Menu

E2m Health Services Case Study Analysis

Case Study Solution And Analysis


Home >> Kelloggs >> E2m Health Services >>

E2m Health Services Case Study Solution

Business is currently one of the most significant food chains worldwide. It was established by Henri E2m Health Services in 1866, a German Pharmacist who first launched "FarineLactee"; a mix of flour and milk to feed babies and decrease death rate.
Business is now a global business. Unlike other multinational companies, it has senior executives from various countries and attempts to make choices considering the entire world. E2m Health Services currently has more than 500 factories worldwide and a network spread throughout 86 countries.

Purpose

The purpose of E2m Health Services Corporation is to improve the quality of life of people by playing its part and providing healthy food. It wants to help the world in shaping a healthy and better future for it. It likewise wishes to encourage people to live a healthy life. While making sure that the business is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

E2m Health Services's vision is to supply its clients with food that is healthy, high in quality and safe to consume. It wants to be innovative and simultaneously comprehend the needs and requirements of its consumers. Its vision is to grow quickly and offer products that would please the requirements of each age group. E2m Health Services imagines to develop a trained workforce which would help the company to grow
.

Mission

E2m Health Services's mission is that as currently, it is the leading business in the food industry, it believes in 'Good Food, Great Life". Its mission is to supply its consumers with a variety of choices that are healthy and best in taste. It is concentrated on providing the best food to its consumers throughout the day and night.

Products.

E2m Health Services has a large variety of products that it provides to its consumers. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the business has actually set its goals and goals. These goals and goals are listed below.
• One goal of the business is to reach no land fill status. (Business, aboutus, 2017).
• Another goal of E2m Health Services is to squander minimum food during production. Usually, the food produced is squandered even before it reaches the clients.
• 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 problems and would likewise ensure the delivery of high quality of its products to its customers.
• Meet global requirements of the environment.
• Construct a relationship based on trust with its customers, organisation partners, employees, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its profits on the R&D innovation. The nation 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%, offered in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based upon the principle of Nutritious, Health and Wellness (NHW). This strategy deals with the idea to bringing change in the customer choices about food and making the food stuff much healthier worrying about the health problems.
The vision of this technique is based upon the key technique i.e. 60/40+ which merely implies that the items will have a score of 60% on the basis of taste and 40% is based on its dietary value. The items will be manufactured with additional nutritional worth in contrast to all other products in market getting it a plus on its nutritional material.
This method was adopted to bring more delicious plus healthy foods and beverages in market than ever. In competition with other business, with an intent of retaining its trust over customers as Business Company has actually gained more trusted by clients.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing actual quantity of spending shows that the sales are increasing at a greater rate than its R&D spending, and allow the business to more spend on R&D.
Net Revenue Margin is increasing while R&D as a percentage of sales is declining. This sign also shows a green light to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of debts. This increasing debt ratio present a danger of default of Business to its investors and could lead a decreasing share prices. Therefore, in terms of increasing debt ratio, the company must not invest much on R&D and needs to pay its existing financial obligations to reduce the threat for investors.
The increasing danger of investors with increasing financial obligation ratio and declining share costs can be observed by huge decrease of EPS of E2m Health Services stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow development likewise hinder business 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 computations and Charts given up the Exhibitions D and E.

TWOS Analysis


TWOS analysis can be used to derive various strategies based upon the SWOT Analysis given above. A brief summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business should introduce more innovative items by big amount of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the profit margins for the company. It might also supply Business a long term competitive advantage over its rivals.
The global growth of Business ought to be focused on market recording of establishing nations by growth, drawing in more consumers through client's commitment. As establishing nations are more populated than industrialized countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisE2m Health Services must do cautious acquisition and merger of companies, as it might affect the client's and society's understandings about Business. It ought to get and merge with those companies which have a market track record of healthy and nutritious companies. It would improve the perceptions of customers about Business.
Business should not just invest its R&D on innovation, rather than it ought to likewise concentrate on the R&D costs over examination of cost of numerous nutritious items. This would increase expense performance of its products, which will lead to increasing its sales, due to declining prices, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing however also to industrialized countries. It ought to expand its circle to different nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine with those countries having a goodwill of being a healthy business in the market. It would also allow the company to use its possible resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 aspects; age, gender, earnings and occupation. For instance, Business produces several items associated with children i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary items. E2m Health Services products are rather budget-friendly by nearly all levels, but its significant targeted consumers, in regards to income level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is made up of its presence in nearly 86 nations. Its geographical segmentation is based upon two primary factors i.e. average earnings level of the consumer along with the environment of the area. Singapore Business Company's division 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 consumer. For example, Business 3 in 1 Coffee target those clients whose lifestyle is quite hectic and don't have much time.

