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Embracing Digital Technology A New Strategic Imperative Case Study Solution

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Embracing Digital Technology A New Strategic Imperative Case Study Analysis

Embracing Digital Technology A New Strategic Imperative is presently among the greatest food chains worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who first launched "FarineLactee"; a mix of flour and milk to feed infants and decrease mortality rate. At the same time, the Page siblings from Switzerland also found The Anglo-Swiss Condensed Milk Company. The 2 ended up being competitors at first however later merged in 1905, leading to the birth of Embracing Digital Technology A New Strategic Imperative.
Business is now a multinational business. Unlike other international business, it has senior executives from different countries and attempts to make decisions considering the whole world. Embracing Digital Technology A New Strategic Imperative currently has more than 500 factories around the world and a network spread throughout 86 nations.

Purpose

The function of Embracing Digital Technology A New Strategic Imperative Corporation is to enhance the lifestyle of individuals by playing its part and supplying healthy food. It wishes to help the world in shaping a healthy and better future for it. It likewise wants to encourage individuals to live a healthy life. While making certain that the company is succeeding 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 eat. It wishes to be ingenious and concurrently comprehend the needs and requirements of its clients. Its vision is to grow fast and provide items that would please the needs of each age group. Embracing Digital Technology A New Strategic Imperative imagines to establish a well-trained labor force which would help the business to grow
.

Mission

Embracing Digital Technology A New Strategic Imperative's mission is that as currently, it is the leading company in the food market, it thinks in 'Good Food, Great Life". Its objective is to provide its consumers with a range of options that are healthy and best in taste. It is concentrated on offering the best food to its consumers throughout the day and night.

Products.

Business has a wide range of products that it uses to its consumers. Its items include food for babies, cereals, dairy items, treats, chocolates, food for family pet and mineral water. It has around 4 hundred and fifty (450) factories worldwide and around 328,000 staff members. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the business has actually set its objectives and goals. These goals and goals are listed below.
• One objective of the company is to reach no land fill status. It is working toward zero waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Embracing Digital Technology A New Strategic Imperative is to squander minimum food throughout production. Usually, the food produced is lost even before it reaches the clients.
• Another thing that Business is working on is to enhance its product packaging in such a way that it would help it to minimize those problems and would likewise ensure the shipment of high quality of its items to its consumers.
• Meet global standards of the environment.
• Build a relationship based upon trust with its consumers, organisation partners, workers, and government.

Critical Issues

Recently, Business Company is focusing more towards the technique 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 method. However, the target of the business is not achieved as the sales were expected to grow greater at the rate of 10% each year and the operating margins to increase by 20%, given in Exhibit H. There is a requirement to focus more on the sales then the development technology. Otherwise, it may result in the decreased earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business technique is based upon the idea of Nutritious, Health and Wellness (NHW). This technique deals with the idea to bringing modification in the consumer preferences about food and making the food stuff healthier concerning about the health issues.
The vision of this technique is based upon the secret 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 dietary worth. The products will be manufactured with extra dietary worth in contrast to all other products in market acquiring it a plus on its dietary material.
This method was embraced to bring more yummy plus nutritious foods and drinks in market than ever. In competition with other business, with an intent of retaining its trust over consumers as Business Company has acquired more trusted by customers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing actual quantity of spending 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 portion of sales is declining. This indicator likewise shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its costs on mergers, acquisitions and R&D advancement rather than payment of financial obligations. This increasing financial obligation ratio posture a hazard of default of Business to its investors and might lead a decreasing share costs. In terms of increasing financial obligation ratio, the firm ought to not invest much on R&D and should pay its present debts to reduce the danger for financiers.
The increasing danger of investors with increasing debt ratio and decreasing share costs can be observed by huge decline of EPS of Embracing Digital Technology A New Strategic Imperative stocks.
The sales development of company is likewise low as compare to its mergers and acquisitions due to slow understanding building of customers. This sluggish growth also impede business to more 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 calculations and Charts given up the Exhibitions D and E.

TWOS Analysis


2 analysis can be utilized to derive numerous techniques 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 ought to introduce more ingenious products by large quantity of R&D Spending and mergers and acquisitions. It could increase the market share of Business and increase the revenue margins for the company. It could also offer Business a long term competitive benefit over its rivals.
The global expansion of Business should be concentrated on market recording of developing nations by growth, drawing in more customers through customer's commitment. As developing nations are more populated than developed nations, it could increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisEmbracing Digital Technology A New Strategic Imperative needs to do mindful acquisition and merger of companies, as it might impact the consumer's and society's understandings about Business. It must obtain and combine with those business which have a market track record of healthy and nutritious business. It would enhance the understandings of customers about Business.
Business needs to not just spend its R&D on innovation, rather than it needs to likewise concentrate on the R&D costs over evaluation of cost of various nutritious items. This would increase expense effectiveness of its products, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business should move to not just developing but also to industrialized nations. It should broadens its geographical expansion. This wide geographical expansion towards developing and developed nations would lower the danger of potential losses in times of instability in numerous nations. It should broaden its circle to different nations like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Embracing Digital Technology A New Strategic Imperative should carefully manage its acquisitions to avoid the risk of misconception from the consumers about Business. It ought to obtain and combine with those countries having a goodwill of being a healthy business in the market. This would not only improve the understanding of customers about Business but would likewise increase the sales, revenue margins and market share of Business. It would also make it possible for the business to utilize its potential resources efficiently on its other operations instead of acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based upon four elements; age, gender, income and profession. For instance, Business produces a number of items related to babies i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary items. Embracing Digital Technology A New Strategic Imperative products are quite cost effective by nearly all levels, however its significant targeted customers, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is composed of its existence in nearly 86 countries. Its geographical division is based upon 2 main elements i.e. average earnings level of the consumer in addition to the climate of the region. Singapore Business Business's segmentation 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 character and lifestyle of the customer. For instance, Business 3 in 1 Coffee target those clients whose life style is quite hectic and don't have much time.

Behavioral Segmentation

Embracing Digital Technology A New Strategic Imperative behavioral segmentation is based upon the attitude knowledge and awareness of the customer. Its highly healthy items target those clients who have a health mindful mindset towards their consumptions.

Embracing Digital Technology A New Strategic Imperative Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand, there are 2 options:
Option: 1
The Company must invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the business. Costs on R&D would be sunk expense.
2. The business can resell the gotten systems in the market, if it fails to implement its method. Amount invest on the R&D could not be revived, and it will be thought about completely sunk expense, if it do not give possible results.
3. Spending on R&D offer slow development in sales, as it takes long period of time to introduce an item. Acquisitions provide fast outcomes, as it supply the business currently established item, which can be marketed quickly after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the company to face misunderstanding of consumers about Business core values of healthy and healthy products.
2 Large costs on acquisitions than R&D would send a signal of company's inadequacy of developing ingenious items, and would outcomes in customer's dissatisfaction.
3. Big acquisitions than R&D would extend the product line of the company by the products which are currently present in the market, making company unable to introduce brand-new innovative items.
Option: 2.
The Company needs to invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the business to produce more innovative items.
2. It would offer the company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those items which can be used to a completely new market section.
4. Innovative products will offer long term advantages and high market share in long run.
Cons:
1. It would reduce the profit margins of the business.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would impact the business at big. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could provide an unfavorable signal to the investors, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to present brand-new innovative products with less threat of converting the costs on R&D into sunk cost.
2. It would offer a favorable signal to the investors, as the general properties of the company would increase with its significant R&D costs.
3. It would not impact the profit 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 terms of the business's total wealth along with in terms of innovative products.
Cons:
1. Risk of conversion of R&D spending into sunk cost, greater than option 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less variety of ingenious products than alternative 2 and high variety of innovative items than alternative 1.

Embracing Digital Technology A New Strategic Imperative Conclusion

RecommendationsBusiness has remained the leading market player for more than a decade. It has institutionalized its strategies and culture to align itself with the market changes and client behavior, which has eventually enabled it to sustain its market share. Business has actually established substantial market share and brand name identity in the city markets, it is recommended that the business needs to focus on the rural locations in terms of establishing brand commitment, awareness, and equity, such can be done by producing a particular brand name allocation technique through trade marketing techniques, that draw clear difference between Embracing Digital Technology A New Strategic Imperative products and other rival products. Embracing Digital Technology A New Strategic Imperative must leverage 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 develop brand equity for newly presented and already produced items on a higher platform, making the efficient usage of resources and brand image in the market.

Embracing Digital Technology A New Strategic Imperative Exhibits

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

Altering criteria of worldwide food.
Enhanced market share.
Altering assumption towards much healthier products
Improvements in R&D and also QA divisions.

Introduction of E-marketing.
No such influence as it is good.
Worries over recycling.

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest because 5000
Greatest after Company with much less development than Company 6th Most affordable
R&D Spending Highest possible given that 2009 Greatest after Business 6th Cheapest
Net Profit Margin Highest because 2006 with quick growth from 2005 to 2017 As a result of sale of Alcon in 2011. Nearly equal to Kraft Foods Consolidation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as wellness factor Highest possible number of brands with sustainable techniques Largest confectionary and also processed foods brand worldwide Largest dairy products as well as mineral water brand on the planet
Segmentation Middle as well as upper middle degree consumers worldwide Private customers along with house team Every age and Income Client Groups Center and also top middle level consumers worldwide
Number of Brands 1st 5th 2nd 6th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 51521 171612 393272 381447 161917
Net Profit Margin 3.83% 4.63% 23.56% 9.37% 87.27%
EPS (Earning Per Share) 38.27 3.88 7.71 4.88 49.97
Total Asset 139755 282318 713547 826776 73538
Total Debt 66562 74578 58359 18471 51112
Debt Ratio 78% 75% 57% 47% 11%
R&D Spending 5117 1227 6834 6945 4988
R&D Spending as % of Sales 4.66% 6.19% 7.28% 2.83% 9.46%

Embracing Digital Technology A New Strategic Imperative Executive Summary Embracing Digital Technology A New Strategic Imperative Swot Analysis Embracing Digital Technology A New Strategic Imperative Vrio Analysis Embracing Digital Technology A New Strategic Imperative Pestel Analysis
Embracing Digital Technology A New Strategic Imperative Porters Analysis Embracing Digital Technology A New Strategic Imperative Recommendations