Concordia Casting Co Case Study Solution

Business is currently one of the greatest food chains worldwide. It was founded by Henri Concordia Casting Co in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed infants and decrease mortality rate.
Business is now a transnational business. Unlike other international companies, it has senior executives from various countries and tries to make decisions thinking about the whole world. Concordia Casting Co presently has more than 500 factories worldwide and a network spread across 86 nations.

Purpose

The function of Concordia Casting Co Corporation is to boost the lifestyle of people by playing its part and providing healthy food. It wishes to help the world in forming a healthy and better future for it. It also wishes to encourage individuals to live a healthy life. While making sure that the company is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

Concordia Casting Co's vision is to supply its customers with food that is healthy, high in quality and safe to eat. It wishes to be innovative and at the same time comprehend the needs and requirements of its clients. Its vision is to grow quick and offer products that would please the requirements of each age. Concordia Casting Co imagines to establish a trained workforce which would help the business to grow
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Mission

Concordia Casting Co's mission is that as currently, it is the leading company in the food industry, it thinks in 'Great Food, Excellent Life". Its mission is to offer its customers with a range of options that are healthy and best in taste too. It is concentrated on supplying the best food to its consumers throughout the day and night.

Products.

Business has a wide range of items that it uses to its clients. Its products consist of food for infants, cereals, dairy products, treats, chocolates, food for pet and bottled water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 employees. In 2011, Business was listed as the most rewarding organization.

Goals and Objectives

• Remembering the vision and mission of the corporation, the company has laid down its goals and goals. These goals and objectives are noted below.
• One objective of the business is to reach zero garbage dump status. It is pursuing absolutely no waste, where no waste of the factory is landfilled. It encourages its workers to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Concordia Casting Co is to waste minimum food during production. Most often, the food produced is squandered even before it reaches the clients.
• Another thing that Business is dealing with is to enhance its packaging in such a method that it would help it to lower the above-mentioned issues and would likewise guarantee the delivery of high quality of its products to its customers.
• Meet worldwide requirements of the environment.
• Develop a relationship based upon trust with its consumers, company partners, workers, and federal government.

Critical Issues

Just Recently, Business Company is focusing more towards the strategy of NHW and investing more of its revenues on the R&D technology. The nation 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 higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Display H. There is a need to focus more on the sales then the development technology. Otherwise, it may lead to the declined profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based on the principle of Nutritious, Health and Wellness (NHW). This strategy handles the concept to bringing change in the consumer choices about food and making the food stuff healthier concerning about the health problems.
The vision of this strategy is based on the key approach i.e. 60/40+ which merely suggests that the items will have a rating of 60% on the basis of taste and 40% is based upon its dietary value. The products will be manufactured with extra nutritional value in contrast to all other products in market gaining it a plus on its nutritional material.
This method was embraced to bring more yummy plus healthy foods and beverages in market than ever. In competitors with other companies, with an intent of keeping its trust over customers as Business Company has gotten more trusted by costumers.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing real amount of costs reveals that the sales are increasing at a greater rate than its R&D costs, and permit the business to more spend on R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is decreasing. This indicator also shows a green light 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 development rather than payment of debts. This increasing debt ratio position a hazard of default of Business to its investors and could lead a declining share costs. In terms of increasing financial obligation ratio, the firm needs to not invest much on R&D and ought to pay its existing debts to decrease the risk for financiers.
The increasing danger of investors with increasing debt ratio and declining share prices can be observed by big decline of EPS of Concordia Casting Co stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow development also impede business 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 estimations and Charts given in the Exhibits D and E.

TWOS Analysis

TWOS analysis can be utilized to derive numerous methods based on the SWOT Analysis given above. A quick summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business needs to present more ingenious products by large quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the revenue margins for the business. It might likewise provide Business a long term competitive benefit over its competitors.
The international expansion of Business must be focused on market catching of establishing nations by expansion, bring in more clients through customer's commitment. As developing countries are more populated than industrialized countries, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Concordia Casting Co should do careful acquisition and merger of organizations, as it could impact the customer's and society's perceptions about Business. It should acquire and combine with those business which have a market reputation of healthy and nutritious business. It would enhance the understandings of customers about Business.
Business must not just spend its R&D on innovation, rather than it ought to likewise focus on the R&D spending over evaluation of cost of different healthy products. This would increase cost efficiency of its products, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business must move to not only developing but also to developed countries. It ought to widen its circle to numerous nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must acquire and merge with those countries having a goodwill of being a healthy company in the market. It would also enable the company to use its possible resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 factors; age, gender, income and profession. Business produces several products related to babies i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Concordia Casting Co items are rather affordable by nearly all levels, but its major targeted clients, in terms of income level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is made up of its existence in nearly 86 countries. Its geographical division is based upon 2 primary elements i.e. typical earnings level of the customer in addition to the climate of the region. For example, Singapore Business Business's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and lifestyle of the customer. For example, Business 3 in 1 Coffee target those consumers whose life style is quite hectic and don't have much time.

Behavioral Segmentation

Concordia Casting Co behavioral segmentation is based upon the mindset knowledge and awareness of the consumer. For instance its extremely healthy products target those consumers who have a health mindful mindset towards their consumptions.

Concordia Casting Co Alternatives

In order to sustain the brand name in the market and keep the client undamaged with the brand, there are 2 choices:
Alternative: 1
The Business needs to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the business, increasing the wealth of the company. Spending on R&D would be sunk cost.
2. The company can resell the gotten systems in the market, if it stops working to execute its strategy. Nevertheless, amount spend on the R&D could not be restored, and it will be considered totally sunk expense, if it do not give potential outcomes.
3. Spending on R&D provide sluggish development in sales, as it takes long time to introduce a product. Acquisitions supply quick results, as it supply the company currently developed item, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the company to deal with misconception of customers about Business core values of healthy and healthy products.
2 Large spending on acquisitions than R&D would send a signal of company's inadequacy of establishing 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 products which are already present in the market, making business unable to present brand-new ingenious items.
Option: 2.
The Business should spend more on its R&D instead of acquisitions.
Pros:
1. It would enable the business to produce more ingenious items.
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 offered to a completely brand-new market sector.
4. Ingenious items will provide long term advantages and high market share in long run.
Cons:
1. It would reduce the earnings margins of the business.
2. In case of failure, the entire costs on R&D would be thought about as sunk expense, and would affect the company at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which could supply a negative signal to the investors, and could result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with considerable costs on in R&D Program.
Pros:
1. It would permit the company to introduce new innovative items with less risk of converting the costs on R&D into sunk cost.
2. It would supply a positive signal to the financiers, as the overall assets of the business would increase with its considerable R&D costs.
3. It would not affect the profit margins of the business at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the business's total wealth along with in regards to innovative items.
Cons:
1. Risk of conversion of R&D costs into sunk cost, greater than alternative 1 lesser than alternative 2.
2. Risk of misconception about the acquisitions, greater than alternative 2 and lower than alternative 1.
3. Introduction of less number of innovative products than alternative 2 and high number of ingenious products than alternative 1.

Concordia Casting Co Conclusion

Business has actually remained the leading market player for more than a years. It has actually institutionalized its techniques and culture to align itself with the market changes and customer habits, which has actually eventually permitted it to sustain its market share. Business has established substantial market share and brand identity in the city markets, it is advised that the business must focus on the rural areas in terms of developing brand name loyalty, awareness, and equity, such can be done by producing a specific brand name allocation method through trade marketing strategies, that draw clear difference between Concordia Casting Co products and other rival products. Additionally, 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 categories such as nutrition. This will enable the company to establish brand equity for freshly presented and currently produced products on a higher platform, making the efficient use of resources and brand image in the market.

Concordia Casting Co Exhibits