Qihoo Case Study Solution

Qihoo is presently among the biggest food cycle worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who first released "FarineLactee"; a combination of flour and milk to feed babies and decrease death rate. At the exact same time, the Page bros from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The 2 became rivals initially but later combined in 1905, resulting in the birth of Qihoo.
Business is now a global company. Unlike other multinational business, it has senior executives from different countries and tries to make choices thinking about the whole world. Qihoo currently has more than 500 factories around the world and a network spread across 86 countries.

Purpose

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

Vision

Qihoo'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 company to grow
.

Mission

Qihoo's mission is that as currently, it is the leading business in the food market, it thinks in 'Excellent Food, Great Life". Its mission is to offer its customers with a variety of options that are healthy and finest in taste as well. It is focused on supplying the very best food to its customers throughout the day and night.

Products.

Business has a large range of products that it offers to its clients. Its products include food for babies, cereals, dairy products, treats, chocolates, food for family pet and mineral water. It has around four hundred and fifty (450) factories around the world and around 328,000 workers. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Keeping in mind the vision and mission of the corporation, the company has laid down its objectives and goals. These goals and objectives are listed below.
• One goal of the business is to reach no garbage dump status. It is working toward zero waste, where no waste of the factory is landfilled. It encourages its employees to take the most out of the spin-offs. (Business, aboutus, 2017).
• Another goal of Qihoo is to squander minimum food throughout production. Most often, the food produced is lost 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 decrease the above-mentioned issues and would likewise guarantee the shipment of high quality of its products to its customers.
• Meet international requirements of the environment.
• Construct a relationship based upon trust with its customers, business partners, employees, and government.

Critical Issues

Recently, Business Company is focusing more towards the technique of NHW and investing more of its profits on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW technique. Nevertheless, 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 Display H. There is a requirement to focus more on the sales then the innovation technology. Otherwise, it may lead to the decreased profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business strategy is based on the concept of Nutritious, Health and Health (NHW). This method handles the concept to bringing modification in the client preferences about food and making the food stuff healthier concerning about the health issues.
The vision of this method is based upon the key approach i.e. 60/40+ which simply indicates that the products will have a score of 60% on the basis of taste and 40% is based on its dietary value. The items will be made with additional nutritional value in contrast to all other products in market gaining it a plus on its nutritional material.
This method was adopted to bring more yummy plus nutritious foods and beverages in market than ever. In competition with other companies, with an intention of maintaining its trust over clients as Business Company has gotten more trusted by customers.

Quantitative Analysis.

R&D Spending as a percentage of sales are declining with increasing actual quantity of spending reveals that the sales are increasing at a higher rate than its R&D spending, and enable the company to more spend on R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is decreasing. This indicator also shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of debts. This increasing debt ratio pose a risk of default of Business to its investors and might lead a declining share rates. In terms of increasing debt ratio, the firm should not invest much on R&D and should pay its current financial obligations to decrease the risk for investors.
The increasing risk of financiers with increasing financial obligation ratio and declining share costs can be observed by huge decrease of EPS of Qihoo stocks.
The sales development of company is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This slow development also hinder company to further 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 estimations and Charts given in the Displays D and E.

TWOS Analysis

2 analysis can be used to obtain numerous techniques based on the SWOT Analysis provided above. A short summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business ought to present more ingenious products by big quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the profit margins for the company. It could likewise provide Business a long term competitive advantage over its competitors.
The global growth of Business should be concentrated on market recording of establishing countries by expansion, drawing in more consumers through client's commitment. As developing countries are more populated than developed countries, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Qihoo needs to do careful acquisition and merger of organizations, as it might impact the client's and society's understandings about Business. It should acquire and merge with those companies which have a market credibility of healthy and healthy business. It would improve the perceptions of customers about Business.
Business must not only invest its R&D on development, instead of it ought to also focus on the R&D spending over evaluation of expense of numerous healthy products. This would increase cost performance of its items, which will lead to increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business should transfer to not only developing but likewise to industrialized countries. It should broadens its geographical growth. This wide geographical expansion towards establishing and established countries would decrease the danger of possible losses in times of instability in different nations. It should widen its circle to numerous nations like Unilever which operates in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Qihoo needs to carefully control its acquisitions to avoid the risk of mistaken belief from the consumers about Business. It should get and combine with those nations having a goodwill of being a healthy business in the market. This would not only improve the understanding of customers about Business however would also increase the sales, profit margins and market share of Business. It would also make it possible for the company to use its prospective resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon 4 factors; age, gender, earnings and occupation. For instance, Business produces a number of products connected to children i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary products. Qihoo products are quite budget-friendly by nearly all levels, however its major targeted customers, in regards to earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical segmentation of Business is made up of its existence in almost 86 nations. Its geographical segmentation is based upon two main aspects i.e. typical earnings level of the consumer in addition to the climate of the region. For instance, Singapore Business Company's division is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the personality and lifestyle of the client. For instance, Business 3 in 1 Coffee target those customers whose lifestyle is quite hectic and don't have much time.

Behavioral Segmentation

Qihoo behavioral segmentation is based upon the attitude knowledge and awareness of the customer. For example its highly nutritious products target those customers who have a health conscious attitude towards their intakes.

Qihoo Alternatives

In order to sustain the brand in the market and keep the customer intact with the brand, there are 2 options:
Option: 1
The Business should spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the business, increasing the wealth of the business. However, costs on R&D would be sunk expense.
2. The business can resell the acquired systems in the market, if it fails to implement its method. Quantity invest on the R&D might not be restored, and it will be considered entirely sunk expense, if it do not give potential outcomes.
3. Investing in R&D supply sluggish development in sales, as it takes very long time to present an item. Nevertheless, acquisitions supply fast outcomes, as it provide the company already developed item, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's worths like Kraftz foods can lead the company to face misunderstanding of consumers about Business core worths of healthy and nutritious items.
2 Large costs on acquisitions than R&D would send out a signal of company's inadequacy of developing innovative products, and would lead to customer's dissatisfaction too.
3. Big acquisitions than R&D would extend the product line of the business by the products which are currently present in the market, making company unable to introduce brand-new innovative items.
Option: 2.
The Company must invest more on its R&D rather than acquisitions.
Pros:
1. It would allow the company to produce more innovative items.
2. It would supply the company 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 an entirely new market sector.
4. Innovative items will supply 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 whole spending on R&D would be considered as sunk cost, and would affect 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 a negative signal to the financiers, and could result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Pros:
1. It would allow the company to present brand-new innovative items with less risk of converting the spending on R&D into sunk expense.
2. It would offer a positive signal to the investors, as the total properties of the business would increase with its significant R&D spending.
3. It would not impact the profit margins of the business at a large rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the business's general wealth in addition to in terms of ingenious products.
Cons:
1. Danger of conversion of R&D costs into sunk expense, greater than alternative 1 lesser than alternative 2.
2. Threat of misunderstanding about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Intro of less number of innovative products than alternative 2 and high number of ingenious products than alternative 1.

Qihoo Conclusion

Business has stayed the leading market gamer for more than a decade. It has institutionalized its methods and culture to align itself with the marketplace changes and consumer habits, which has ultimately allowed it to sustain its market share. Business has actually developed considerable market share and brand identity in the metropolitan markets, it is recommended that the company should focus on the rural areas in terms of establishing brand commitment, awareness, and equity, such can be done by creating a particular brand allocation method through trade marketing tactics, that draw clear difference between Qihoo items and other competitor items. Qihoo needs to utilize its brand image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will enable the company to develop brand equity for freshly presented and currently produced items on a higher platform, making the effective usage of resources and brand image in the market.

Qihoo Exhibits