A Bayesian Examines The Lady Tasting Tea Case Study Solution

Case Study Solution And Analysis

Home >> Kelloggs >> A Bayesian Examines The Lady Tasting Tea >>

A Bayesian Examines The Lady Tasting Tea Case Study Solution

A Bayesian Examines The Lady Tasting Tea is presently among the most significant food cycle worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed babies and decrease death rate. At the very same time, the Page brothers from Switzerland likewise found The Anglo-Swiss Condensed Milk Business. The 2 became competitors at first however in the future merged in 1905, leading to the birth of A Bayesian Examines The Lady Tasting Tea.
Business is now a global company. Unlike other international companies, it has senior executives from different nations and attempts to make choices thinking about the entire world. A Bayesian Examines The Lady Tasting Tea currently has more than 500 factories worldwide and a network spread across 86 countries.


The function of Business Corporation is to enhance the quality of life of individuals 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 much better and healthy future


A Bayesian Examines The Lady Tasting Tea's vision is to supply its customers with food that is healthy, high in quality and safe to consume. Business visualizes to establish a well-trained workforce which would help the company to grow


A Bayesian Examines The Lady Tasting Tea's mission is that as currently, it is the leading company in the food market, it believes in 'Good Food, Good Life". Its mission is to provide its consumers with a range of choices that are healthy and finest in taste too. It is concentrated on supplying the very best food to its clients throughout the day and night.


A Bayesian Examines The Lady Tasting Tea has a broad variety of items that it offers to its customers. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Remembering the vision and mission of the corporation, the business has actually laid down its objectives and goals. These objectives and objectives are listed below.
• One objective of the business is to reach absolutely no garbage dump status. (Business, aboutus, 2017).
• Another goal of A Bayesian Examines The Lady Tasting Tea is to squander minimum food during production. Most often, the food produced is lost even before it reaches the clients.
• Another thing that Business is working on is to improve its product packaging in such a way that it would help it to lower those complications and would likewise ensure the shipment of high quality of its items to its customers.
• Meet international requirements of the environment.
• Build a relationship based upon trust with its customers, organisation partners, employees, and federal 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 method. 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%, provided in Exhibition H. There is a need to focus more on the sales then the innovation technology. Otherwise, it may lead to the declined income rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based upon the concept of Nutritious, Health and Wellness (NHW). This strategy handles the concept to bringing change in the customer preferences about food and making the food stuff healthier concerning about the health problems.
The vision of this method is based upon the key approach i.e. 60/40+ which simply means that the items will have a score of 60% on the basis of taste and 40% is based upon its nutritional worth. The products will be manufactured with additional nutritional worth in contrast to all other items in market getting it a plus on its nutritional content.
This method was embraced to bring more yummy plus nutritious foods and beverages in market than ever. In competitors with other companies, with an objective of retaining its trust over customers as Business Company has acquired more relied on by costumers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing real quantity of spending reveals 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 Profit Margin is increasing while R&D as a percentage of sales is declining. This indicator likewise reveals a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of debts. This increasing financial obligation ratio position a danger of default of Business to its financiers and might lead a decreasing share rates. In terms of increasing financial obligation ratio, the company must not invest much on R&D and must pay its existing financial obligations to reduce the danger for financiers.
The increasing threat of investors with increasing debt ratio and declining share prices can be observed by big decrease of EPS of A Bayesian Examines The Lady Tasting Tea stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This sluggish growth also hinder company to further spend on 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 Exhibitions D and E.

TWOS Analysis

2 analysis can be used to derive different techniques based upon the SWOT Analysis offered above. A short summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more innovative items by big quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the earnings margins for the company. It could also supply Business a long term competitive advantage over its rivals.
The international expansion of Business should be concentrated on market catching of establishing nations by growth, attracting more clients through consumer's loyalty. As establishing countries are more populous than industrialized nations, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisA Bayesian Examines The Lady Tasting Tea must do careful acquisition and merger of companies, as it might affect the client's and society's perceptions about Business. It must get and combine with those companies which have a market track record of healthy and healthy business. It would enhance the understandings of consumers about Business.
Business needs to not only spend its R&D on innovation, rather than it ought to likewise concentrate on the R&D costs over examination of expense of different nutritious products. 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 transfer to not just establishing however also to developed countries. It ought to widens its geographical growth. This broad geographical growth towards establishing and established nations would lower the risk of prospective losses in times of instability in different countries. It ought to widen its circle to different nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It ought to acquire and combine with those nations having a goodwill of being a healthy company in the market. It would likewise enable the business to utilize its possible resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 factors; age, gender, earnings and profession. Business produces a number of products related to infants i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary items. A Bayesian Examines The Lady Tasting Tea items are quite budget friendly by practically all levels, however its major targeted customers, in terms of income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is made up of its presence in almost 86 nations. Its geographical division is based upon two main factors i.e. average income level of the customer along with the environment of the area. For example, Singapore Business Company's division 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 customer. Business 3 in 1 Coffee target those customers whose life design is quite hectic and don't have much time.

Behavioral Segmentation

A Bayesian Examines The Lady Tasting Tea behavioral segmentation is based upon the mindset knowledge and awareness of the consumer. For instance its highly nutritious products target those customers who have a health conscious attitude towards their consumptions.

A Bayesian Examines The Lady Tasting Tea Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand name, there are two options:
Alternative: 1
The Business needs to invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall assets of the company, increasing the wealth of the business. Spending on R&D would be sunk cost.
2. The business can resell the acquired systems in the market, if it stops working to execute its technique. Quantity invest on the R&D might not be restored, and it will be considered completely sunk cost, if it do not offer potential outcomes.
3. Spending on R&D offer sluggish growth in sales, as it takes very long time to present an item. Nevertheless, acquisitions supply quick results, as it offer the company currently established product, which can be marketed right after the acquisition.
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to face misconception of customers about Business core worths of healthy and healthy products.
2 Large costs on acquisitions than R&D would send out a signal of business's inadequacy of developing ingenious products, and would lead to consumer's frustration also.
3. Large acquisitions than R&D would extend the product line of the company by the products which are currently present in the market, making company not able to present new ingenious items.
Alternative: 2.
The Company ought to spend more on its R&D instead of acquisitions.
1. It would allow the business to produce more ingenious products.
2. It would provide the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted clients by presenting those items which can be used to a totally brand-new market section.
4. Innovative products will provide long term benefits and high market share in long term.
1. It would decrease the earnings margins of the business.
2. In case of failure, the whole spending on R&D would be considered as sunk cost, 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 provide an unfavorable signal to the financiers, and might result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to present brand-new ingenious items with less danger of transforming the spending on R&D into sunk expense.
2. It would supply a positive signal to the financiers, as the overall assets of the company would increase with its significant R&D costs.
3. It would not impact the revenue margins of the business at a large rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the company's overall wealth as well as in terms of ingenious items.
1. Risk of conversion of R&D costs into sunk expense, higher than option 1 lesser than alternative 2.
2. Danger of misconception about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less number of innovative products than alternative 2 and high number of innovative products than alternative 1.

A Bayesian Examines The Lady Tasting Tea Conclusion

RecommendationsBusiness has actually remained the leading market player for more than a years. It has institutionalised its methods and culture to align itself with the marketplace changes and client habits, which has ultimately allowed it to sustain its market share. Business has developed substantial market share and brand name identity in the urban markets, it is advised that the company should focus on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by producing a specific brand name allowance strategy through trade marketing strategies, that draw clear distinction between A Bayesian Examines The Lady Tasting Tea products and other rival items. Moreover, Business ought to utilize its brand image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will allow the business to develop brand equity for newly introduced and already produced items on a greater platform, making the reliable usage of resources and brand image in the market.

A Bayesian Examines The Lady Tasting Tea Exhibits

PESTEL Analysis
Governmental assistance

Transforming criteria of worldwide food.
Improved market share.
Altering understanding towards healthier products
Improvements in R&D as well as QA departments.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest considering that 1000
Greatest after Company with less development than Organisation 5th Cheapest
R&D Spending Highest considering that 2007 Highest possible after Service 3rd Cheapest
Net Profit Margin Highest possible given that 2009 with rapid development from 2002 to 2018 Because of sale of Alcon in 2013. Practically equal to Kraft Foods Unification Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition and also health and wellness aspect Highest possible number of brands with lasting techniques Largest confectionary and also refined foods brand name in the world Biggest milk products and also mineral water brand on the planet
Segmentation Center and also top center degree consumers worldwide Specific customers along with house team Every age and Revenue Consumer Groups Middle as well as upper center degree consumers worldwide
Number of Brands 9th 2nd 8th 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 52469 393472 991372 497979 186482
Net Profit Margin 9.72% 3.52% 18.98% 2.79% 78.89%
EPS (Earning Per Share) 17.71 5.65 1.94 4.56 67.97
Total Asset 718594 251732 723844 875841 18356
Total Debt 65822 96468 45856 66999 72651
Debt Ratio 83% 53% 67% 48% 76%
R&D Spending 9938 6188 5437 4488 9177
R&D Spending as % of Sales 7.14% 8.35% 9.21% 4.56% 4.31%

A Bayesian Examines The Lady Tasting Tea Executive Summary A Bayesian Examines The Lady Tasting Tea Swot Analysis A Bayesian Examines The Lady Tasting Tea Vrio Analysis A Bayesian Examines The Lady Tasting Tea Pestel Analysis
A Bayesian Examines The Lady Tasting Tea Porters Analysis A Bayesian Examines The Lady Tasting Tea Recommendations