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Economic Exposure Case Study Solution & Analysis


Economic Exposure is currently one of the greatest food chains worldwide. It was established by Henri Economic Exposure in 1866, a German Pharmacist who initially released "Farine Lactee"; a combination of flour and milk to reduce and feed infants mortality rate.

Economic Exposure is now a transnational business. Unlike other multinational companies, it has senior executives from various countries and tries to make decisions thinking about the whole world. Economic Exposure Case Study Solution currently has more than 500 factories worldwide and a network spread throughout 86 nations.


The function of Economic Exposure Corporation is to enhance the quality of life of individuals by playing its part and providing healthy food. While making sure that the company is succeeding in the long run, that's how it plays its part for a better and healthy future


Nestlé's vision is to offer its clients with food that is healthy, high in quality and safe to eat. Economic Exposure visualizes to develop a trained workforce which would assist the company to grow.


Nestlé's objective is that as currently, it is the leading business in the food market, it thinks in 'Good Food, Excellent Life". Its objective is to offer its customers with a variety of choices that are healthy and finest in taste too. It is concentrated on providing the very best food to its consumers throughout the day and night.


Economic Exposure has a wide range of items that it uses to its clients. In 2011, Economic Exposure was noted as the most rewarding company.

Goals and Objectives.

• Keeping in mind the vision and objective of the corporation, the company has laid down its goals and objectives. These objectives and objectives are listed below.
• One goal of the business is to reach zero land fill status.
• Another objective of Economic Exposure is to lose minimum food during production. Most often, the food produced is squandered even prior to it reaches the customers.
• Another thing that Economic Exposure is dealing with is to improve its product packaging in such a method that it would help it to decrease the above-mentioned problems and would also guarantee the shipment of high quality of its items to its clients.
• Meet international standards of the environment.
• Construct a relationship based on trust with its consumers, organisation partners, staff members, and government.

Vital Problems.

Recently, Economic Exposure Business is focusing more towards the technique of NHW and investing more of its profits on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW method. Nevertheless, the target of the business is not achieved as the sales were expected to grow greater at the rate of 10% each year and the operating margins to increase by 20%, given up Exhibit H. There is a requirement 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 Method, Vision and Goals.

The present Economic Exposure method is based on the concept of Nutritious, Health and Health (NHW). This strategy handles the idea to bringing modification in the customer preferences about food and making the food things much healthier worrying about the health issues.

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

This strategy was embraced to bring more tasty plus nutritious foods and beverages in market than ever. In competition with other business, with an intention of keeping its trust over clients as Economic Exposure Business has acquired more relied on by costumers.

Microenvironment Analysis (PESTEL Analysis).

The analysis utilized to measure the position of business in the market is done by using PESTLE analysis, offered in Exhibit A. Economic Exposure works under the regulations and rules directed by federal government and food authority. The company is more focused on its services and items to make sure about the item quality and security.


Economic Exposure is significantly supported by Federal government to satisfy all the criteria of requirements like acts of health and security. In efforts to manufacture excellent food, Economic Exposure Case Study Help is altering the requirements of food and beverage manufacturing.


Initiation of business where the capital income of each private matters for the increased net sale as this varies country-to-country. The economy of the Economic Exposure Company in U.S. is growing year by year with variable items launch particularly concentrating on the nutritional food for babies.


The social environment keeps changing with regard to time like the mindset of the customer as well as their way of lives. Any service or product of any company can not succeed till the business is not worried about the living system of the customer. Economic Exposure is taking steps to satisfy its goals as the world is in search of yummy and healthy food.


In the development of company, strategic procedures are somewhat necessary. Economic Exposure is one of the leading famous multinational firm and by time it invests in various departments to take its products to new level. Economic Exposure is spending more on its R&D to make its products healthier and healthy offering consumers with health advantages.


There is no such effect of legal aspects of Economic Exposure as it is more worried over its guidelines and laws.


Economic Exposure, in regards to ecological impact is committed to work in eco-friendly environment with conservation of the natural deposits and energy. As due to the manufacturing of larger variety of products there may be a risk if the resources utilized are recyclable or not.

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

Economic Exposure Case Study Solution has actually obtained a number of companies that assisted it in diversification and growth of its product's profile. This is the thorough explanation of the Porter's design of five forces of Economic Exposure Business, given up Exhibit B.


