Risk Management At Lehman Brothers Case Study Help

Business is presently one of the greatest food chains worldwide. It was founded by Henri Risk Management At Lehman Brothers in 1866, a German Pharmacist who initially released "FarineLactee"; a mix of flour and milk to feed infants and decrease mortality rate.
Business is now a multinational company. Unlike other multinational companies, it has senior executives from different nations and tries to make decisions considering the whole world. Risk Management At Lehman Brothers currently has more than 500 factories around the world and a network spread throughout 86 countries.

Purpose

The function of Risk Management At Lehman Brothers Corporation is to improve the lifestyle of individuals by playing its part and providing healthy food. It wishes to help the world in shaping a healthy and better future for it. It also wants to encourage individuals to live a healthy life. While making certain that the business is succeeding in the long run, that's how it plays its part for a better and healthy future

Vision

Risk Management At Lehman Brothers's vision is to supply its customers with food that is healthy, high in quality and safe to eat. Business envisions to establish a well-trained workforce which would help the company to grow
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Mission

Risk Management At Lehman Brothers's objective is that as presently, it is the leading company in the food industry, it thinks in 'Excellent Food, Excellent Life". Its mission is to offer its customers with a variety of choices that are healthy and best in taste as well. It is concentrated on providing the very best food to its consumers throughout the day and night.

Products.

Risk Management At Lehman Brothers has a wide variety of items that it offers to its clients. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Remembering the vision and objective of the corporation, the business has actually put down its objectives and goals. These objectives and objectives are listed below.
• One objective of the company is to reach zero land fill status. (Business, aboutus, 2017).
• Another goal of Risk Management At Lehman Brothers is to squander minimum food throughout production. Frequently, the food produced is lost even before it reaches the customers.
• Another thing that Business is working on is to improve its packaging in such a method that it would help it to lower the above-mentioned problems and would likewise ensure the delivery of high quality of its products to its consumers.
• Meet international standards of the environment.
• Develop a relationship based upon trust with its customers, business partners, staff members, and government.

Critical Issues

Just Recently, Business Company is focusing more towards the technique of NHW and investing more of its profits 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 achieved as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business method is based on the principle of Nutritious, Health and Wellness (NHW). This strategy deals with the concept to bringing modification in the consumer preferences about food and making the food things much healthier concerning about the health concerns.
The vision of this strategy is based on the secret approach i.e. 60/40+ which just suggests that the products will have a score of 60% on the basis of taste and 40% is based upon its dietary value. The products will be manufactured with additional nutritional worth in contrast to all other items in market gaining it a plus on its nutritional material.
This method was embraced to bring more yummy plus nutritious foods and beverages in market than ever. In competition with other companies, with an intent of retaining its trust over clients as Business Company has acquired more trusted by costumers.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing actual quantity of costs shows that the sales are increasing at a higher rate than its R&D spending, and enable the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is decreasing. This indication likewise reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of debts. This increasing debt ratio pose a danger of default of Business to its investors and could lead a declining share prices. In terms of increasing debt ratio, the firm should not spend much on R&D and needs to pay its current financial obligations to decrease the threat for financiers.
The increasing risk of financiers with increasing debt ratio and declining share costs can be observed by big decrease of EPS of Risk Management At Lehman Brothers 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 growth likewise prevent company to additional 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 Exhibits D and E.

TWOS Analysis

TWOS analysis can be utilized to derive various strategies based upon the SWOT Analysis given above. A brief summary of TWOS Analysis is given in Exhibition H.

Strategies to exploit Opportunities using Strengths

Business needs to present more ingenious products by big amount of R&D Costs and mergers and acquisitions. It might increase the marketplace share of Business and increase the revenue margins for the company. It might also offer Business a long term competitive benefit over its rivals.
The international expansion of Business need to be concentrated on market recording of developing nations by expansion, bring in more clients through consumer's commitment. As establishing countries are more populated than developed nations, it might increase the customer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Risk Management At Lehman Brothers must do mindful acquisition and merger of organizations, as it might affect the client's and society's perceptions about Business. It must get and combine with those companies which have a market reputation of healthy and nutritious business. It would improve the understandings of customers about Business.
Business needs to not only invest its R&D on innovation, instead of it should likewise concentrate on the R&D spending over evaluation of expense of numerous healthy items. This would increase expense effectiveness of its items, which will result in increasing its sales, due to decreasing rates, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not only establishing but likewise to industrialized nations. It should expand its circle to different nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Risk Management At Lehman Brothers must carefully manage its acquisitions to prevent the risk of mistaken belief from the customers about Business. It must acquire and combine with those nations having a goodwill of being a healthy business in the market. This would not only improve the perception of customers about Business however would also increase the sales, revenue margins and market share of Business. It would also allow the company to use its prospective resources effectively on its other operations instead of acquisitions of those organizations slowing the NHW technique development.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based upon four factors; age, gender, earnings and occupation. Business produces a number of items related to infants i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary items. Risk Management At Lehman Brothers items are quite affordable by practically all levels, however its significant targeted customers, in terms of income level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is composed of its presence in almost 86 countries. Its geographical division is based upon two main elements i.e. average 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 character and lifestyle of the client. For example, Business 3 in 1 Coffee target those clients whose life style is quite hectic and don't have much time.

Behavioral Segmentation

Risk Management At Lehman Brothers behavioral division is based upon the attitude knowledge and awareness of the customer. Its highly nutritious products target those clients who have a health conscious mindset towards their consumptions.

Risk Management At Lehman Brothers Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are 2 choices:
Alternative: 1
The Company ought to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall assets of the business, increasing the wealth of the business. Nevertheless, costs on R&D would be sunk expense.
2. The business can resell the gotten units in the market, if it fails to execute its technique. Quantity invest on the R&D might not be restored, and it will be considered completely sunk cost, if it do not give possible outcomes.
3. Investing in R&D offer sluggish growth in sales, as it takes long time to present an item. Acquisitions offer fast outcomes, as it offer the company currently established product, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the business to face misunderstanding of customers about Business core values of healthy and healthy products.
2 Big costs on acquisitions than R&D would send out a signal of business's inadequacy of developing ingenious products, and would results in consumer's frustration.
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 business unable to present new ingenious items.
Alternative: 2.
The Company should invest more on its R&D rather than acquisitions.
Pros:
1. It would make it possible for the company to produce more ingenious items.
2. It would supply the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted clients by presenting those items which can be used to a completely new market segment.
4. Ingenious items will offer long term benefits and high market share in long term.
Cons:
1. It would decrease the revenue margins of the company.
2. In case of failure, the whole spending on R&D would be thought about as sunk cost, and would impact the company at big. The risk is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might offer a negative signal to the financiers, and might result I decreasing stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Pros:
1. It would enable the business to present brand-new innovative items with less danger of converting the costs on R&D into sunk cost.
2. It would provide a positive signal to the financiers, as the general possessions of the business would increase with its significant R&D spending.
3. It would not affect the earnings margins of the business at a big rate as compare to alternative 2.
4. It would offer the company a strong long term market position in terms of the business's total wealth in addition to in terms of ingenious products.
Cons:
1. Risk of conversion of R&D spending into sunk cost, higher than option 1 lower than alternative 2.
2. Risk of mistaken belief about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less number of ingenious items than alternative 2 and high number of innovative products than alternative 1.

Risk Management At Lehman Brothers Conclusion

Business has actually remained the top market player for more than a decade. It has actually institutionalised its techniques and culture to align itself with the market modifications and consumer habits, which has eventually permitted it to sustain its market share. Though, Business has actually developed significant market share and brand identity in the metropolitan markets, it is recommended that the company should concentrate on the backwoods in terms of establishing brand loyalty, awareness, and equity, such can be done by developing a particular brand allocation strategy through trade marketing tactics, that draw clear distinction in between Risk Management At Lehman Brothers items and other rival items. Risk Management At Lehman Brothers ought to utilize its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other categories such as nutrition. This will permit the company to develop brand name equity for recently presented and already produced products on a higher platform, making the effective usage of resources and brand image in the market.

Risk Management At Lehman Brothers Exhibits