Areva Case Study Solution & Analysis
Introduction
Areva Case Study Help is currently one of the biggest food cycle worldwide. It was established by Henri Areva in 1866, a German Pharmacist who first launched "Farine Lactee"; a combination of flour and milk to decrease and feed babies mortality rate. At the exact same time, the Page siblings from Switzerland also discovered The Anglo-Swiss Condensed Milk Company. The 2 ended up being rivals initially but in the future merged in 1905, leading to the birth of Areva.
Areva 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. Areva Case Study Analysis currently has more than 500 factories worldwide and a network spread across 86 nations.
Purpose
The purpose of Areva Corporation is to enhance the lifestyle of individuals by playing its part and supplying healthy food. It wants to assist the world in shaping a healthy and much better future for it. It likewise wishes to motivate individuals to live a healthy life. 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
Nestlé's vision is to supply its customers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and at the same time understand the needs and requirements of its consumers. Its vision is to grow fast and offer items that would please the needs of each age. Areva envisions to establish a trained labor force which would help the company to grow.
Mission.
Nestlé's objective is that as presently, it is the leading business in the food industry, it believes in 'Great Food, Excellent Life". Its objective is to provide its consumers 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 consumers throughout the day and night.
Products.
Areva has a broad variety of items that it provides to its consumers. In 2011, Areva was noted as the most gainful organization.
Goals and Goals.
• Keeping in mind the vision and mission of the corporation, the company has laid down its objectives and goals. These objectives and goals are listed below.
• One goal of the company is to reach zero landfill status.
• Another goal of Areva is to waste minimum food throughout production. Most often, the food produced is squandered even before it reaches the clients.
• Another thing that Areva is working on is to enhance its packaging in such a way that it would assist it to reduce those complications and would likewise guarantee the shipment of high quality of its items to its consumers.
• Meet international requirements of the environment.
• Develop a relationship based upon trust with its consumers, business partners, staff members, and federal government.
Important Concerns.
Recently, Areva Case Study Solution Business is focusing more towards the strategy of NHW and investing more of its profits on the R&D technology. The nation is investing more on mergers and acquisitions to support its NHW technique. The target of the company is not attained as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Display H.
Situational Analysis.
Analysis of Current Technique, Vision and Goals.
The current Areva method is based on the principle of Nutritious, Health and Health (NHW). This technique handles the idea to bringing change in the customer choices about food and making the food things much healthier worrying about the health issues.
The vision of this strategy is based upon the secret technique 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 upon its nutritional worth. The products will be manufactured with extra dietary worth in contrast to all other items in market gaining it a plus on its nutritional material.
This technique was adopted to bring more nutritious plus delicious foods and beverages in market than ever. In competition with other companies, with an intention of maintaining its trust over customers as Areva Business has actually acquired more trusted by costumers.
Microenvironment Analysis (PESTEL Analysis).
The analysis utilized to measure the position of business in the market is done by utilizing PESTLE analysis, given in Exhibition A. Areva works under the guidelines and guidelines directed by federal government and food authority. The company is more concentrated on its services and products to make sure about the product quality and safety. This analysis will help in understanding environment of external market in the international food and beverage industries. (Parera, 2017).
Political.
The political impact on the business is significantly affected by the public law and regulations. The business needs to fulfill its requirements provided by government otherwise it has to pay fine. Areva is greatly supported by Federal government to fulfill all the criteria of requirements like acts of health and safety. In efforts to make good food, Areva is altering the standards of food and drink manufacturing. This might cause the infraction of governmental rules and policies.
Economic.
Initiation of business where the capital earnings of each specific matters for the increased net sale as this differs country-to-country. The economy of the Areva Company in U.S. is growing year by year with variable items launch specifically concentrating on the dietary food for infants.
Social.
The social environment keeps on altering with regard to time like the mindset of the consumer as well as their lifestyles. Any product or service of any business can not achieve success up until the business is not concerned about the living system of the customer. Areva is taking procedures to meet its goals as the world is in search of delicious and healthy food.
Technological.
In the development of service, tactical steps are somewhat compulsory. Areva is one of the top well-known multinational firm and by time it buys different departments to take its items to brand-new level. Areva is investing more on its R&D to make its products healthier and nutritious supplying consumers with health benefits.
Legal.
There is no such effect of legal aspects of Areva as it is more concerned over its regulations and laws.
Environmental
Areva, in regards to ecological impact is committed to work in environmentally friendly environment with conservation of the natural deposits and energy. As due to the production of larger number of products there may be a risk if the resources used are recyclable or not.
Competitive Forces Analysis (Porter's 5 Forces Design).
Areva Case Study Solution has actually acquired a number of business that assisted it in diversity and growth of its item's profile. This is the extensive description of the Porter's model of 5 forces of Areva Business, given up Exhibition B.
Competitiveness.
Areva is one of the leading business in this competitive market with a number of strong rivals like Unilever, Kraft foods and Group DANONE. Areva is running well in this race for last 150 years. The competition of other companies with Areva is rather high.
Threat of New Entrants.
A variety of barriers are there for the brand-new entrants to take place in the customer food market. Just a couple of entrants succeed in this market as there is a requirement to comprehend the customer requirement which needs time while recent rivals are well aware and has advanced with the consumer commitment over their items with time. There is low danger of brand-new entrants to Areva as it has quite big network of distribution internationally dominating with well-reputed image.
Bargaining Power of Providers.
In the food and drink market, Areva Case Study Help owes the biggest share of market requiring greater number of supply chains. In response, Areva has actually also been worried for its suppliers as it thinks in long-term relations.
Bargaining Power of Buyers.
There is high bargaining power of the buyers due to terrific competition. Changing cost is rather low for the consumers as lots of companies sale a number of similar products. This appears to be a great danger for any business. Thus, Areva Case Study Analysis makes sure to keep its customers pleased. This has actually led Areva to be among the faithful company in eyes of its buyers.
Threat of Replacements.
There has been an excellent danger of replacements as there are alternatives of a few of the Nestlé's products such as boiled water and pasteurized milk. There has also been a claim that some of its products are not safe to utilize resulting in the decreased sale. Therefore, Areva began highlighting the health advantages of its products to cope up with the substitutes.
Rival Analysis.
Areva Case Study Help covers a lot of the popular consumer brands like Package Kat and Nescafe etc. About 29 brands amongst all of its brands, each brand name made a revenue of about $1billion in 2010. Its huge part of sale is in North America constituting about 42% of its all sales. In Europe and U.S. the leading significant brands offered by Areva in these states have an excellent reliable share of market. Similarly Areva, Unilever and DANONE are two big industries of food and drinks as well as its main rivals. In the year 2010, Areva had earned its annual revenue by 26% increase due to the fact that of its increased food and beverages sale particularly in cooking things, ice-cream, drinks based on tea, and frozen food. On the other hand, DANONE, due to the increasing prices of shares resulting a boost of 38% in its profits. Areva Case Study Help lowered its sales cost by the adjustment of a new accounting procedure. Unilever has number of employees about 230,000 and functions in more than 160 nations and its London headquarter. It has actually ended up being the second biggest food and drink market in the West Europe with a market share of about 8.6% with only a distinction of 0.3 points with Areva. Unilever shares a market share of about 7.7 with Areva ending up being ranking and very first DANONE as third. Areva draws in local clients by its low cost of the item with the local taste of the products maintaining its first place in the global market. Areva company has about 280,000 workers and functions in more than 197 countries edging its competitors in many regions. Areva has actually likewise minimized its expense of supply by presenting E-marketing in contrast to its rivals.
Note: A brief contrast of Areva with its close competitors is given in Exhibit C.
SWOT Analysis.
The internal analysis and external of the business likewise can be done through SWOT Analysis, summarized in the Exhibit F.
Strengths.
• Areva has an experience of about 140 years, enabling business to better perform, in numerous scenarios.
• Nestlé's has existence in about 86 countries, making it an international leader in Food and Drink Industry.
• Areva has more than 2000 brand names, which increase the circle of its target consumers. These brand names include infant foods, family pet food, confectionary products, beverages etc. Famous brands of Areva consist of; Maggi, Kit-Kat, Nescafe, and so on
• Areva Case Study Help has large quantity of spending on R&D as compare to its competitors, making the company to release more innovative and healthy items. This development supplies the business a high competitive position in long run.
• After embracing its NHW Strategy, the company has done big amount of mergers and acquisitions which increase the sales growth and improve market position of Areva.
• Areva is a popular brand name with high customer's commitment and brand name recall. This brand loyalty of consumers increases the possibilities of simple market adoption of different brand-new brand names of Areva.
Weak points.
• Acquisitions of those business, like; Kraft frozen Pizza company can offer a negative signal to Areva consumers about their compromise over their core proficiency of much healthier foods.
• The growth I sales as compare to the business's financial investment in NHW Strategy are quite various. It will take long to alter the understanding of individuals ab out Areva as a business offering healthy and nutritious items.
Opportunities.
• Presenting more health associated products enables the business to capture the market in which customers are quite mindful about health.
• Developing countries like India and China has biggest markets worldwide. Expanding the market towards developing nations can increase the Areva company by increasing sales volume.
• Continue acquisitions and joint ventures increases the market share of the company.
