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From Correlation To Causation Case Study Analysis

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From Correlation To Causation Case Study Analysis

From Correlation To Causation is presently one of the biggest food chains worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who initially released "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 became rivals initially but later combined in 1905, resulting in the birth of From Correlation To Causation.
Business is now a transnational business. Unlike other multinational business, it has senior executives from different nations and tries to make decisions thinking about the whole world. From Correlation To Causation currently has more than 500 factories worldwide and a network spread throughout 86 nations.

Purpose

The function of From Correlation To Causation Corporation is to improve the quality of life of individuals by playing its part and offering healthy food. It wants to help the world in forming a healthy and much better future for it. It also wants to encourage people to live a healthy life. While making certain that the business is prospering in the long run, that's how it plays its part for a better and healthy future

Vision

From Correlation To Causation's vision is to provide its clients with food that is healthy, high in quality and safe to consume. Business imagines to develop a well-trained labor force which would help the business to grow
.

Mission

From Correlation To Causation's objective is that as currently, it is the leading company in the food market, it believes in 'Great Food, Excellent Life". Its mission is to provide its customers with a range of options that are healthy and finest in taste also. It is concentrated on providing the very best food to its customers throughout the day and night.

Products.

Business has a vast array of items that it uses to its consumers. Its products include food for infants, cereals, dairy items, treats, chocolates, food for pet and mineral water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 workers. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the company has set its objectives and goals. These objectives and objectives are listed below.
• One objective of the business is to reach zero garbage dump status. (Business, aboutus, 2017).
• Another objective of From Correlation To Causation 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 working on is to enhance its packaging in such a method that it would help it to minimize those issues and would likewise guarantee the shipment of high quality of its products to its consumers.
• Meet international requirements of the environment.
• Build a relationship based on trust with its customers, company partners, employees, and government.

Critical Issues

Just Recently, Business Business 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 method. 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%, offered in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business technique is based upon the idea of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing change in the customer preferences about food and making the food stuff much healthier concerning about the health issues.
The vision of this technique is based upon the secret technique i.e. 60/40+ which merely means that the products will have a score of 60% on the basis of taste and 40% is based on its dietary worth. The products will be made with additional nutritional value in contrast to all other products in market gaining it a plus on its nutritional content.
This technique was embraced to bring more tasty plus nutritious foods and drinks in market than ever. In competitors with other business, with an objective of keeping its trust over consumers as Business Company has actually gained more relied on by clients.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing real quantity of spending shows that the sales are increasing at a higher rate than its R&D costs, and allow the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This indication likewise shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of debts. This increasing debt ratio present a threat of default of Business to its financiers and might lead a declining share costs. Therefore, in regards to increasing financial obligation ratio, the company needs to not invest much on R&D and needs to pay its present financial obligations to reduce the risk for financiers.
The increasing threat of investors with increasing financial obligation ratio and declining share prices can be observed by substantial decline of EPS of From Correlation To Causation stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This sluggish development likewise hinder company to additional 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 calculations and Charts given in the Exhibits D and E.

TWOS Analysis


2 analysis can be utilized to obtain different strategies based on the SWOT Analysis provided above. A quick summary of TWOS Analysis is given in Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more ingenious items by big amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the company. It could also offer Business a long term competitive advantage over its rivals.
The global expansion of Business need to be focused on market capturing of developing nations by growth, attracting more consumers through consumer's loyalty. As establishing nations are more populated than developed countries, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisFrom Correlation To Causation should do mindful acquisition and merger of organizations, as it could affect the consumer's and society's perceptions about Business. It must get and merge with those companies which have a market reputation of healthy and nutritious companies. It would improve the perceptions of customers about Business.
Business needs to not only spend its R&D on development, instead of it ought to also concentrate on the R&D costs over evaluation of cost of different nutritious products. This would increase cost performance of its products, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business ought to transfer to not only establishing however likewise to developed nations. It needs to widens its geographical growth. This wide geographical expansion towards developing and established nations would minimize the threat of prospective losses in times of instability in numerous nations. It must expand its circle to various nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

From Correlation To Causation ought to wisely control its acquisitions to avoid the danger of mistaken belief from the consumers about Business. It ought to get and combine with those nations having a goodwill of being a healthy company in the market. This would not only enhance the perception of consumers about Business but would also increase the sales, earnings margins and market share of Business. It would likewise enable the business to use its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based upon 4 elements; age, gender, earnings and profession. Business produces numerous products related to infants i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary items. From Correlation To Causation items are quite budget-friendly by almost all levels, however its significant targeted clients, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its presence in nearly 86 countries. Its geographical segmentation is based upon two main factors i.e. typical income level of the customer in addition to the climate of the area. For example, Singapore Business Business's segmentation 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 personality and lifestyle of the customer. For example, Business 3 in 1 Coffee target those clients whose lifestyle is quite busy and don't have much time.

Behavioral Segmentation

From Correlation To Causation behavioral segmentation is based upon the mindset understanding and awareness of the consumer. Its highly healthy products target those consumers who have a health mindful mindset towards their usages.

From Correlation To Causation Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand, there are two alternatives:
Option: 1
The Business must spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the company, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The company can resell the acquired units in the market, if it stops working to execute its strategy. Amount invest on the R&D could not be restored, and it will be considered totally sunk cost, if it do not give potential results.
3. Spending on R&D offer slow development in sales, as it takes long time to introduce an item. However, acquisitions provide quick results, as it provide the business already established item, which can be marketed right after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to face misunderstanding of consumers about Business core worths of healthy and healthy products.
2 Big spending on acquisitions than R&D would send a signal of business's inefficiency of establishing innovative items, and would results in customer's frustration.
3. Large acquisitions than R&D would extend the line of product of the business by the items which are currently present in the market, making company unable to present new innovative items.
Option: 2.
The Business must spend more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the company to produce more ingenious products.
2. It would offer the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted consumers by presenting those items which can be used to a completely brand-new market section.
4. Ingenious products will provide long term benefits and high market share in long run.
Cons:
1. It would decrease the profit margins of the business.
2. In case of failure, the whole spending on R&D would be thought about as sunk cost, and would impact the business at big. The threat 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 could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to present brand-new innovative products with less risk of transforming the costs on R&D into sunk expense.
2. It would supply a favorable signal to the investors, as the overall possessions of the company would increase with its substantial R&D spending.
3. It would not affect the profit margins of the company 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 company's total wealth along with in regards to innovative items.
Cons:
1. Danger of conversion of R&D costs into sunk cost, higher than alternative 1 lesser than alternative 2.
2. Risk of mistaken belief about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Intro of less variety of innovative items than alternative 2 and high number of ingenious products than alternative 1.

From Correlation To Causation Conclusion

RecommendationsIt has institutionalised its techniques and culture to align itself with the market changes and client habits, which has ultimately allowed it to sustain its market share. Business has established considerable market share and brand name identity in the city markets, it is suggested that the company must focus on the rural areas in terms of establishing brand name commitment, awareness, and equity, such can be done by producing a specific brand name allowance strategy through trade marketing tactics, that draw clear difference in between From Correlation To Causation items and other competitor products.

From Correlation To Causation Exhibits

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

Changing standards of international food.
Enhanced market share.
Changing assumption in the direction of healthier items
Improvements in R&D and also QA divisions.

Intro of E-marketing.
No such impact as it is favourable.
Issues over recycling.

Use resources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 8000
Highest after Service with less development than Company 9th Lowest
R&D Spending Highest possible since 2006 Highest possible after Service 8th Cheapest
Net Profit Margin Highest possible considering that 2009 with quick growth from 2003 to 2014 Due to sale of Alcon in 2017. Nearly equal to Kraft Foods Unification Almost equal to Unilever N/A
Competitive Advantage Food with Nourishment and also health element Greatest variety of brand names with sustainable techniques Largest confectionary and processed foods brand name on the planet Biggest dairy products and bottled water brand in the world
Segmentation Middle and top middle degree customers worldwide Specific customers in addition to home team Any age as well as Income Client Groups Center and top center degree consumers worldwide
Number of Brands 9th 5th 5th 4th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 93617 176389 231126 768637 181786
Net Profit Margin 8.85% 1.43% 77.68% 1.88% 91.94%
EPS (Earning Per Share) 86.98 4.72 1.38 3.14 48.29
Total Asset 623436 491544 228136 379542 47448
Total Debt 61993 48221 17641 99234 26335
Debt Ratio 82% 42% 42% 43% 49%
R&D Spending 9423 7851 4312 1566 9631
R&D Spending as % of Sales 7.83% 7.69% 1.15% 5.58% 4.96%

From Correlation To Causation Executive Summary From Correlation To Causation Swot Analysis From Correlation To Causation Vrio Analysis From Correlation To Causation Pestel Analysis
From Correlation To Causation Porters Analysis From Correlation To Causation Recommendations