Statistical Quality Control For Process Improvement Case Study Solution

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Statistical Quality Control For Process Improvement Case Study Analysis

Statistical Quality Control For Process Improvement is presently one of the greatest food chains worldwide. It was founded by Kelloggs in 1866, a German Pharmacist who initially introduced "FarineLactee"; a combination of flour and milk to feed infants and decrease death rate. At the very same time, the Page brothers from Switzerland also found The Anglo-Swiss Condensed Milk Business. The two became rivals initially but in the future merged in 1905, resulting in the birth of Statistical Quality Control For Process Improvement.
Business is now a transnational business. Unlike other multinational business, it has senior executives from different nations and tries to make choices thinking about the entire world. Statistical Quality Control For Process Improvement currently has more than 500 factories around the world and a network spread throughout 86 nations.


The function of Business Corporation is to enhance the quality of life of individuals by playing its part and supplying 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


Statistical Quality Control For Process Improvement's vision is to provide its customers with food that is healthy, high in quality and safe to eat. It wants to be ingenious and simultaneously understand the needs and requirements of its consumers. Its vision is to grow quickly and offer products that would satisfy the needs of each age. Statistical Quality Control For Process Improvement envisions to develop a well-trained labor force which would help the company to grow


Statistical Quality Control For Process Improvement's objective is that as presently, it is the leading business in the food industry, it thinks in 'Good Food, Good Life". Its mission is to provide its consumers with a variety of options that are healthy and finest in taste as well. It is concentrated on supplying the very best food to its clients throughout the day and night.


Business has a wide range of items that it uses to its customers. Its items include food for babies, cereals, dairy items, snacks, chocolates, food for pet and mineral water. It has around four hundred and fifty (450) factories around the world and around 328,000 staff members. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has put down its objectives and objectives. These objectives and objectives are listed below.
• One goal of the company is to reach zero garbage dump status. It is working toward no waste, where no waste of the factory is landfilled. It motivates its employees to take the most out of the by-products. (Business, aboutus, 2017).
• Another goal of Statistical Quality Control For Process Improvement is to lose minimum food throughout production. Frequently, the food produced is squandered even before it reaches the customers.
• Another thing that Business is working on is to improve its product packaging in such a way that it would help it to reduce those complications and would also guarantee the delivery of high quality of its products to its clients.
• Meet international requirements of the environment.
• Develop a relationship based upon trust with its customers, organisation partners, staff members, and federal 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 innovation. The nation is investing more on acquisitions and mergers to support its NHW method. The target of the business is not achieved as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, given in Display H. There is a need to focus more on the sales then the innovation technology. Otherwise, it may result in the decreased earnings rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The current Business technique is based on the idea of Nutritious, Health and Wellness (NHW). This strategy handles the idea to bringing change in the consumer preferences about food and making the food stuff much healthier worrying about the health concerns.
The vision of this strategy is based on the secret approach i.e. 60/40+ which merely indicates that the items 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 additional dietary value in contrast to all other products in market getting it a plus on its dietary material.
This method was adopted to bring more yummy plus nutritious foods and drinks in market than ever. In competitors with other business, with an intent of maintaining its trust over consumers as Business Company has actually gotten more trusted by costumers.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing actual amount of spending shows that the sales are increasing at a greater rate than its R&D costs, and enable the company to more invest in R&D.
Net Profit Margin is increasing while R&D as a portion of sales is declining. This indicator also shows a green light to the R&D spending, 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 debt ratio position a threat of default of Business to its investors and could lead a decreasing share prices. In terms of increasing debt ratio, the company should not spend much on R&D and needs to pay its present debts to decrease the risk for investors.
The increasing threat of financiers with increasing debt ratio and declining share rates can be observed by substantial decrease of EPS of Statistical Quality Control For Process Improvement stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow understanding structure of customers. This slow development also impede business 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 estimations and Charts given in the Exhibitions D and E.

TWOS Analysis

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

Strategies to exploit Opportunities using Strengths

Business needs to present more innovative products by big quantity of R&D Costs and mergers and acquisitions. It could increase the market share of Business and increase the earnings margins for the company. It could also provide Business a long term competitive advantage over its competitors.
The worldwide growth of Business should be concentrated on market catching of developing nations by growth, attracting more consumers through consumer's loyalty. As developing nations are more populous than developed countries, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisStatistical Quality Control For Process Improvement needs to do cautious acquisition and merger of companies, as it could affect the client's and society's perceptions about Business. It ought to obtain and merge with those companies which have a market credibility of healthy and nutritious companies. It would enhance the perceptions of customers about Business.
Business must not only spend its R&D on development, instead of it needs to likewise concentrate on the R&D spending over evaluation of expense of various nutritious products. This would increase expense performance of its products, which will lead to increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business needs to move to not just establishing however also to industrialized countries. It should widen its circle to numerous nations like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It ought to get and combine with those nations having a goodwill of being a healthy company in the market. It would likewise make it possible for the company to use its potential resources efficiently on its other operations rather than acquisitions of those companies slowing the NHW technique growth.

Segmentation Analysis

Demographic Segmentation

The group division of Business is based on 4 factors; age, gender, income and profession. Business produces numerous products related to babies i.e. Cerelac, Nido, and so on and associated to grownups i.e. confectionary products. Statistical Quality Control For Process Improvement products are rather economical by practically all levels, but its significant targeted customers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Business is made up of its existence in nearly 86 nations. Its geographical segmentation is based upon 2 primary factors i.e. typical income level of the customer along with the climate of the region. For instance, 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 segmentation of Business is based upon the personality and lifestyle of the consumer. Business 3 in 1 Coffee target those consumers whose life design is quite busy and do not have much time.

Behavioral Segmentation

Statistical Quality Control For Process Improvement behavioral segmentation is based upon the mindset understanding and awareness of the customer. For example its highly healthy products target those clients who have a health conscious mindset towards their intakes.

Statistical Quality Control For Process Improvement Alternatives

In order to sustain the brand name in the market and keep the customer undamaged with the brand name, there are two alternatives:
Alternative: 1
The Company should invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall properties of the company, increasing the wealth of the business. However, costs on R&D would be sunk expense.
2. The business can resell the acquired units in the market, if it fails to execute its method. Quantity spend on the R&D could not be revived, and it will be considered entirely sunk expense, if it do not offer prospective outcomes.
3. Investing in R&D provide slow growth in sales, as it takes very long time to present an item. However, acquisitions provide fast results, as it offer the business currently established product, which can be marketed not long after the acquisition.
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the company to face misunderstanding of consumers about Business core values of healthy and nutritious items.
2 Large spending on acquisitions than R&D would send out a signal of business's inadequacy of establishing innovative products, and would results in consumer's dissatisfaction as well.
3. Big acquisitions than R&D would extend the line of product of the company by the products which are already present in the market, making company unable to present new innovative products.
Alternative: 2.
The Company must spend more on its R&D instead of acquisitions.
1. It would allow the business to produce more ingenious products.
2. It would supply the company a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted consumers by presenting those items which can be used to an entirely new market sector.
4. Innovative items will provide long term benefits and high market share in long term.
1. It would decrease the revenue margins of the company.
2. In case of failure, the whole spending on R&D would be considered as sunk cost, and would impact the company at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of company, which might supply a negative 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 permit the company to present brand-new innovative items with less danger of converting the costs on R&D into sunk expense.
2. It would provide a positive signal to the financiers, as the total properties of the company would increase with its significant R&D costs.
3. It would not impact the profit margins of the business at a big rate as compare to alternative 2.
4. It would provide the business a strong long term market position in terms of the company's total wealth in addition to in regards to innovative products.
1. Danger of conversion of R&D costs into sunk expense, greater than alternative 1 lower than alternative 2.
2. Risk of misconception about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less variety of innovative products than alternative 2 and high variety of innovative items than alternative 1.

Statistical Quality Control For Process Improvement Conclusion

RecommendationsBusiness has stayed the leading market player for more than a years. It has institutionalized its strategies and culture to align itself with the market modifications and client habits, which has actually eventually enabled it to sustain its market share. Business has actually developed considerable market share and brand identity in the urban markets, it is suggested that the business ought to focus on the rural areas in terms of developing brand name commitment, awareness, and equity, such can be done by developing a specific brand name allowance strategy through trade marketing tactics, that draw clear difference in between Statistical Quality Control For Process Improvement items and other competitor products. Moreover, Business 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 allow the business to develop brand equity for freshly presented and currently produced products on a higher platform, making the efficient usage of resources and brand image in the market.

Statistical Quality Control For Process Improvement Exhibits

PESTEL Analysis
Governmental support

Altering standards of international food.
Improved market share. Altering assumption towards healthier items Improvements in R&D and QA divisions.

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

Use sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest given that 2000 Highest possible after Organisation with much less growth than Business 1st Lowest
R&D Spending Highest possible given that 2004 Highest possible after Business 1st Cheapest
Net Profit Margin Highest considering that 2005 with fast growth from 2002 to 2019 As a result of sale of Alcon in 2014. Nearly equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition as well as wellness aspect Greatest variety of brand names with lasting practices Biggest confectionary and also refined foods brand name on the planet Largest milk items and mineral water brand name in the world
Segmentation Middle and top center degree consumers worldwide Private customers along with house group All age and also Revenue Client Groups Middle and also top center degree customers worldwide
Number of Brands 3rd 6th 9th 1st

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 95328 917119 663783 234588 881461
Net Profit Margin 5.68% 3.83% 57.89% 9.91% 94.52%
EPS (Earning Per Share) 63.12 4.41 9.72 2.58 74.31
Total Asset 158173 646963 841911 772736 81176
Total Debt 77675 16275 98848 17537 27264
Debt Ratio 45% 96% 61% 44% 88%
R&D Spending 2719 1181 8932 9334 9141
R&D Spending as % of Sales 1.77% 8.43% 6.18% 4.49% 8.69%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations