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The Jia Wu Expansion Case Study Analysis

Business is currently one of the most significant food chains worldwide. It was founded by Henri The Jia Wu Expansion in 1866, a German Pharmacist who initially launched "FarineLactee"; a combination of flour and milk to feed babies and decrease death rate.
Business is now a global business. Unlike other international companies, it has senior executives from various nations and tries to make decisions considering the entire world. The Jia Wu Expansion presently has more than 500 factories worldwide and a network spread throughout 86 countries.


The purpose of The Jia Wu Expansion Corporation is to improve the lifestyle of people by playing its part and offering healthy food. It wants to help the world in shaping a healthy and better future for it. It also wants to encourage people to live a healthy life. 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


The Jia Wu Expansion's vision is to provide its consumers with food that is healthy, high in quality and safe to consume. It wants to be ingenious and at the same time understand the needs and requirements of its customers. Its vision is to grow fast and offer products that would please the requirements of each age group. The Jia Wu Expansion pictures to develop a well-trained labor force which would help the business to grow


The Jia Wu Expansion's objective is that as presently, it is the leading company in the food market, it believes in 'Great Food, Good Life". Its mission is to provide its customers with a variety of choices that are healthy and finest in taste as well. It is concentrated on supplying the very best food to its consumers throughout the day and night.


The Jia Wu Expansion has a wide range of products that it offers to its customers. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has set its goals and objectives. These objectives and objectives are noted below.
• One objective of the company is to reach absolutely no land fill status. It is working toward no waste, where no waste of the factory is landfilled. It encourages its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of The Jia Wu Expansion is to lose minimum food during production. Usually, the food produced is squandered even prior to it reaches the customers.
• Another thing that Business is dealing with is to enhance its product packaging in such a way that it would help it to lower the above-mentioned complications and would also ensure the delivery of high quality of its products to its clients.
• Meet global standards of the environment.
• Construct a relationship based upon trust with its consumers, organisation partners, employees, and government.

Critical Issues

Just Recently, Business Company is focusing more towards the technique of NHW and investing more of its revenues on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW technique. The target of the company is not accomplished as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, given in Exhibit H. There is a requirement to focus more on the sales then the development technology. Otherwise, it might result in the decreased profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based on the principle of Nutritious, Health and Wellness (NHW). This technique handles the concept to bringing modification in the customer preferences about food and making the food stuff healthier worrying about the health concerns.
The vision of this strategy is based on the secret technique i.e. 60/40+ which merely indicates that the products will have a rating of 60% on the basis of taste and 40% is based upon its dietary value. The items will be made with additional dietary worth in contrast to all other items in market getting it a plus on its nutritional material.
This technique was embraced to bring more delicious plus nutritious foods and beverages in market than ever. In competition with other business, with an intention of retaining its trust over consumers as Business Business has gotten more trusted by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual amount of costs reveals that the sales are increasing at a higher rate than its R&D spending, and allow the company to more invest in R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is decreasing. This indicator also reveals a thumbs-up to the R&D costs, mergers and acquisitions.
Debt 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 posture a hazard of default of Business to its investors and might lead a decreasing share prices. Therefore, in terms of increasing debt ratio, the firm should not invest much on R&D and needs to pay its present debts to decrease the danger for financiers.
The increasing risk of financiers with increasing financial obligation ratio and decreasing share rates can be observed by substantial decline of EPS of The Jia Wu Expansion 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 likewise prevent company to further 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 estimations and Charts given up the Exhibitions D and E.

TWOS Analysis

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

Strategies to exploit Opportunities using Strengths

Business must present more innovative items by big quantity of R&D Spending and mergers and acquisitions. It could increase the market 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 worldwide expansion of Business ought to be concentrated on market capturing of establishing countries by expansion, drawing in more consumers through customer's commitment. As establishing countries are more populated than industrialized countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisThe Jia Wu Expansion should do mindful acquisition and merger of organizations, as it might impact the consumer's and society's understandings about Business. It must 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 spend its R&D on development, rather than it must likewise focus on the R&D spending over assessment of expense of numerous healthy products. This would increase cost performance of its products, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just establishing but likewise to developed nations. It should widen its circle to various nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

The Jia Wu Expansion ought to sensibly manage its acquisitions to prevent the threat of mistaken belief from the customers about Business. It needs to get and merge with those nations having a goodwill of being a healthy business in the market. This would not just improve the understanding of consumers about Business but would also increase the sales, earnings margins and market share of Business. It would also allow the business to use its possible resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The demographic division of Business is based upon four elements; age, gender, earnings and profession. For instance, Business produces several items associated with children i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. The Jia Wu Expansion products are rather affordable by almost all levels, however its significant targeted customers, in regards to income level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in nearly 86 nations. Its geographical segmentation is based upon 2 main aspects i.e. typical income level of the customer as well as the environment of the area. For example, Singapore Business Company's segmentation 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 personality and lifestyle of the consumer. Business 3 in 1 Coffee target those clients whose life design is rather busy and do not have much time.

