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Nivea A Case Study Solution

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Nivea A Case Study Solution

Nivea A is presently among the biggest food cycle worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed babies and decrease mortality rate. At the same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The 2 became rivals at first however later merged in 1905, leading to the birth of Nivea A.
Business is now a multinational business. Unlike other multinational companies, it has senior executives from different countries and tries to make choices thinking about the whole world. Nivea A currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The function of Business Corporation is to enhance the quality of life of individuals by playing its part and offering healthy food. While making sure that the business is succeeding in the long run, that's how it plays its part for a much better and healthy future

Vision

Nivea A's vision is to provide its customers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and all at once comprehend the requirements and requirements of its consumers. Its vision is to grow quickly and supply items that would satisfy the needs of each age group. Nivea A pictures to develop a trained labor force which would help the company to grow
.

Mission

Nivea A's objective is that as currently, it is the leading company in the food industry, it thinks in 'Great Food, Great Life". Its objective is to provide its customers with a range of choices that are healthy and finest in taste too. It is focused on offering the very best food to its consumers throughout the day and night.

Products.

Business has a wide range of products that it provides to its customers. Its products include food for infants, cereals, dairy products, treats, chocolates, food for animal and mineral water. It has around four hundred and fifty (450) factories worldwide and around 328,000 staff members. In 2011, Business was noted as the most gainful company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the company has set its objectives and objectives. These goals and goals are listed below.
• One objective of the business is to reach zero land fill status. It is pursuing zero waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Nivea A is to squander minimum food during production. Most often, the food produced is wasted even prior to it reaches the clients.
• Another thing that Business is working on is to enhance its packaging in such a way that it would help it to reduce those issues and would likewise ensure the shipment of high quality of its items to its customers.
• Meet global standards of the environment.
• Construct a relationship based on trust with its consumers, service partners, workers, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the method of NHW and investing more of its revenues on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW strategy. The target of the company is not attained as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibit H. There is a requirement to focus more on the sales then the development technology. Otherwise, it might lead to the declined earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based upon the concept of Nutritious, Health and Health (NHW). This technique handles the idea to bringing modification in the consumer choices about food and making the food stuff much healthier concerning about the health problems.
The vision of this method is based on the key technique i.e. 60/40+ which merely indicates that the products will have a rating of 60% on the basis of taste and 40% is based upon its nutritional worth. The products will be manufactured with additional nutritional worth in contrast to all other items in market getting it a plus on its dietary content.
This strategy was embraced to bring more delicious plus nutritious foods and beverages in market than ever. In competition with other business, with an intent of retaining its trust over consumers as Business Business has actually gotten more relied on by costumers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing real quantity of spending reveals that the sales are increasing at a higher rate than its R&D spending, and allow the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This indication 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 instead of payment of debts. This increasing financial obligation ratio pose a danger of default of Business to its investors and could lead a declining share prices. For that reason, in regards to increasing debt ratio, the firm needs to not spend much on R&D and must pay its current financial obligations to reduce the threat for financiers.
The increasing danger of investors with increasing financial obligation ratio and decreasing share rates can be observed by huge decline of EPS of Nivea A stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow understanding building of consumers. This slow growth also prevent business to additional 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 computations and Graphs given in the Exhibits D and E.

TWOS Analysis


2 analysis can be used to obtain various strategies based upon the SWOT Analysis provided above. A quick summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more ingenious products by big quantity of R&D Costs and mergers and acquisitions. It could increase the market share of Business and increase the profit margins for the company. It might also offer Business a long term competitive benefit over its competitors.
The worldwide growth of Business need to be concentrated on market catching of establishing nations by growth, attracting more consumers through consumer's commitment. As establishing nations are more populous than industrialized nations, it could increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisNivea A must do careful acquisition and merger of companies, as it might impact the customer's and society's perceptions about Business. It needs to get and combine with those business which have a market track record of healthy and nutritious companies. It would enhance the understandings of consumers about Business.
Business must not just invest its R&D on innovation, instead of it should also focus on the R&D costs over evaluation of expense of various healthy products. This would increase cost 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 must move to not just developing however also to developed countries. It must broaden its circle to different nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Nivea A must carefully control its acquisitions to avoid the threat of misconception from the customers about Business. It should obtain and merge with those countries having a goodwill of being a healthy company in the market. This would not just enhance the understanding of consumers about Business but would also increase the sales, earnings margins and market share of Business. It would likewise allow the business to use its potential resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on four elements; age, gender, earnings and occupation. For example, Business produces numerous products associated with babies i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary items. Nivea A items are quite budget-friendly by almost all levels, but its significant targeted consumers, in terms of earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical segmentation of Business is made up of its existence in practically 86 countries. Its geographical segmentation is based upon 2 primary factors i.e. average earnings level of the customer along with the environment of the region. Singapore Business Company'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 life style of the client. For example, Business 3 in 1 Coffee target those consumers whose life style is rather hectic and don't have much time.

Behavioral Segmentation

Nivea A behavioral segmentation is based upon the attitude understanding and awareness of the client. Its extremely nutritious items target those customers who have a health mindful mindset towards their consumptions.

Nivea A Alternatives

In order to sustain the brand name in the market and keep the customer intact with the brand name, there are two alternatives:
Alternative: 1
The Business ought to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall properties of the company, increasing the wealth of the company. Costs on R&D would be sunk cost.
2. The business can resell the obtained units in the market, if it stops working to execute its technique. Nevertheless, amount invest in the R&D might not be restored, and it will be thought about totally sunk cost, if it do not give possible results.
3. Spending on R&D provide slow development in sales, as it takes long period of time to introduce an item. Nevertheless, acquisitions provide fast outcomes, as it provide the company currently established item, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the business to face mistaken belief of customers about Business core worths of healthy and nutritious items.
2 Big spending on acquisitions than R&D would send a signal of company's inefficiency of developing ingenious products, and would outcomes in customer's discontentment.
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 business unable to introduce new innovative products.
Option: 2.
The Company must invest more on its R&D rather than acquisitions.
Pros:
1. It would make it possible for the business to produce more innovative items.
2. It would offer the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted customers by introducing those items which can be offered to a totally brand-new market sector.
4. Innovative products will supply long term advantages 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 expense, and would impact the company at big. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could provide a negative signal to the financiers, and could result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Vrio AnalysisPros:
1. It would enable the business to introduce brand-new innovative products with less threat of converting the costs on R&D into sunk cost.
2. It would provide a positive signal to the financiers, as the general assets of the company would increase with its significant R&D spending.
3. It would not affect the profit margins of the business at a big rate as compare to alternative 2.
4. It would supply the company a strong long term market position in regards to the company's total wealth in addition to in regards to ingenious items.
Cons:
1. Danger of conversion of R&D spending into sunk expense, higher than option 1 lesser than alternative 2.
2. Danger of misconception about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Introduction of less variety of innovative items than alternative 2 and high number of innovative products than alternative 1.

Nivea A Conclusion

RecommendationsBusiness has actually stayed the leading market gamer for more than a decade. It has actually institutionalized its techniques and culture to align itself with the marketplace changes and consumer behavior, which has actually eventually allowed it to sustain its market share. Though, Business has actually established considerable market share and brand name identity in the metropolitan markets, it is suggested that the company needs to focus on the rural areas in regards to establishing brand commitment, awareness, and equity, such can be done by creating a specific brand name allotment technique through trade marketing tactics, that draw clear distinction in between Nivea A products and other competitor items. Moreover, Business must utilize its brand picture of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will enable the business to establish brand name equity for freshly introduced and currently produced items on a higher platform, making the effective use of resources and brand image in the market.

Nivea A Exhibits

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

Transforming standards of worldwide food.
Enhanced market share.
Transforming assumption towards healthier products
Improvements in R&D as well as QA divisions.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest because 2000
Greatest after Service with less growth than Company 6th Cheapest
R&D Spending Greatest because 2005 Highest after Service 4th Cheapest
Net Profit Margin Greatest because 2003 with rapid development from 2001 to 2015 As a result of sale of Alcon in 2013. Nearly equal to Kraft Foods Incorporation Almost equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as health and wellness variable Greatest number of brands with sustainable practices Biggest confectionary and also refined foods brand on the planet Biggest dairy items as well as mineral water brand worldwide
Segmentation Middle as well as top middle level consumers worldwide Individual customers together with family team Every age as well as Earnings Client Groups Center and top middle level consumers worldwide
Number of Brands 2nd 4th 4th 8th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 53284 387959 671848 574262 761583
Net Profit Margin 8.53% 2.19% 59.85% 7.89% 94.46%
EPS (Earning Per Share) 26.82 4.68 5.97 8.54 95.71
Total Asset 666318 338824 688947 825888 68233
Total Debt 34342 15666 44449 69458 73564
Debt Ratio 97% 44% 86% 22% 24%
R&D Spending 2173 8566 9396 7937 1945
R&D Spending as % of Sales 9.32% 3.99% 8.89% 5.31% 8.51%

Nivea A Executive Summary Nivea A Swot Analysis Nivea A Vrio Analysis Nivea A Pestel Analysis
Nivea A Porters Analysis Nivea A Recommendations