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Mercedes Benz India Case Study Solution

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Mercedes Benz India Case Study Solution

Mercedes Benz India is presently among the greatest food cycle worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed babies and reduce death rate. At the very same time, the Page siblings from Switzerland also found The Anglo-Swiss Condensed Milk Company. The 2 became rivals in the beginning however later merged in 1905, leading to the birth of Mercedes Benz India.
Business is now a global company. Unlike other international companies, it has senior executives from different countries and attempts to make decisions thinking about the entire world. Mercedes Benz India currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The purpose of Mercedes Benz India Corporation is to enhance the quality of life of individuals by playing its part and providing healthy food. It wants to help the world in shaping a healthy and much better future for it. It also wishes to motivate people to live a healthy life. While making sure that the company is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

Mercedes Benz India's vision is to supply its customers with food that is healthy, high in quality and safe to consume. Business visualizes to establish a well-trained labor force which would help the business to grow
.

Mission

Mercedes Benz India's mission is that as currently, it is the leading company in the food industry, it thinks in 'Good Food, Excellent Life". Its mission is to supply its consumers with a variety of choices that are healthy and finest in taste. It is concentrated on offering the best food to its consumers throughout the day and night.

Products.

Mercedes Benz India has a large range of items that it offers to its consumers. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the company has actually put down its objectives and objectives. These objectives and goals are listed below.
• One goal of the business is to reach zero land fill status. It is working toward zero waste, where no waste of the factory is landfilled. It encourages its staff members to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another objective of Mercedes Benz India is to squander minimum food throughout production. Frequently, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is working on is to enhance its product packaging in such a method that it would help it to minimize those problems and would likewise guarantee the shipment of high quality of its items to its consumers.
• Meet global requirements of the environment.
• Build a relationship based upon trust with its customers, business partners, staff members, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the method of NHW and investing more of its earnings on the R&D technology. The nation is investing more on acquisitions and mergers to support its NHW technique. However, the target of the business is not attained as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given up Exhibit H. There is a need to focus more on the sales then the innovation technology. Otherwise, it may lead to the decreased earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based on the principle of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing modification in the client choices about food and making the food things healthier concerning about the health issues.
The vision of this technique is based upon the secret approach i.e. 60/40+ which simply suggests that the products will have a rating of 60% on the basis of taste and 40% is based on its dietary worth. The products will be produced with extra nutritional worth in contrast to all other products in market acquiring it a plus on its dietary content.
This strategy was adopted to bring more delicious plus nutritious foods and beverages in market than ever. In competitors with other companies, with an objective of retaining its trust over clients as Business Business has actually gained more relied on by customers.

Quantitative Analysis.

R&D Costs as a portion of sales are decreasing with increasing real quantity of costs reveals that the sales are increasing at a higher rate than its R&D spending, and permit the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This indicator likewise shows a green light to the R&D costs, mergers and acquisitions.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing financial obligation ratio present a risk of default of Business to its financiers and could lead a declining share prices. Therefore, in terms of increasing financial obligation ratio, the company should not spend much on R&D and ought to pay its existing debts to decrease the threat for investors.
The increasing danger of investors with increasing financial obligation ratio and decreasing share rates can be observed by big decrease of EPS of Mercedes Benz India stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow growth also prevent company 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 calculations and Graphs given up the Displays D and E.

TWOS Analysis


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

Strategies to exploit Opportunities using Strengths

Business ought to present more ingenious products by big quantity of R&D Spending and mergers and acquisitions. It might 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 competitors.
The international growth of Business should be focused on market catching of developing countries by expansion, bring in more consumers through client's loyalty. As developing nations are more populous than industrialized countries, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMercedes Benz India must do cautious acquisition and merger of companies, as it could affect the customer's and society's perceptions about Business. It should obtain and combine with those companies which have a market track record of healthy and nutritious companies. It would improve the perceptions of customers about Business.
Business needs to not just invest its R&D on innovation, instead of it should also concentrate on the R&D costs over assessment of expense of numerous nutritious items. This would increase expense performance of its items, which will result in increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business should transfer to not just developing however likewise to industrialized nations. It should widens its geographical growth. This large geographical growth towards establishing and developed countries would reduce the risk of prospective losses in times of instability in numerous countries. It should expand its circle to different nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It needs to get and merge with those nations having a goodwill of being a healthy company in the market. It would also allow the business to use its possible resources effectively on its other operations rather than acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based upon four factors; age, gender, income and occupation. For example, Business produces numerous items connected to babies i.e. Cerelac, Nido, etc. and associated to grownups i.e. confectionary products. Mercedes Benz India items 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 composed of its existence in nearly 86 nations. Its geographical division is based upon 2 primary factors i.e. typical earnings level of the consumer in addition to the climate of the area. For example, Singapore Business Business's division is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and life style of the customer. For instance, Business 3 in 1 Coffee target those clients whose lifestyle is rather hectic and do not have much time.

