Piaggio A Case Study Help

Business is currently one of the biggest food chains worldwide. It was established by Henri Piaggio A in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate.
Business is now a multinational business. Unlike other international business, it has senior executives from various countries and attempts to make choices considering the entire world. Piaggio A currently has more than 500 factories worldwide and a network spread across 86 nations.

Purpose

The purpose of Business Corporation is to improve the quality of life of people by playing its part and providing healthy food. While making sure that the company is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Piaggio A's vision is to offer its consumers with food that is healthy, high in quality and safe to eat. Business imagines to establish a trained workforce which would help the business to grow
.

Mission

Piaggio A's mission is that as presently, it is the leading company in the food industry, it believes in 'Excellent Food, Excellent Life". Its objective is to supply its customers with a variety of choices that are healthy and best in taste. It is focused on supplying the best food to its consumers throughout the day and night.

Products.

Business has a wide range of items that it provides to its customers. Its products consist of food for babies, cereals, dairy products, treats, chocolates, food for animal and mineral water. It has around four hundred and fifty (450) factories all over the world and around 328,000 workers. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the company has actually laid down its goals and objectives. These objectives and objectives are noted below.
• One objective of the business is to reach absolutely no landfill status. (Business, aboutus, 2017).
• Another goal of Piaggio A is to squander minimum food throughout production. Frequently, the food produced is lost even prior to it reaches the consumers.
• Another thing that Business is dealing with is to enhance its product packaging in such a way that it would help it to reduce those problems and would likewise guarantee the shipment of high quality of its items to its consumers.
• Meet international standards of the environment.
• Construct a relationship based on trust with its consumers, organisation partners, workers, and government.

Critical Issues

Just 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 business 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 Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business method is based on the idea of Nutritious, Health and Health (NHW). This strategy handles the idea to bringing modification in the client choices about food and making the food stuff healthier concerning about the health concerns.
The vision of this technique is based on the key approach i.e. 60/40+ which just implies that the items will have a rating of 60% on the basis of taste and 40% is based on its dietary value. The items will be produced with additional nutritional value in contrast to all other items in market gaining it a plus on its dietary material.
This method was embraced to bring more tasty plus healthy foods and drinks in market than ever. In competitors with other companies, with an intention of retaining its trust over consumers as Business Company has gained more trusted by customers.

Quantitative Analysis.

R&D Costs as a portion of sales are decreasing with increasing real amount of costs reveals that the sales are increasing at a greater rate than its R&D costs, and permit the company to more spend on R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign likewise reveals a thumbs-up 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 financial obligation ratio position a danger of default of Business to its financiers and could lead a declining share costs. For that reason, in terms of increasing debt ratio, the firm ought to not invest much on R&D and should pay its present debts to decrease the risk for financiers.
The increasing threat of financiers with increasing financial obligation ratio and decreasing share rates can be observed by substantial decline of EPS of Piaggio A stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow understanding building of customers. This slow development also impede business 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 used to derive numerous methods based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given up Exhibition H.

Strategies to exploit Opportunities using Strengths

Business ought to introduce more ingenious items by big amount 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 could also offer Business a long term competitive benefit over its rivals.
The global growth of Business ought to be focused on market catching of developing countries by expansion, drawing in more customers through client's loyalty. As developing nations are more populated than industrialized nations, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Piaggio A ought to do careful acquisition and merger of companies, as it could affect the customer's and society's perceptions about Business. It needs to acquire and merge with those companies which have a market track record of healthy and nutritious companies. It would improve the perceptions of customers about Business.
Business must not only invest its R&D on development, instead of it needs to also concentrate on the R&D costs over examination of expense of numerous nutritious items. This would increase cost performance of its products, which will lead to increasing its sales, due to declining costs, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not only developing but likewise to industrialized countries. It needs to expand its circle to numerous nations like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Piaggio A ought to sensibly manage its acquisitions to prevent the threat of misconception from the customers about Business. It must obtain and combine with those nations having a goodwill of being a healthy company in the market. This would not just enhance the perception of consumers about Business but would likewise increase the sales, earnings margins and market share of Business. It would also make it possible for the business to utilize its prospective resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The market division of Business is based on four elements; age, gender, earnings and profession. Business produces several products related to infants i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary products. Piaggio A items are rather cost effective by almost all levels, but its significant targeted clients, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its existence in almost 86 countries. Its geographical division is based upon 2 primary factors i.e. average income level of the customer as well as the climate of the region. Singapore Business Business's division is done on the basis of the weather of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and lifestyle of the client. Business 3 in 1 Coffee target those clients whose life design is rather busy and don't have much time.

Behavioral Segmentation

Piaggio A behavioral division is based upon the attitude understanding and awareness of the customer. For example its extremely healthy products target those customers who have a health mindful attitude towards their consumptions.

Piaggio A Alternatives

In order to sustain the brand in the market and keep the customer undamaged with the brand name, there are two choices:
Alternative: 1
The Business should invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the business, increasing the wealth of the business. Spending on R&D would be sunk expense.
2. The company can resell the gotten units in the market, if it fails to execute its technique. However, amount spend on the R&D might not be revived, and it will be considered completely sunk expense, if it do not offer prospective outcomes.
3. Investing in R&D provide sluggish growth in sales, as it takes long time to present a product. However, acquisitions supply fast outcomes, as it provide the business already 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 business to deal with mistaken belief of consumers about Business core values of healthy and nutritious products.
2 Large costs on acquisitions than R&D would send a signal of business's ineffectiveness 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 company unable to introduce brand-new ingenious items.
Alternative: 2.
The Company should invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the business to produce more ingenious products.
2. It would supply the business a strong competitive position in the market.
3. It would allow the company to increase its targeted consumers by presenting those products which can be used to a completely new market sector.
4. Ingenious products will provide long term advantages and high market share in long run.
Cons:
1. It would decrease the revenue margins of the business.
2. In case of failure, the entire costs on R&D would be considered as sunk expense, and would affect the company at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might provide an unfavorable signal to the investors, and might result I declining stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would permit the company to present brand-new ingenious products with less risk of converting the costs on R&D into sunk expense.
2. It would offer a positive signal to the investors, as the general assets of the business would increase with its significant R&D spending.
3. It would not impact the earnings margins of the company at a big rate as compare to alternative 2.
4. It would provide the company a strong long term market position in terms of the business's general wealth in addition to in regards to ingenious items.
Cons:
1. Risk of conversion of R&D spending into sunk cost, higher than alternative 1 lower than alternative 2.
2. Threat of misconception about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Introduction of less variety of ingenious products than alternative 2 and high variety of innovative products than alternative 1.

Piaggio A Conclusion

It has actually institutionalised its methods and culture to align itself with the market changes and customer behavior, which has actually eventually allowed it to sustain its market share. Business has actually developed substantial market share and brand name identity in the city markets, it is recommended that the company must focus on the rural locations in terms of establishing brand commitment, awareness, and equity, such can be done by developing a particular brand allowance strategy through trade marketing strategies, that draw clear difference between Piaggio A products and other rival items.

Piaggio A Exhibits