• Increased relationships with schools, hotel chains, restaurants and so on can also increase the number of Areva Case Study Solution customers. Instructors can recommend their students to acquire Areva items.
Threats.
• Financial instability in countries, which are the possible markets for Areva, can create a number of problems for Areva.
• Shifting of products from regular to healthier, results in additional costs and can cause decrease company's profit margins.
• As Areva has an intricate supply chain, therefore failure of any of the level of supply chain can lead the business to face specific issues.
Division Analysis
Demographic Division
The group division of Areva Case Study Help is based on four elements; age, occupation, gender and income. Areva produces several products related to babies i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary products. Areva products are quite economical by nearly all levels, however its significant targeted consumers, in terms of income level are upper and middle middle level consumers.
Geographical Division
Geographical division of Areva Case Study Help is made up of its existence in practically 86 nations. Its geographical division is based upon 2 main factors i.e. average earnings level of the customer along with the environment of the area. Singapore Areva Company's division is done on the basis of the weather condition of the region i.e. hot, cold or warm.
Psychographic Segmentation
Psychographic segmentation of Areva is based upon the personality and life style of the client. Areva 3 in 1 Coffee target those consumers whose life style is rather busy and do not have much time.
Behavioral Division
Areva Case Help behavioral segmentation is based upon the mindset knowledge and awareness of the client. Its extremely nutritious items target those clients who have a health conscious attitude towards their usages.
VRIO Analysis
The VRIO analysis of Areva Business is a broad variety analysis providing the organization with an opportunity to obtain a viable competitive benefit against its competitors in the food and drink market, summed up in Display I.
Valuable
The resources utilized by the Areva company are important for the company or not. Such as the resources like finance, human resources, management of operations and professionals in marketing. This are some of the key important factors of for the identification of competitive benefit.
Rare
The valuable resources used by Areva are even rare or pricey. If these resources are frequently discovered that it would be much easier for the competitors and the new rivals in the industry to easily relocate competitors.
Replica
The imitation process is pricey for the competitors of Areva Case Solution Company. It can be done only in two various techniques i.e. product duplication which is produced and manufactured by Areva Company and launching of the replacement of the items with changing expense. This increases the risk of disruption to the recent structure of the industry.
Company
This element of VRIO analysis deals with the compatibility of the company to place in the market making productive use of its valuable resources which are tough to imitate. Regularly, the advancement of management is totally depending on the firm's execution technique and group. Thus, this polishes the skills of the company by time based on the choices made by firm for the development of its strategic capitals.
Quantitative Analysis
R&D Costs as a portion of sales are decreasing with increasing actual quantity of spending reveals that the sales are increasing at a greater rate than its R&D spending, and allow the company to more spend on R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is decreasing. This sign also shows a green light to the R&D costs, acquisitions and mergers.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of debts. This increasing debt ratio position a threat of default of Areva to its financiers and might lead a decreasing share costs. Therefore, in terms of increasing financial obligation ratio, the company must not invest much on R&D and needs to pay its existing debts to decrease the danger for financiers.
The increasing risk of financiers with increasing debt ratio and declining share costs can be observed by huge decrease of EPS of Areva Case Analysis stocks.
The sales growth of business is likewise low as compare to its mergers and acquisitions due to slow understanding structure of consumers. This sluggish development also impede business to further spend on its acquisitions and mergers.( Areva, Areva Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of charts and computations given in the Displays D and E.
TWOS Analysis.
TWOS analysis can be used to obtain various strategies based upon the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Exhibition H.
Strategies to exploit Opportunities using Strengths.
Areva Case Help ought to present more innovative products by big amount of R&D Costs and mergers and acquisitions. It could increase the market share of Areva and increase the revenue margins for the company. It could also supply Areva a long term competitive benefit over its rivals.
The worldwide growth of Areva must be focused on market capturing of developing countries by growth, attracting more customers through client's commitment. As developing countries are more populated than developed countries, it could increase the consumer circle of Areva.
Techniques to Get Rid Of Weak Points to Make Use Of Opportunities.
Areva Case Solution ought to do mindful acquisition and merger of companies, as it could impact the customer's and society's understandings about Areva. It ought to merge and obtain with those business which have a market track record of healthy and healthy companies. It would improve the perceptions of consumers about Areva.
Areva must not just invest its R&D on innovation, instead of it should likewise focus on the R&D spending over assessment of cost of different nutritious products. This would increase expense efficiency of its products, which will result in increasing its sales, due to decreasing rates, and margins.
Methods to utilize strengths to conquer dangers.
Areva needs to move to not just establishing however also to industrialized countries. It needs to widen its circle to numerous nations like Unilever which operates in about 170 plus nations.
Methods to conquer weak points to avoid risks.
Areva Case Solution ought to wisely control its acquisitions to prevent the threat of misconception from the consumers about Areva. This would not only improve the perception of customers about Areva however would also increase the sales, profit margins and market share of Areva.
Alternatives.
In order to sustain the brand in the market and keep the consumer undamaged with the brand name, there are 2 alternatives:.
Alternative: 1.
The Company needs to invest more on acquisitions than on the R&D.
Pros:.
1. Acquisitions would increase overall properties of the company, increasing the wealth of the company. Spending on R&D would be sunk expense.
2. The company can resell the gotten units in the market, if it stops working to execute its strategy. Nevertheless, amount spend on the R&D might not be revived, and it will be thought about completely sunk cost, if it do not provide possible outcomes.
3. Investing in R&D provide slow development in sales, as it takes long time to introduce an item. However, acquisitions provide quick outcomes, as it provide the company currently developed product, which can be marketed soon after the acquisition.
Cons:.
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the company to face misunderstanding of customers about Areva core values of healthy and healthy items.
2. Large costs on acquisitions than R&D would send out a signal of company's inadequacy of establishing ingenious items, and would results in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are already present in the market, making company not able to introduce new ingenious products.
Alternative: 2
The Company needs to invest more on its R&D instead of acquisitions.
Pros:
1. It would make it possible for the business to produce more innovative products.
2. It would offer the company a strong competitive position in the market.
3. It would allow the business to increase its targeted customers by presenting those items which can be used to an entirely brand-new market section.
4. Ingenious products will provide long term advantages and high market share in long term.
Cons:
1. It would decrease the profit margins of the business.
2. In case of failure, the entire costs on R&D would be considered as sunk cost, and would impact the company at big. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which could offer a negative signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with considerable costs on in R&D Program.
Pros:
1. It would enable the company to present brand-new ingenious products with less risk of transforming the costs on R&D into sunk expense.
2. It would supply a positive signal to the investors, as the general assets of the company would increase with its significant R&D costs.
3. It would not impact the revenue margins of the business at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in regards to the company's overall wealth as well as in regards to innovative products.
Cons:
1. Danger of conversion of R&D costs into sunk cost, greater than option 1 lower than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Intro of less number of ingenious products than alternative 2 and high variety of innovative products than alternative 1.
Recommendation
With the deep analysis of the above options, it is suggested that the company needs to pick the alternative 3 in order to preserve a competitive position in the long run. As the alternative 3 would enable the company to not just introduce ingenious and new products in the market it would also minimize the high expenses on R&D under alternative 2 and increase the revenue margins. It would make it possible for the business to increase its share rates as well, as investors want to invest more in companies with significant R&D costs and boost in the overall worth of the company.
Action and implementation Strategy
Method can be executed effectively by developing certain short term along with long term plans. These strategies could be as follows;
Short Term Strategy (0-1 year).
• Under the short-term strategy Areva Case Analysis must carry out numerous activities to execute its NHW technique effectively. These activities are as follows;.
• Get the audit of its brand portfolio done, to examine the core selling brands, which generate most of its income.
• Analyze the present target audience as well as the marketplace sector which is not consist of in the business's circle.
• Analyze the present financial information to measure the amount that ought to be invested in the R&D and acquisitions.
• Evaluate the possible investors and their nature, i.e. do they want long term benefits (capital gain), or the desire early revenues (dividend). It would let the company to know that just how much amount ought to be invested in R&D.
Mid Term Strategy (1-5 years).
• Get those companies in which the company has potential experience to deal with. Obtain most favorable organizations with a strong commitment to health, to construct the consumer's perceptions in the best direction.
• Focus more on acquisitions than R&D to develop the base in the consumer's mind about Areva values and vision and to avoid possible danger of sunk cost.
Long Term Plan (1-10 years).
• Acquire organizations with health as well as taste element, as the base for the Areva as a company producing healthy items has actually been developed under midterm strategy and now the company might move towards taste element too to comprehend the customers, which focus more on taste instead of health.
• Be more aggressive towards R&D than the acquisitions, as it is the significant time to build new items.
Conclusion.
Areva has actually remained the top market gamer for more than a years. It has actually institutionalized its strategies and culture to align itself with the market modifications and customer habits, which has actually eventually enabled it to sustain its market share. Though, Areva has actually developed substantial market share and brand identity in the city markets, it is advised that the business must focus on the backwoods in terms of establishing brand awareness, loyalty, and equity, such can be done by producing a specific brand allocation strategy through trade marketing methods, that draw clear distinction in between Areva Case Solution products and other competitor items. Furthermore, Areva needs to leverage its brand name 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 company to develop brand name equity for newly introduced and already produced products on a higher platform, making the effective use of resources and brand name image in the market.
