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Bon Star Hotel Case Study Solution & Analysis


Bon Star Hotel Case Study Help is presently among the biggest food chains worldwide. It was founded by Henri Bon Star Hotel in 1866, a German Pharmacist who initially introduced "Farine Lactee"; a combination of flour and milk to reduce and feed infants mortality rate. At the very same time, the Page bros from Switzerland also discovered The Anglo-Swiss Condensed Milk Business. The two ended up being rivals in the beginning but later on merged in 1905, leading to the birth of Bon Star Hotel.

Bon Star Hotel is now a transnational company. Unlike other multinational companies, it has senior executives from various countries and tries to make decisions thinking about the whole world. Bon Star Hotel Case Study Analysis presently has more than 500 factories around the world and a network spread across 86 countries.


The purpose of Bon Star Hotel Corporation is to improve the quality of life of individuals by playing its part and supplying healthy food. It wants to assist the world in shaping a healthy and better future for it. It likewise wants to encourage people to live a healthy life. While making certain that the business is being successful in the long run, that's how it plays its part for a better and healthy future


Nestlé's vision is to offer its consumers with food that is healthy, high in quality and safe to eat. It wants to be innovative and at the same time understand the requirements and requirements of its customers. Its vision is to grow quick and supply items that would please the needs of each age. Bon Star Hotel pictures to establish a well-trained labor force which would assist the company to grow.


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


Bon Star Hotel has a broad variety of products that it offers to its customers. In 2011, Bon Star Hotel was noted as the most gainful company.

Goals and Goals.

• Keeping in mind the vision and mission of the corporation, the business has put down its objectives and goals. These goals and objectives are listed below.
• One objective of the company is to reach absolutely no landfill status. It is pursuing no waste, where no waste of the factory is landfilled. It encourages its workers to take the most out of the by-products. (Bon Star Hotel, aboutus, 2017).
• Another goal of Bon Star Hotel is to lose minimum food during production. Frequently, the food produced is lost even before it reaches the customers.
• Another thing that Bon Star Hotel is working on is to improve its product packaging in such a method that it would assist it to reduce the above-mentioned problems and would also guarantee the shipment of high quality of its items to its consumers.
• Meet worldwide standards of the environment.
• Develop a relationship based on trust with its consumers, business partners, workers, and federal government.

Vital Problems.

Recently, Bon Star Hotel Case Study Help Business is focusing more towards the strategy of NHW and investing more of its revenues on the R&D innovation. The nation is investing more on mergers and acquisitions to support its NHW strategy. The target of the business 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%, given in Display H.

Situational Analysis.

Analysis of Present Method, Vision and Goals.

The existing Bon Star Hotel technique is based on the principle of Nutritious, Health and Wellness (NHW). This method handles the idea to bringing modification in the client choices about food and making the food things healthier concerning about the health problems.

The vision of this method is based upon the key approach i.e. 60/40+ which simply suggests that the items will have a score of 60% on the basis of taste and 40% is based upon its dietary worth. The products will be made with additional nutritional worth in contrast to all other products in market acquiring it a plus on its nutritional content.

This method was adopted to bring more healthy plus delicious foods and drinks in market than ever. In competition with other business, with an intent of keeping its trust over consumers as Bon Star Hotel Company has acquired more relied on by customers.

Microenvironment Analysis (PESTEL Analysis).

The analysis used to measure the position of business in the market is done by using PESTLE analysis, given up Exhibition A. Bon Star Hotel works under the rules and guidelines directed by federal government and food authority. The company is more focused on its services and products to make sure about the item quality and security. This analysis will help in understanding environment of external market in the global food and drink markets. (Parera, 2017).


The political effect on the business is significantly affected by the government laws and policies. The business needs to satisfy its requirements offered by government otherwise it needs to pay fine. Bon Star Hotel is greatly supported by Government to meet all the criteria of requirements like acts of health and wellness. In efforts to manufacture great food, Bon Star Hotel is changing the requirements of food and beverage production. This might trigger the infraction of governmental rules and regulations.