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

Risk of New Entrants.

A number of barriers are there for the new entrants to happen in the customer food market. Only a few entrants succeed in this market as there is a need to understand the customer need which requires time while recent rivals are well aware and has advanced with the customer commitment over their products with time. There is low hazard of brand-new entrants to Economic Exposure as it has quite big network of circulation globally controling with well-reputed image.

Bargaining Power of Providers.

In the food and beverage industry, Economic Exposure Case Study Help owes the biggest share of market needing greater number of supply chains. In response, Economic Exposure has also been concerned for its suppliers as it thinks in long-lasting relations.

Bargaining Power of Buyers.

There is high bargaining power of the purchasers due to terrific competitors. Switching expense is rather low for the customers as numerous companies sale a variety of comparable items. This appears to be a fantastic danger for any business. Thus, Economic Exposure Case Study Help makes certain to keep its clients pleased. This has led Economic Exposure to be one of the faithful company in eyes of its buyers.

Hazard of Alternatives.

There has been a great threat of replacements as there are alternatives of a few of the Nestlé's products such as boiled water and pasteurized milk. There has actually likewise been a claim that some of its items are not safe to utilize leading to the reduced sale. Therefore, Economic Exposure began highlighting the health benefits of its products to cope up with the replacements.

Rival Analysis.

Economic Exposure Case Study Help covers a lot of the popular consumer brand names like Kit Kat and Nescafe etc. About 29 brand names among all of its brand names, each brand name made an income 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 top significant brand names offered by Economic Exposure in these states have a terrific respectable share of market. Economic Exposure, Unilever and DANONE are 2 large industries of food and beverages as well as its primary rivals. In the year 2010, Economic Exposure had made its annual revenue by 26% boost because 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 costs of shares resulting a boost of 38% in its profits. Economic Exposure Case Study Solution reduced its sales cost by the adjustment of a brand-new accounting treatment. Unilever has number of workers about 230,000 and functions in more than 160 countries and its London headquarter as well. It has ended up being the second largest 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 Economic Exposure. Unilever shares a market share of about 7.7 with Economic Exposure becoming ranking and very first DANONE as third. Economic Exposure draws in regional customers by its low expense of the product with the local taste of the items keeping its top place in the international market. Economic Exposure business has about 280,000 employees and functions in more than 197 countries edging its competitors in lots of areas. Economic Exposure has actually also reduced its expense of supply by introducing E-marketing in contrast to its rivals.

Note: A brief comparison of Economic Exposure with its close rivals is given in Exhibit C.

SWOT Analysis.

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


• Economic Exposure has an experience of about 140 years, enabling business to much better carry out, in various circumstances.
• Nestlé's has presence in about 86 countries, making it an international leader in Food and Drink Market.
• Economic Exposure has more than 2000 brand names, which increase the circle of its target customers. These brands consist of infant foods, family pet food, confectionary items, drinks and so on. Famous brand names of Economic Exposure include; Maggi, Kit-Kat, Nescafe, etc.
• Economic Exposure Case Study Analysis has big amount of spending on R&D as compare to its competitors, making the company to release more healthy and ingenious products. This development supplies the business a high competitive position in long run.
• After adopting its NHW Strategy, the company has done large amount of mergers and acquisitions which increase the sales growth and enhance market position of Economic Exposure.
• Economic Exposure is a well-known brand name with high customer's loyalty and brand recall. This brand loyalty of customers increases the possibilities of easy market adoption of numerous new brands of Economic Exposure.
Weak points.
• Acquisitions of those company, like; Kraft frozen Pizza business can provide a negative signal to Economic Exposure clients about their compromise over their core proficiency of healthier foods.
• The development I sales as compare to the company's financial investment in NHW Strategy are quite different. It will take long to change the perception of people ab out Economic Exposure as a business offering healthy and healthy products.


• Presenting more health associated items enables the business to record the marketplace in which customers are rather mindful about health.
• Developing nations like India and China has largest markets on the planet. For this reason broadening the market towards establishing countries can enhance the Economic Exposure service 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 also increase the variety of Economic Exposure Case Study Analysis customers. For instance, instructors can advise their students to acquire Economic Exposure items.