Behavioral Segmentation

E2m Health Services behavioral segmentation is based upon the mindset knowledge and awareness of the consumer. Its extremely healthy items target those clients who have a health mindful attitude towards their consumptions.

E2m Health Services Alternatives

In order to sustain the brand in the market and keep the client intact with the brand name, there are 2 options:
Option: 1
The Company needs to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the business, increasing the wealth of the business. Costs on R&D would be sunk cost.
2. The business can resell the gotten units in the market, if it fails to implement its method. Amount invest on the R&D could not be revived, and it will be considered completely sunk expense, if it do not provide prospective results.
3. Investing in R&D supply sluggish development in sales, as it takes very long time to introduce a product. However, acquisitions offer fast results, as it offer the company currently established item, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's worths like Kraftz foods can lead the business to deal with misconception of customers about Business core values of healthy and nutritious products.
2 Big spending on acquisitions than R&D would send out a signal of company's inadequacy of developing innovative products, and would results in customer's frustration also.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are already present in the market, making company unable to introduce brand-new innovative products.
Option: 2.
The Company needs to spend more on its R&D rather than acquisitions.
Pros:
1. It would allow the company to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would allow the company to increase its targeted clients by introducing those items which can be used to a totally brand-new market section.
4. Ingenious products will offer long term benefits and high market share in long run.
Cons:
1. It would decrease the revenue margins of the company.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would impact the company at big. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer an unfavorable signal to the investors, and might result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would permit the company to present brand-new innovative items with less danger of transforming the spending on R&D into sunk expense.
2. It would offer a positive signal to the financiers, as the total 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 offer the business a strong long term market position in terms of the business's total wealth along with in regards to ingenious items.
Cons:
1. Threat of conversion of R&D costs into sunk cost, greater than alternative 1 lesser than alternative 2.
2. Threat of misconception about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less variety of ingenious items than alternative 2 and high number of ingenious items than alternative 1.

E2m Health Services Conclusion

RecommendationsBusiness has stayed the leading market gamer for more than a years. It has institutionalized its methods and culture to align itself with the market changes and consumer behavior, which has eventually allowed it to sustain its market share. Business has actually established substantial market share and brand name identity in the metropolitan markets, it is suggested that the company ought to focus on the rural locations in terms of developing brand name commitment, awareness, and equity, such can be done by producing a specific brand name allocation method through trade marketing strategies, that draw clear distinction between E2m Health Services items and other rival products. Moreover, Business should take advantage of its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will allow the company to establish brand name equity for freshly introduced and currently produced products on a higher platform, making the effective use of resources and brand name image in the market.

E2m Health Services 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 assumption in the direction of healthier products
Improvements in R&D and QA divisions.

Introduction of E-marketing.
No such impact as it is beneficial.
Concerns over recycling.

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 9000
Highest possible after Business with much less growth than Business 9th Most affordable
R&D Spending Greatest because 2009 Greatest after Company 1st Cheapest
Net Profit Margin Highest given that 2005 with fast development from 2007 to 2013 As a result of sale of Alcon in 2015. Nearly equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition and health and wellness aspect Greatest number of brand names with sustainable practices Largest confectionary and refined foods brand worldwide Biggest milk items as well as mineral water brand name in the world
Segmentation Center as well as upper center level customers worldwide Specific consumers in addition to home group Every age as well as Revenue Client Teams Center as well as top middle level consumers worldwide
Number of Brands 8th 6th 5th 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 36876 527693 116128 464354 189452
Net Profit Margin 7.61% 2.27% 16.38% 1.55% 64.74%
EPS (Earning Per Share) 56.68 7.41 7.64 9.39 31.57
Total Asset 567997 921566 922528 693935 47939
Total Debt 67416 83433 63611 57783 39722
Debt Ratio 83% 12% 71% 29% 33%
R&D Spending 4356 8917 7681 3425 8262
R&D Spending as % of Sales 1.87% 5.63% 8.49% 5.21% 8.68%

E2m Health Services Executive Summary E2m Health Services Swot Analysis E2m Health Services Vrio Analysis E2m Health Services Pestel Analysis
E2m Health Services Porters Analysis E2m Health Services Recommendations