Behavioral Segmentation

The Jia Wu Expansion behavioral division is based upon the mindset knowledge and awareness of the customer. Its extremely healthy products target those clients who have a health mindful attitude towards their consumptions.

The Jia Wu Expansion Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are two choices:
Option: 1
The Business must invest more on acquisitions than on the R&D.
1. Acquisitions would increase total possessions of the company, increasing the wealth of the company. However, spending on R&D would be sunk cost.
2. The company can resell the acquired units in the market, if it fails to implement its method. Amount spend on the R&D could not be restored, and it will be considered entirely sunk cost, if it do not offer potential outcomes.
3. Spending on R&D provide sluggish growth in sales, as it takes long period of time to present a product. Nevertheless, acquisitions offer quick results, as it supply the company currently developed product, which can be marketed not long after the acquisition.
1. Acquisition of business's which do not fit with the business's worths like Kraftz foods can lead the company to face misunderstanding of customers about Business core values of healthy and nutritious items.
2 Large costs on acquisitions than R&D would send out a signal of company's ineffectiveness of establishing innovative items, and would results in consumer's frustration.
3. Large acquisitions than R&D would extend the product line of the business by the items which are currently present in the market, making business not able to present new ingenious products.
Option: 2.
The Business needs to spend more on its R&D instead of acquisitions.
1. It would enable the company to produce more ingenious products.
2. It would provide the company a strong competitive position in the market.
3. It would allow the business to increase its targeted clients by introducing those items which can be used to a completely brand-new market segment.
4. Ingenious products will supply long term advantages and high market share in long term.
1. It would reduce the revenue margins of the business.
2. In case of failure, the whole spending on R&D would be thought about as sunk expense, and would affect the company at big. The danger 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 could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable costs on in R&D Program.
Vrio AnalysisPros:
1. It would permit the company to present brand-new ingenious products with less threat of transforming the spending on R&D into sunk cost.
2. It would supply a positive signal to the investors, as the general properties of the business would increase with its significant R&D costs.
3. It would not impact the revenue margins of the company at a big rate as compare to alternative 2.
4. It would supply the company a strong long term market position in regards to the company's total wealth in addition to in regards to innovative items.
1. Danger of conversion of R&D spending into sunk cost, higher than option 1 lesser than alternative 2.
2. Danger of misconception about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Intro of less variety of ingenious items than alternative 2 and high number of ingenious items than alternative 1.

The Jia Wu Expansion Conclusion

RecommendationsBusiness has stayed the top market player for more than a years. It has institutionalised its techniques and culture to align itself with the marketplace changes and consumer habits, which has ultimately permitted it to sustain its market share. Business has established considerable market share and brand name identity in the urban markets, it is advised that the company needs to focus on the rural locations in terms of developing brand loyalty, awareness, and equity, such can be done by creating a specific brand name allocation technique through trade marketing methods, that draw clear distinction between The Jia Wu Expansion items and other rival products. Moreover, Business should leverage its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will permit the company to develop brand equity for recently introduced and currently produced items on a higher platform, making the effective usage of resources and brand image in the market.

The Jia Wu Expansion Exhibits

PESTEL Analysis
Governmental assistance

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

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest given that 9000 Greatest after Service with much less growth than Company 6th Cheapest
R&D Spending Highest considering that 2002 Greatest after Organisation 9th Most affordable
Net Profit Margin Highest because 2009 with quick development from 2007 to 2016 Because of sale of Alcon in 2012. Nearly equal to Kraft Foods Consolidation Virtually equal to Unilever N/A
Competitive Advantage Food with Nourishment and also health and wellness aspect Highest possible variety of brand names with sustainable techniques Biggest confectionary as well as refined foods brand in the world Biggest milk items and mineral water brand name worldwide
Segmentation Center and upper center level customers worldwide Private consumers in addition to family group All age and Income Client Teams Middle as well as upper middle level consumers worldwide
Number of Brands 2nd 8th 7th 3rd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 67549 534358 162585 561136 131253
Net Profit Margin 6.31% 3.21% 89.68% 2.13% 97.21%
EPS (Earning Per Share) 78.84 3.77 2.29 9.92 58.13
Total Asset 588971 887877 228914 997441 34128
Total Debt 72192 52641 39776 68645 11197
Debt Ratio 49% 52% 81% 38% 66%
R&D Spending 1147 5329 9921 8163 6423
R&D Spending as % of Sales 5.78% 9.79% 4.89% 6.92% 3.95%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations