative 2 and high variety of innovative products than alternative 1.

Mistral Energy A Tale Of Two Power Markets Conclusion

RecommendationsIt has institutionalised its methods and culture to align itself with the market changes and customer behavior, which has actually eventually enabled it to sustain its market share. Business has established substantial market share and brand identity in the urban markets, it is advised that the business should focus on the rural areas in terms of developing brand name loyalty, awareness, and equity, such can be done by creating a particular brand allowance technique through trade marketing strategies, that draw clear difference in between Mistral Energy A Tale Of Two Power Markets products and other competitor items.

Mistral Energy A Tale Of Two Power Markets Exhibits

PESTEL Analysis
Governmental assistance

Changing standards of global food.
Improved market share. Altering assumption in the direction of healthier products Improvements in R&D and QA departments.

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

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest since 4000 Greatest after Business with less development than Service 6th Cheapest
R&D Spending Highest since 2005 Highest after Business 5th Most affordable
Net Profit Margin Highest because 2006 with fast growth from 2007 to 2019 Due to sale of Alcon in 2015. Virtually equal to Kraft Foods Consolidation Practically equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as wellness aspect Greatest variety of brand names with lasting practices Largest confectionary as well as refined foods brand name worldwide Largest dairy products and also bottled water brand in the world
Segmentation Middle and also upper middle degree consumers worldwide Individual clients in addition to household group Every age as well as Revenue Client Teams Middle and upper center level consumers worldwide
Number of Brands 4th 1st 6th 2nd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 93393 226126 772352 787997 325195
Net Profit Margin 4.48% 6.52% 18.46% 9.59% 99.12%
EPS (Earning Per Share) 18.82 8.98 9.32 7.53 86.49
Total Asset 235215 329556 678897 951387 66778
Total Debt 69572 25537 13318 43135 23997
Debt Ratio 91% 89% 48% 49% 16%
R&D Spending 1777 6543 6663 6674 5789
R&D Spending as % of Sales 9.35% 8.99% 8.46% 9.94% 5.81%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations