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Wal Marts Sustainable Product Index Case Study Solution

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Wal Marts Sustainable Product Index Case Study Solution

Business is currently one of the greatest food chains worldwide. It was established by Henri Wal Marts Sustainable Product Index in 1866, a German Pharmacist who first introduced "FarineLactee"; a mix of flour and milk to feed infants and decrease mortality rate.
Business is now a multinational business. Unlike other multinational companies, it has senior executives from different nations and attempts to make choices thinking about the whole world. Wal Marts Sustainable Product Index currently has more than 500 factories worldwide and a network spread across 86 nations.

Purpose

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

Vision

Wal Marts Sustainable Product Index's vision is to supply its consumers with food that is healthy, high in quality and safe to eat. Business pictures to establish a trained workforce which would help the business to grow
.

Mission

Wal Marts Sustainable Product Index's objective is that as presently, it is the leading business in the food industry, it thinks in 'Excellent Food, Excellent Life". Its objective is to supply its customers with a variety of choices that are healthy and finest in taste too. It is focused on offering the best food to its clients throughout the day and night.

Products.

Wal Marts Sustainable Product Index has a wide variety of products that it provides to its clients. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the business has set its objectives and objectives. These objectives and objectives are noted below.
• One objective of the company is to reach zero landfill status. (Business, aboutus, 2017).
• Another goal of Wal Marts Sustainable Product Index is to squander minimum food throughout production. Most often, the food produced is wasted even prior to it reaches the customers.
• Another thing that Business is dealing with is to improve its product packaging in such a way that it would help it to minimize the above-mentioned complications and would likewise guarantee the shipment of high quality of its items to its clients.
• Meet international standards of the environment.
• Build a relationship based on trust with its consumers, service partners, workers, and federal government.

Critical Issues

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 strategy. The target of the company is not attained as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Display H. There is a need to focus more on the sales then the innovation technology. Otherwise, it may result in the declined profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business strategy is based upon the principle of Nutritious, Health and Health (NHW). This technique handles the concept to bringing modification in the customer choices about food and making the food stuff healthier concerning 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 worth. The items will be produced with additional dietary value in contrast to all other products in market acquiring it a plus on its dietary material.
This strategy was embraced to bring more tasty plus nutritious foods and beverages in market than ever. In competition with other companies, with an intent of keeping its trust over consumers as Business Business has gained more relied on by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing real amount of costs reveals that the sales are increasing at a greater rate than its R&D costs, and allow the business to more spend on R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is decreasing. This indication also shows a thumbs-up 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 advancement rather than payment of debts. This increasing debt ratio present a risk of default of Business to its financiers and could lead a decreasing share costs. For that reason, in terms of increasing debt ratio, the company needs to not spend much on R&D and ought to pay its present financial obligations to decrease the risk for investors.
The increasing danger of financiers with increasing financial obligation ratio and declining share costs can be observed by big decline of EPS of Wal Marts Sustainable Product Index stocks.
The sales development of company is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish development also hinder company to additional spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Graphs given up the Displays D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative items by large amount 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 likewise offer Business a long term competitive advantage over its competitors.
The worldwide growth of Business must be concentrated on market capturing of establishing countries by expansion, drawing in more customers through consumer's loyalty. As developing countries are more populated than developed countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisWal Marts Sustainable Product Index should do cautious acquisition and merger of companies, as it might affect the consumer's and society's understandings about Business. It needs to get and merge with those business which have a market credibility of healthy and nutritious companies. It would improve the understandings of customers about Business.
Business should not just invest its R&D on innovation, rather than it must likewise focus on the R&D costs over examination of cost of various healthy items. This would increase expense performance of its items, which will lead to increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

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

Strategies to overcome weaknesses to avoid threats

It needs to get and merge with those countries having a goodwill of being a healthy company in the market. It would also enable the business to utilize its possible resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 factors; age, gender, earnings and occupation. Business produces several products related to babies i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary items. Wal Marts Sustainable Product Index items are quite cost effective by almost all levels, however its major targeted consumers, in regards to income level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is composed of its presence in nearly 86 countries. Its geographical division is based upon 2 main factors i.e. average earnings level of the consumer along with the environment of the region. 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 lifestyle of the customer. Business 3 in 1 Coffee target those clients whose life design is rather hectic and don't have much time.

Behavioral Segmentation

Wal Marts Sustainable Product Index behavioral division is based upon the attitude understanding and awareness of the consumer. For example its highly healthy items target those customers who have a health mindful mindset towards their intakes.

Wal Marts Sustainable Product Index Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are two alternatives:
Alternative: 1
The Company ought to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the company, increasing the wealth of the company. However, costs on R&D would be sunk cost.
2. The business can resell the gotten units in the market, if it stops working to implement its technique. Quantity invest on the R&D might not be restored, and it will be considered entirely sunk expense, if it do not give potential results.
3. Spending on R&D offer sluggish growth in sales, as it takes long time to introduce an item. Nevertheless, acquisitions supply quick outcomes, as it supply the company already established item, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to deal with misconception of customers about Business core values of healthy and healthy products.
2 Big spending on acquisitions than R&D would send a signal of company's inefficiency of establishing ingenious products, and would lead to customer's frustration too.
3. Large acquisitions than R&D would extend the line of product of the company by the products which are already present in the market, making business unable to present brand-new innovative items.
Option: 2.
The Business ought to invest more on its R&D instead of acquisitions.
Pros:
1. It would allow the business to produce more innovative items.
2. It would provide the company a strong competitive position in the market.
3. It would allow the business to increase its targeted customers by presenting those items which can be provided to a totally new market segment.
4. Innovative products will offer long term advantages and high market share in long term.
Cons:
1. It would decrease the earnings margins of the company.
2. In case of failure, the whole costs on R&D would be thought about as sunk expense, and would affect the business at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer a negative 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 new ingenious items with less threat of converting the spending on R&D into sunk expense.
2. It would offer a favorable signal to the financiers, as the overall possessions of the business would increase with its considerable R&D costs.
3. It would not affect the earnings margins of the company at a large rate as compare to alternative 2.
4. It would provide the company a strong long term market position in terms of the company's total wealth along with in regards to innovative items.
Cons:
1. Threat of conversion of R&D costs into sunk cost, higher than option 1 lesser than alternative 2.
2. Risk of misunderstanding about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less variety of ingenious products than alternative 2 and high number of ingenious products than alternative 1.

Wal Marts Sustainable Product Index Conclusion

RecommendationsIt has actually institutionalised its strategies and culture to align itself with the market changes and consumer behavior, which has ultimately enabled it to sustain its market share. Business has actually established substantial market share and brand name identity in the city markets, it is recommended that the company ought to focus on the rural areas in terms of developing brand name loyalty, awareness, and equity, such can be done by developing a particular brand allowance method through trade marketing techniques, that draw clear difference in between Wal Marts Sustainable Product Index products and other rival products.

Wal Marts Sustainable Product Index Exhibits

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

Changing standards of worldwide food.
Enhanced market share.
Transforming assumption towards much healthier products
Improvements in R&D as well as QA departments.

Introduction of E-marketing.
No such impact as it is good.
Worries over recycling.

Use of resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible because 1000
Highest after Organisation with less development than Business 8th Lowest
R&D Spending Greatest given that 2001 Greatest after Company 1st Least expensive
Net Profit Margin Greatest since 2009 with rapid development from 2006 to 2012 Because of sale of Alcon in 2013. Almost equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health variable Highest possible number of brands with lasting methods Biggest confectionary as well as processed foods brand name on the planet Largest dairy products as well as bottled water brand name on the planet
Segmentation Center and upper middle degree consumers worldwide Specific consumers in addition to home group Every age as well as Earnings Client Teams Middle as well as upper center level customers worldwide
Number of Brands 1st 2nd 8th 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 81951 113832 766588 414125 147466
Net Profit Margin 1.63% 6.77% 22.49% 3.11% 64.61%
EPS (Earning Per Share) 73.85 8.92 8.77 2.96 28.57
Total Asset 612559 162356 184814 666598 86883
Total Debt 12323 58112 82912 59252 15172
Debt Ratio 43% 78% 51% 28% 82%
R&D Spending 4258 3292 2366 5784 1483
R&D Spending as % of Sales 1.39% 4.26% 7.69% 9.43% 4.18%

Wal Marts Sustainable Product Index Executive Summary Wal Marts Sustainable Product Index Swot Analysis Wal Marts Sustainable Product Index Vrio Analysis Wal Marts Sustainable Product Index Pestel Analysis
Wal Marts Sustainable Product Index Porters Analysis Wal Marts Sustainable Product Index Recommendations