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Concordia Casting Co Case Study Solution

Case Study Solution And Analysis


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Business is presently one of the greatest food chains worldwide. It was established by Henri Concordia Casting Co in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix of flour and milk to feed infants and decrease death rate.
Business is now a transnational company. Unlike other international business, it has senior executives from different countries and attempts to make decisions considering the entire world. Concordia Casting Co currently has more than 500 factories around the world and a network spread across 86 countries.

Purpose

The function of Business Corporation is to improve the quality of life of individuals by playing its part and supplying healthy food. While making sure that the business is being successful 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 provide its clients 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

Concordia Casting Co's mission is that as currently, it is the leading business in the food industry, it thinks in 'Excellent Food, Good Life". Its mission is to provide its customers with a variety of options that are healthy and best in taste as well. It is concentrated on providing the very best food to its customers throughout the day and night.

Products.

Business has a wide variety of products that it provides to its clients. Its items include food for infants, cereals, dairy products, treats, chocolates, food for family pet and bottled water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 staff members. In 2011, Business was listed as the most gainful organization.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the company has actually set its objectives and objectives. These goals and objectives are noted below.
• One goal of the company is to reach no land fill status. (Business, aboutus, 2017).
• Another objective of Concordia Casting Co is to waste minimum food throughout production. Most often, the food produced is squandered even before it reaches the customers.
• Another thing that Business is dealing with is to improve its product packaging in such a method that it would help it to lower those issues and would likewise guarantee the shipment of high quality of its products to its customers.
• Meet international standards of the environment.
• Construct a relationship based upon trust with its consumers, service partners, workers, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the strategy of NHW and investing more of its profits on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW method. The target of the company is not achieved as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based upon the concept of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing modification in the consumer choices about food and making the food stuff much healthier worrying about the health problems.
The vision of this strategy is based on the secret approach i.e. 60/40+ which just implies that the products will have a rating of 60% on the basis of taste and 40% is based on its dietary value. The items will be produced with extra dietary value in contrast to all other products in market gaining it a plus on its dietary content.
This method was adopted to bring more delicious plus healthy foods and beverages in market than ever. In competitors with other companies, with an objective of maintaining its trust over consumers as Business Company has gotten more trusted by clients.

Quantitative Analysis.

R&D Spending as a percentage of sales are decreasing with increasing real amount of spending shows that the sales are increasing at a higher rate than its R&D costs, and enable the business to more spend on R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This sign likewise shows a green light to the R&D spending, mergers and acquisitions.
Debt ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing debt ratio position a hazard of default of Business to its financiers and might lead a declining share prices. In terms of increasing debt ratio, the firm ought to not spend much on R&D and ought to pay its current financial obligations to reduce the risk for investors.
The increasing danger of financiers with increasing debt ratio and decreasing share costs can be observed by big decrease of EPS of Concordia Casting Co stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of consumers. This sluggish development also hinder business to further invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Charts given up the Displays D and E.

TWOS Analysis


TWOS analysis can be utilized to derive various methods based on the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business should present more innovative items by large amount of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the revenue margins for the company. It could likewise provide Business a long term competitive benefit over its competitors.
The international expansion of Business ought to be focused on market capturing of developing nations by growth, drawing in more consumers through client's commitment. As establishing countries are more populous than developed countries, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisConcordia Casting Co must do mindful acquisition and merger of companies, as it could impact the client's and society's understandings about Business. It must acquire 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 needs to not just invest its R&D on innovation, instead of it needs to likewise focus on the R&D spending over evaluation of cost of numerous healthy products. This would increase expense performance of its products, which will result in increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business should transfer to not only developing however also to developed nations. It ought to widens its geographical expansion. This large geographical expansion towards establishing and developed countries would minimize the risk of prospective losses in times of instability in different countries. It must broaden its circle to numerous countries like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It ought to acquire and combine with those countries having a goodwill of being a healthy business in the market. It would also allow the business to utilize its possible resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW strategy development.

Segmentation Analysis

Demographic Segmentation

The demographic division of Business is based upon four aspects; age, gender, income and occupation. For example, Business produces numerous products related to infants i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary items. Concordia Casting Co products are quite affordable by practically all levels, but its major targeted clients, in terms of income level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is composed of its presence in nearly 86 nations. Its geographical division is based upon two primary aspects i.e. typical earnings level of the customer as well as the environment of the area. Singapore Business Business's segmentation is done on the basis of the weather 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 busy and don't have much time.

Behavioral Segmentation

Concordia Casting Co behavioral segmentation is based upon the mindset understanding and awareness of the consumer. For instance its highly healthy products target those customers who have a health mindful mindset towards their intakes.

Concordia Casting Co Alternatives

In order to sustain the brand name in the market and keep the client intact with the brand, there are two choices:
Option: 1
The Business ought to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall assets of the business, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The business can resell the gotten units in the market, if it stops working to execute its strategy. However, quantity spend on the R&D could not be restored, and it will be considered completely sunk cost, if it do not provide prospective outcomes.
3. Spending on R&D offer slow growth in sales, as it takes very long time to introduce an item. Acquisitions supply quick results, as it offer the company already developed product, 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 company to face misunderstanding of customers about Business core values of healthy and healthy products.
2 Large spending on acquisitions than R&D would send out a signal of company's ineffectiveness of establishing ingenious items, and would lead to consumer's dissatisfaction also.
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 unable to present new ingenious items.
Alternative: 2.
The Business ought to invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the company to produce more ingenious items.
2. It would offer the business a strong competitive position in the market.
3. It would allow the business to increase its targeted customers by introducing those products which can be provided to a totally brand-new market segment.
4. Innovative products will provide long term advantages and high market share in long run.
Cons:
1. It would decrease the earnings margins of the company.
2. In case of failure, the entire spending on R&D would be thought about as sunk cost, and would impact the business at large. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could provide an unfavorable signal to the financiers, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the company to present brand-new ingenious items with less risk of transforming the costs on R&D into sunk expense.
2. It would offer a positive signal to the financiers, as the overall possessions of the company would increase with its significant R&D costs.
3. It would not affect the earnings margins of the business at a big rate as compare to alternative 2.
4. It would provide the business a strong long term market position in regards to the business's overall wealth as well as in regards to ingenious products.
Cons:
1. Threat of conversion of R&D spending into sunk cost, greater than option 1 lesser than alternative 2.
2. Danger of misconception about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Introduction of less number of innovative items than alternative 2 and high variety of ingenious items than alternative 1.

Concordia Casting Co Conclusion

RecommendationsIt has actually institutionalised its strategies and culture to align itself with the market changes and client habits, which has ultimately enabled it to sustain its market share. Business has established considerable market share and brand identity in the metropolitan markets, it is suggested that the business ought to focus on the rural locations in terms of establishing brand loyalty, awareness, and equity, such can be done by producing a particular brand allotment technique through trade marketing tactics, that draw clear difference between Concordia Casting Co items and other competitor products.

Concordia Casting Co Exhibits

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

Transforming criteria of global food.
Enhanced market share.
Changing understanding towards healthier products
Improvements in R&D as well as QA departments.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible since 4000
Highest after Service with less growth than Service 4th Cheapest
R&D Spending Highest considering that 2002 Greatest after Organisation 6th Lowest
Net Profit Margin Highest since 2001 with quick development from 2007 to 2011 Due to sale of Alcon in 2015. Almost equal to Kraft Foods Incorporation Practically equal to Unilever N/A
Competitive Advantage Food with Nourishment and also wellness aspect Greatest number of brands with sustainable techniques Biggest confectionary and also processed foods brand name worldwide Largest dairy items as well as mineral water brand name on the planet
Segmentation Center and also upper middle level customers worldwide Specific customers along with family group All age and Earnings Consumer Teams Middle and top center degree consumers worldwide
Number of Brands 5th 8th 6th 9th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 18666 291273 376489 999775 863876
Net Profit Margin 5.89% 9.42% 65.71% 6.35% 29.55%
EPS (Earning Per Share) 96.86 8.87 6.96 9.76 54.76
Total Asset 915538 493639 978151 287356 64497
Total Debt 86715 58351 23159 91329 35427
Debt Ratio 99% 95% 57% 26% 42%
R&D Spending 1374 6578 6477 1693 2291
R&D Spending as % of Sales 8.26% 6.22% 4.84% 9.68% 2.96%

Concordia Casting Co Executive Summary Concordia Casting Co Swot Analysis Concordia Casting Co Vrio Analysis Concordia Casting Co Pestel Analysis
Concordia Casting Co Porters Analysis Concordia Casting Co Recommendations