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 Bon Star Hotel Business in U.S. is growing year by year with variable products launch particularly focusing on the nutritional food for babies.


The social environment keeps on changing with regard to time like the mindset of the customer along with their way of lives. Any product or service of any business can not achieve success till the business is not concerned about the living system of the customer. Bon Star Hotel is taking procedures to satisfy its objectives as the world is in search of delicious and healthy food.


In the development of company, strategic procedures are somewhat mandatory. Bon Star Hotel is one of the top famous international company and by time it invests in different departments to take its items to brand-new level. Bon Star Hotel is spending more on its R&D to make its items much healthier and nutritious providing consumers with health benefits.


There is no such impact of legal factors of Bon Star Hotel as it is more concerned over its regulations and laws.


Bon Star Hotel, in regards to ecological impact is committed to operate in environment-friendly environment with conservation of the natural deposits and energy. If the resources used are recyclable or not, as due to the manufacturing of bigger number of products there may be a hazard.

Competitive Forces Analysis (Porter's Five Forces Model).

Bon Star Hotel Case Study Analysis has actually obtained a variety of business that helped it in diversity and development of its item's profile. This is the extensive explanation of the Porter's model of 5 forces of Bon Star Hotel Business, given up Exhibition B.


Bon Star Hotel is one of the leading company in this competitive market with a number of strong competitors like Unilever, Kraft foods and Group DANONE. Bon Star Hotel is running well in this race for last 150 years. The competition of other business with Bon Star Hotel is rather high.

Risk of New Entrants.

A variety of barriers are there for the new entrants to happen in the customer food market. Just a couple of entrants prosper in this market as there is a requirement to understand the consumer requirement which needs time while current rivals are aware and has advanced with the customer commitment over their items with time. There is low danger of brand-new entrants to Bon Star Hotel as it has rather large network of circulation globally controling with well-reputed image.

Bargaining Power of Suppliers.

In the food and drink market, Bon Star Hotel Case Study Solution owes the largest share of market needing higher number of supply chains. In action, Bon Star Hotel has actually also been concerned for its suppliers as it believes in long-lasting relations.

Bargaining Power of Purchasers.

There is high bargaining power of the buyers due to great competition. Changing cost is rather low for the consumers as lots of companies sale a number of comparable items. This seems to be a great risk for any business. Thus, Bon Star Hotel Case Study Help makes certain to keep its clients satisfied. This has led Bon Star Hotel to be among the loyal business in eyes of its buyers.

Threat of Replacements.

There has actually been a fantastic danger of alternatives as there are replacements of some of the Nestlé's products such as boiled water and pasteurized milk. There has likewise been a claim that a few of its products are not safe to use leading to the reduced sale. Therefore, Bon Star Hotel started highlighting the health advantages of its products to cope up with the substitutes.

Competitor Analysis.

Bon Star Hotel Case Study Help covers many of the popular customer brands like Package Kat and Nescafe and so on. About 29 brands among all of its brand names, each brand earned an income of about $1billion in 2010. Its major part of sale remains in The United States and Canada making up about 42% of its all sales. In Europe and U.S. the top significant brand names offered by Bon Star Hotel in these states have a terrific trustworthy share of market. Bon Star Hotel, Unilever and DANONE are two big markets of food and beverages as well as its primary rivals. In the year 2010, Bon Star Hotel had actually made its yearly revenue by 26% boost since of its increased food and beverages sale particularly in cooking stuff, ice-cream, drinks based on tea, and frozen food. On the other hand, DANONE, due to the increasing costs of shares resulting an increase of 38% in its earnings. Bon Star Hotel Case Study Help decreased its sales expense by the adjustment of a new accounting procedure. Unilever has variety of staff members about 230,000 and functions in more than 160 nations and its London headquarter also. It has become 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 Bon Star Hotel. Unilever shares a market share of about 7.7 with Bon Star Hotel becoming first and ranking DANONE as third. Bon Star Hotel brings in local costumers by its low expense of the item with the local taste of the products maintaining its first place in the worldwide market. Bon Star Hotel company has about 280,000 staff members and functions in more than 197 countries edging its competitors in lots of areas. Bon Star Hotel has likewise reduced its expense of supply by presenting E-marketing in contrast to its rivals.

Note: A short comparison of Bon Star Hotel with its close competitors is given in Exhibit C.

SWOT Analysis.

The internal analysis and external of the company likewise can be done through SWOT Analysis, summarized in the Exhibition F.


• Bon Star Hotel has an experience of about 140 years, enabling company to better perform, in different circumstances.
• Nestlé's has presence in about 86 countries, making it an international leader in Food and Drink Market.
• Bon Star Hotel has more than 2000 brands, which increase the circle of its target consumers. Famous brands of Bon Star Hotel include; Maggi, Kit-Kat, Nescafe, and so on
• Bon Star Hotel Case Study Help has large big quantity spending on R&D as compare to its competitors, making the company business launch release innovative ingenious nutritious productsItems
• After embracing its NHW Technique, the company has done big amount of mergers and acquisitions which increase the sales growth and enhance market position of Bon Star Hotel.
• Bon Star Hotel is a widely known brand with high consumer's loyalty and brand recall. This brand name loyalty of customers increases the chances of easy market adoption of numerous new brands of Bon Star Hotel.
Weak points.
• Acquisitions of those company, like; Kraft frozen Pizza service can provide a negative signal to Bon Star Hotel customers about their compromise over their core competency of much healthier foods.
• The development I sales as compare to the business's financial investment in NHW Method are quite various. It will take long to alter the perception of people ab out Bon Star Hotel as a business selling healthy and healthy items.


• Presenting more health associated items allows the business to capture the market in which customers are quite mindful about health.
• Developing countries like India and China has biggest markets worldwide. Hence expanding the marketplace towards developing countries can increase the Bon Star Hotel organisation by increasing sales volume.
• Continue acquisitions and joint endeavors increases the market share of the business.
• Increased relationships with schools, hotel chains, restaurants etc. can likewise increase the variety of Bon Star Hotel Case Study Help customers. For example, instructors can suggest their trainees to buy Bon Star Hotel items.


• Economic instability in nations, which are the possible markets for Bon Star Hotel, can create a number of issues for Bon Star Hotel.
• Shifting of products from normal to much healthier, causes additional costs and can result in decrease company's earnings margins.
• As Bon Star Hotel has an intricate supply chain, therefore failure of any of the level of supply chain can lead the business to face particular problems.

Division Analysis

Group Division

The market segmentation of Bon Star Hotel Case Study Solution is based upon 4 elements; age, gender, income and occupation. For example, Bon Star Hotel produces a number of items associated with children i.e. Cerelac, Nido, and so on and related to adults i.e. confectionary items. Bon Star Hotel items are quite inexpensive by nearly all levels, but its significant targeted customers, in terms of earnings level are middle and upper middle level clients.

Geographical Segmentation

Geographical division of Bon Star Hotel Case Study Solution is made up of its presence in practically 86 nations. Its geographical segmentation is based upon 2 primary factors i.e. typical income level of the customer along with the environment of the area. Singapore Bon Star Hotel Company's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Bon Star Hotel is based upon the character and life style of the customer. For example, Bon Star Hotel 3 in 1 Coffee target those consumers whose lifestyle is rather hectic and don't have much time.

Behavioral Division

Bon Star Hotel Case Analysis behavioral division is based upon the attitude knowledge and awareness of the consumer. For instance its extremely healthy products target those customers who have a health mindful attitude towards their usages.

VRIO Analysis

The VRIO analysis of Bon Star Hotel Company is a broad variety analysis offering the company with a possibility to acquire a feasible competitive benefit against its rivals in the food and beverage market, summarized in Display I.

Prized Possession

The resources utilized by the Bon Star Hotel 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 essential important elements of for the recognition of competitive benefit.


The important resources utilized by Bon Star Hotel are pricey or even uncommon. , if these resources are typically discovered that it would be easier for the competitors and the new competitors in the industry to easily move in competitors.


The imitation process is pricey for the competitors of Bon Star Hotel Case Solution Company. It can be done just in two various methods i.e. item duplication which is produced and produced by Bon Star Hotel Business and introducing of the alternative of the products with switching cost. This increases the threat of disturbance to the recent structure of the industry.


This element of VRIO analysis handle the compatibility of the business to position in the market making productive usage of its valuable resources which are hard to mimic. Often, the development of management is completely dependent on the company's execution method and team. Therefore, this polishes the skills of the company by time based upon the choices made by company for the progression of its tactical capitals.

Quantitative Analysis

R&D Spending as a percentage 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 permit the business to more invest in R&D.

Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indication likewise reveals 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 present a threat of default of Bon Star Hotel to its investors and could lead a declining share prices. Therefore, in terms of increasing debt ratio, the firm needs to not invest much on R&D and needs to pay its existing financial obligations to reduce the risk for financiers.

The increasing risk of investors with increasing financial obligation ratio and declining share rates can be observed by huge decline of EPS of Bon Star Hotel Case Analysis stocks.

The sales development of business is likewise low as compare to its acquisitions and mergers due to slow understanding building of customers. This slow development also hinder business to additional spend on its acquisitions and mergers.( Bon Star Hotel, Bon Star Hotel Financial Reports, 2006-2010).

Note: All the above analysis is done on the basis of graphs and computations given up the Exhibitions D and E.

TWOS Analysis.

2 analysis can be utilized to obtain different techniques based upon the SWOT Analysis given above. A quick summary of TWOS Analysis is given in Exhibition H.

Strategies to make use of Opportunities utilizing Strengths.

Bon Star Hotel Case Analysis ought to introduce more ingenious products by large quantity of R&D Spending and mergers and acquisitions. It could increase the marketplace share of Bon Star Hotel and increase the revenue margins for the business. It might likewise provide Bon Star Hotel a long term competitive benefit over its competitors.

The global expansion of Bon Star Hotel need to be focused on market recording of developing nations by growth, attracting more consumers through customer's loyalty. As developing countries are more populous than developed nations, it could increase the client circle of Bon Star Hotel.

Techniques to Overcome Weak Points to Exploit Opportunities.

Bon Star Hotel Case Help needs to do cautious acquisition and merger of organizations, as it might impact the customer's and society's understandings about Bon Star Hotel. It ought to get and combine with those business which have a market track record of healthy and nutritious companies. It would improve the understandings of customers about Bon Star Hotel.

Bon Star Hotel should not just spend its R&D on innovation, instead of it ought to likewise focus on the R&D costs over evaluation of expense of different healthy items. This would increase cost efficiency of its items, which will lead to increasing its sales, due to declining prices, and margins.

Techniques to use strengths to get rid of risks.

Bon Star Hotel Case Analysis must transfer to not just establishing but also to developed nations. It should expands its geographical growth. This wide geographical expansion towards developing and developed countries would reduce the risk of prospective losses in times of instability in different nations. It should expand its circle to different countries like Unilever which runs in about 170 plus nations.

Techniques to conquer weak points to avoid dangers.

Bon Star Hotel needs to wisely manage its acquisitions to prevent the risk of misunderstanding from the consumers about Bon Star Hotel. It needs to acquire and combine with those nations having a goodwill of being a healthy business in the market. This would not just enhance the perception of customers about Bon Star Hotel but would also increase the sales, revenue margins and market share of Bon Star Hotel. It would also make it possible for the business to utilize its possible resources effectively on its other operations instead of acquisitions of those companies slowing the NHW strategy development.


In order to sustain the brand name in the market and keep the consumer undamaged with the brand, there are 2 alternatives:.

Option: 1.

The Company ought to invest more on acquisitions than on the R&D.


1. Acquisitions would increase total properties of the company, increasing the wealth of the business. However, spending on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it fails to implement its strategy. Nevertheless, amount invest in the R&D might not be revived, and it will be considered completely sunk expense, if it do not provide potential results.
3. Spending on R&D provide sluggish development in sales, as it takes long period of time to present a product. Acquisitions offer fast results, as it supply the business already established product, which can be marketed soon after the acquisition.


1. Acquisition of company's which do not fit with the company's values like Kraftz foods can lead the business to face mistaken belief of consumers about Bon Star Hotel core values of healthy and healthy products.
2. Large costs on acquisitions than R&D would send out a signal of company's inefficiency of developing ingenious products, and would outcomes in consumer's dissatisfaction.
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 business not able to present new innovative items.

Alternative: 2

The Company should invest more on its R&D instead of acquisitions.


1. It would make it possible for the company to produce more innovative items.
2. It would supply the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted consumers by introducing those items which can be used to a totally new market section.
4. Innovative products will provide long term advantages and high market share in long term.


1. It would reduce the earnings margins of the business.
2. In case of failure, the entire costs on R&D would be thought about as sunk cost, and would impact the company at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which could supply an unfavorable signal to the investors, and could result I declining stock costs.

Alternative 3:

Continue its acquisitions and mergers with significant costs on in R&D Program.


1. It would permit the business to introduce brand-new innovative items with less danger of converting the costs on R&D into sunk expense.
2. It would offer a favorable signal to the investors, as the total possessions of the business would increase with its substantial R&D spending.
3. It would not impact the earnings 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 general wealth in addition to in regards to ingenious items.


1. Danger of conversion of R&D spending into sunk cost, higher than alternative 1 lesser than alternative 2.
2. Danger of misunderstanding about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Intro of less variety of ingenious products than alternative 2 and high variety of ingenious products than alternative 1.


With the deep analysis of the above alternatives, it is suggested that the business should select the alternative 3 in order to keep a competitive position in the long run. As the alternative 3 would make it possible for the business to not just present ingenious and new products in the market it would likewise lower the high expenses on R&D under alternative 2 and increase the profit margins. It would make it possible for the business to increase its share prices also, as investors are willing to invest more in companies with considerable R&D spending and boost in the overall worth of the company.

Action and application Technique

Technique can be implemented successfully by establishing particular short-term as well as long term strategies. These strategies might be as follows;

Short-term Strategy (0-1 year).

• Under the short-term strategy Bon Star Hotel Case Solution should perform various activities to implement its NHW strategy effectively. These activities are as follows;.
• Get the audit of its brand portfolio done, to analyze the core selling brand names, which produce the majority of its profits.
• Evaluate the current target market as well as the market segment which is not include in the business's circle.
• Examine the existing financial data to measure the quantity that needs to be spent on the R&D and acquisitions.
• Analyze the possible financiers and their nature, i.e. do they want long term benefits (capital gain), or the desire early earnings (dividend). It would let the company to understand that how much amount ought to be invested in R&D.

Mid Term Strategy (1-5 years).

• Obtain those companies in which the business has possible experience to handle. Acquire most favorable companies with a strong dedication to health, to construct the client's understandings in the best instructions.
• Focus more on acquisitions than R&D to build the base in the consumer's mind about Bon Star Hotel worths and vision and to prevent prospective risk of sunk expense.

Long Term Strategy (1-10 years).

• Obtain organizations with health as well as taste element, as the base for the Bon Star Hotel as a business producing healthy products has been built under midterm strategy and now the business might move towards taste aspect as well to understand the customers, which focus more on taste rather than health.
• Be more aggressive towards R&D than the acquisitions, as it is the considerable time to construct new items.


Bon Star Hotel has remained the leading market gamer for more than a years. It has institutionalised its methods and culture to align itself with the marketplace modifications and consumer habits, which has actually eventually permitted it to sustain its market share. Bon Star Hotel has actually developed considerable market share and brand identity in the city markets, it is suggested that the company ought to focus on the rural locations in terms of establishing brand awareness, equity, and loyalty, such can be done by creating a specific brand name allocation strategy through trade marketing strategies, that draw clear distinction in between Bon Star Hotel items and other rival products. Bon Star Hotel ought to leverage 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 allow the company to develop brand name equity for freshly introduced and already produced products on a greater platform, making the efficient use of resources and brand image in the market.