Behavioral Segmentation

Mercedes Benz India behavioral segmentation is based upon the attitude knowledge and awareness of the consumer. For instance its highly nutritious products target those consumers who have a health conscious mindset towards their intakes.

Mercedes Benz India Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand name, there are two choices:
Option: 1
The Company must invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total assets of the company, increasing the wealth of the business. Costs on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it stops working to execute its strategy. Amount spend on the R&D could not be restored, and it will be considered entirely sunk cost, if it do not offer possible outcomes.
3. Spending on R&D offer slow development in sales, as it takes long period of time to introduce an item. Nevertheless, acquisitions provide fast results, as it supply the business currently established product, which can be marketed right after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the business to face misunderstanding of customers about Business core worths of healthy and nutritious items.
2 Big spending on acquisitions than R&D would send out a signal of company's ineffectiveness of developing ingenious products, and would results in consumer's frustration too.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are currently present in the market, making company not able to introduce brand-new innovative products.
Alternative: 2.
The Business ought to 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 company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by presenting those items which can be offered to a totally brand-new market segment.
4. Ingenious products will offer long term benefits and high market share in long term.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the whole spending on R&D would be considered as sunk cost, and would affect the business at large. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could provide an unfavorable signal to the investors, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce new innovative items with less threat of converting the spending on R&D into sunk cost.
2. It would supply a positive signal to the investors, as the total assets of the business would increase with its substantial R&D costs.
3. It would not affect the profit margins of the business at a big rate as compare to alternative 2.
4. It would provide the company a strong long term market position in regards to the company's total wealth as well as in terms of innovative items.
Cons:
1. Threat of conversion of R&D costs into sunk cost, higher than option 1 lesser than alternative 2.
2. Threat of misconception about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Intro of less number of ingenious products than alternative 2 and high number of ingenious items than alternative 1.

Mercedes Benz India Conclusion

RecommendationsIt has actually institutionalized its methods and culture to align itself with the market changes and client habits, which has actually ultimately allowed it to sustain its market share. Business has actually developed significant market share and brand identity in the city markets, it is advised that the company ought to focus on the rural areas in terms of establishing brand name commitment, awareness, and equity, such can be done by producing a specific brand allotment strategy through trade marketing methods, that draw clear distinction in between Mercedes Benz India items and other competitor items.

Mercedes Benz India Exhibits

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

Altering requirements of global food.
Boosted market share.
Altering assumption in the direction of healthier products
Improvements in R&D and QA divisions.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest possible considering that 1000
Highest after Organisation with less growth than Service 8th Lowest
R&D Spending Greatest considering that 2005 Greatest after Company 5th Least expensive
Net Profit Margin Greatest because 2001 with quick development from 2004 to 2016 As a result of sale of Alcon in 2018. Almost equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nourishment and wellness element Highest possible variety of brands with lasting methods Largest confectionary as well as processed foods brand name in the world Biggest milk products and also bottled water brand name on the planet
Segmentation Center as well as top middle degree consumers worldwide Specific customers together with family group Any age as well as Earnings Consumer Teams Middle and also upper center level customers worldwide
Number of Brands 5th 1st 9th 5th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 59472 721249 832325 271851 931568
Net Profit Margin 5.27% 3.97% 88.76% 1.86% 44.34%
EPS (Earning Per Share) 34.18 6.45 4.52 9.58 23.88
Total Asset 688727 336846 457557 958356 24379
Total Debt 63698 72473 82812 39575 95129
Debt Ratio 97% 39% 74% 42% 89%
R&D Spending 6943 7188 6535 8562 8813
R&D Spending as % of Sales 9.95% 8.49% 6.62% 2.88% 7.19%

Mercedes Benz India Executive Summary Mercedes Benz India Swot Analysis Mercedes Benz India Vrio Analysis Mercedes Benz India Pestel Analysis
Mercedes Benz India Porters Analysis Mercedes Benz India Recommendations