Embracing Digital Technology A New Strategic Imperative Case Study Solution

Embracing Digital Technology A New Strategic Imperative is presently among the biggest food cycle worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who first released "FarineLactee"; a combination of flour and milk to feed infants and reduce death rate. At the very same time, the Page brothers from Switzerland also discovered The Anglo-Swiss Condensed Milk Business. The two became rivals initially however later on combined in 1905, resulting in the birth of Embracing Digital Technology A New Strategic Imperative.
Business is now a transnational business. Unlike other international business, it has senior executives from different nations and attempts to make choices considering the whole world. Embracing Digital Technology A New Strategic Imperative presently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The purpose of Embracing Digital Technology A New Strategic Imperative Corporation is to improve the quality of life 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 likewise wants to encourage individuals to live a healthy life. While making certain that the business is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Embracing Digital Technology A New Strategic Imperative's vision is to provide its clients with food that is healthy, high in quality and safe to consume. Business pictures to establish a trained labor force which would help the business to grow
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Mission

Embracing Digital Technology A New Strategic Imperative's mission is that as currently, it is the leading business in the food market, it thinks in 'Great Food, Excellent Life". Its objective is to offer its consumers with a variety of choices that are healthy and best in taste. It is focused on offering the best food to its customers throughout the day and night.

Products.

Business has a wide range of items that it provides to its clients. Its items consist of food for babies, cereals, dairy items, snacks, chocolates, food for pet and mineral water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 workers. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the company has actually laid down its objectives and goals. These goals and objectives are noted below.
• One objective of the company is to reach zero landfill status. It is working toward no waste, where no waste of the factory is landfilled. It motivates its staff members to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of Embracing Digital Technology A New Strategic Imperative is to squander minimum food throughout production. Frequently, the food produced is wasted 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 decrease the above-mentioned problems and would likewise guarantee the shipment of high quality of its items to its customers.
• Meet worldwide requirements of the environment.
• Develop a relationship based upon trust with its customers, service partners, workers, and government.

Critical Issues

Recently, Business Business is focusing more towards the method of NHW and investing more of its earnings on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW technique. The target of the company 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%, given in Exhibit H. There is a need to focus more on the sales then the innovation technology. Otherwise, it may lead to the decreased revenue rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based upon the principle of Nutritious, Health and Wellness (NHW). This strategy deals with the concept to bringing modification in the client choices about food and making the food things much healthier concerning about the health problems.
The vision of this technique is based on the key approach i.e. 60/40+ which simply indicates that the items will have a rating of 60% on the basis of taste and 40% is based upon its nutritional value. The products will be manufactured with additional nutritional worth in contrast to all other items in market acquiring it a plus on its nutritional content.
This technique was embraced to bring more yummy plus healthy foods and beverages in market than ever. In competition with other business, with an objective of retaining its trust over customers as Business Business has gotten more relied on by costumers.

Quantitative Analysis.

R&D Spending 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 spending, and enable the business to more spend on R&D.
Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indicator likewise shows a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its costs on mergers, acquisitions and R&D advancement instead of payment of debts. This increasing financial obligation ratio present a threat of default of Business to its investors and might lead a declining share costs. In terms of increasing financial obligation ratio, the company needs to not spend much on R&D and ought to pay its present financial obligations to decrease the threat for financiers.
The increasing risk of financiers with increasing debt ratio and declining share costs can be observed by big decrease of EPS of Embracing Digital Technology A New Strategic Imperative stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception building of consumers. This sluggish development likewise impede business to further spend on 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 Graphs given in the Exhibits D and E.

TWOS Analysis

2 analysis can be utilized to derive various techniques based upon the SWOT Analysis offered above. A brief summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should present more ingenious products by big amount of R&D Costs and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the business. It could also offer Business a long term competitive advantage over its competitors.
The international growth of Business must be focused on market catching of developing nations by growth, attracting more customers through consumer's loyalty. As developing nations are more populous than developed countries, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Embracing Digital Technology A New Strategic Imperative ought to do mindful acquisition and merger of companies, as it might impact the client's and society's understandings about Business. It must get and merge with those companies which have a market credibility of healthy and nutritious companies. It would enhance the perceptions of consumers about Business.
Business should not only invest its R&D on innovation, rather than it should also concentrate on the R&D costs over evaluation of expense of numerous healthy products. This would increase cost performance of its products, which will lead to increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just establishing however likewise to industrialized nations. It needs to widen 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 nations having a goodwill of being a healthy business in the market. It would likewise make it possible for the company to use its prospective resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based on four aspects; age, gender, income and occupation. Business produces a number of products related to children i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary products. Embracing Digital Technology A New Strategic Imperative products are quite affordable by practically all levels, however its major targeted consumers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in nearly 86 nations. Its geographical segmentation is based upon 2 main factors i.e. average income level of the customer in addition to the environment of the area. For example, Singapore Business Business's division is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and life style of the client. For example, Business 3 in 1 Coffee target those consumers whose life style is rather busy and don't have much time.

Behavioral Segmentation

Embracing Digital Technology A New Strategic Imperative behavioral segmentation is based upon the mindset knowledge and awareness of the client. For instance its extremely healthy items target those consumers who have a health conscious mindset towards their intakes.

Embracing Digital Technology A New Strategic Imperative Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand name, there are 2 alternatives:
Option: 1
The Business must spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The company can resell the gotten systems in the market, if it stops working to execute its strategy. However, amount invest in the R&D could not be restored, and it will be considered completely sunk cost, if it do not provide possible results.
3. Spending on R&D provide sluggish development in sales, as it takes long time to present an item. Acquisitions provide quick outcomes, as it provide the company currently established item, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the company to face misunderstanding of consumers about Business core values of healthy and healthy products.
2 Big costs on acquisitions than R&D would send out a signal of business's inadequacy of establishing ingenious items, and would lead to consumer's dissatisfaction also.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are already present in the market, making business unable to present brand-new ingenious items.
Option: 2.
The Company needs 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 offer the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted consumers by introducing those items which can be used to a completely new market sector.
4. Innovative products will provide long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the business.
2. In case of failure, the entire spending on R&D would be thought about as sunk cost, and would affect the business at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could supply an unfavorable signal to the financiers, and could result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Pros:
1. It would permit the company to present brand-new innovative items with less danger of transforming the costs on R&D into sunk expense.
2. It would provide a favorable signal to the investors, as the general assets of the company would increase with its significant R&D spending.
3. It would not impact the profit 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 general wealth as well as in terms of innovative products.
Cons:
1. Risk of conversion of R&D costs into sunk cost, higher than option 1 lesser than alternative 2.
2. Risk of misconception about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Introduction of less variety of innovative products than alternative 2 and high number of innovative products than alternative 1.

Embracing Digital Technology A New Strategic Imperative Conclusion

It has actually institutionalised its techniques and culture to align itself with the market modifications and consumer habits, which has ultimately permitted it to sustain its market share. Business has actually developed substantial market share and brand identity in the metropolitan markets, it is advised that the business should focus on the rural areas in terms of developing brand loyalty, awareness, and equity, such can be done by producing a specific brand allowance method through trade marketing tactics, that draw clear distinction in between Embracing Digital Technology A New Strategic Imperative products and other competitor items.

Embracing Digital Technology A New Strategic Imperative Exhibits