• Financial instability in countries, which are the potential markets for Economic Exposure, can create numerous issues for Economic Exposure.
• Shifting of products from typical to healthier, causes extra expenses and can lead to decline company's profit margins.
• As Economic Exposure has an intricate supply chain, for that reason failure of any of the level of supply chain can lead the business to deal with certain problems.

Division Analysis

Market Division

The demographic division of Economic Exposure Case Study Solution is based on four elements; age, occupation, earnings and gender. For instance, Economic Exposure produces several products connected to infants i.e. Cerelac, Nido, and so on and related to grownups i.e. confectionary items. Economic Exposure items are rather inexpensive by almost all levels, but its major targeted customers, in terms of income level are upper and middle middle level customers.

Geographical Division

Geographical division of Economic Exposure Case Study Analysis is made up of its presence in almost 86 countries. Its geographical division is based upon two primary aspects i.e. typical earnings level of the consumer along with the climate of the region. For example, Singapore Economic Exposure Business's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Economic Exposure is based upon the character and lifestyle of the consumer. For example, Economic Exposure 3 in 1 Coffee target those clients whose lifestyle is quite busy and do not have much time.

Behavioral Segmentation

Economic Exposure Case Analysis behavioral segmentation is based upon the mindset understanding and awareness of the customer. Its extremely healthy products target those clients who have a health mindful attitude towards their intakes.

VRIO Analysis

The VRIO analysis of Economic Exposure Business is a broad range analysis supplying the organization with a chance to acquire a practical competitive advantage against its competitors in the food and beverage market, summarized in Exhibition I.

Prized Possession

The resources utilized by the Economic Exposure business are valuable for the business or not. Such as the resources like financing, personnels, management of operations and experts in marketing. This are some of the crucial valuable elements of for the recognition of competitive advantage.


The important resources used by Economic Exposure are costly or even rare. , if these resources are typically discovered that it would be much easier for the competitors and the new rivals in the industry to effortlessly move in competitors.


The replica procedure is costly for the competitors of Economic Exposure Case Solution Business. It can be done just in two various strategies i.e. item duplication which is produced and produced by Economic Exposure Business and introducing of the replacement of the products with switching expense. This increases the threat of disturbance to the recent structure of the industry.


This component of VRIO analysis handle the compatibility of the company to position in the market making productive use of its valuable resources which are challenging to imitate. Often, the development of management is absolutely depending on the company's execution strategy and team. Thus, this polishes the abilities of the company by time based on the decisions made by firm for the development of its strategic capitals.

Quantitative Analysis

R&D Costs as a percentage of sales are declining with increasing real amount of spending reveals that the sales are increasing at a greater rate than its R&D costs, and permit the company to more invest in R&D.

Net Earnings Margin is increasing while R&D as a portion of sales is decreasing. This sign likewise reveals a green light to the R&D spending, acquisitions and mergers.

Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of financial obligations. This increasing financial obligation ratio pose a danger of default of Economic Exposure to its financiers and might lead a decreasing share rates. In terms of increasing financial obligation ratio, the firm ought to not invest much on R&D and needs to pay its existing debts to decrease the threat for investors.

The increasing threat of financiers with increasing debt ratio and declining share costs can be observed by substantial decrease of EPS of Economic Exposure Case Help stocks.

The sales development of business is also low as compare to its mergers and acquisitions due to slow perception structure of consumers. This sluggish development likewise impede business to additional spend on its acquisitions and mergers.( Economic Exposure, Economic Exposure Financial Reports, 2006-2010).

Keep in mind: All the above analysis is done on the basis of calculations and Charts given up the Exhibits D and E.

TWOS Analysis.

2 analysis can be used to derive different strategies based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given in Exhibit H.

Methods to exploit Opportunities using Strengths.

Economic Exposure Case Solution must introduce more innovative products by big quantity of R&D Spending and acquisitions and mergers. It could increase the market share of Economic Exposure and increase the revenue margins for the company. It might likewise supply Economic Exposure a long term competitive advantage over its competitors.

The international growth of Economic Exposure ought to be concentrated on market catching of developing countries by growth, bring in more consumers through customer's loyalty. As developing countries are more populated than industrialized nations, it might increase the customer circle of Economic Exposure.

Strategies to Get Rid Of Weaknesses to Make Use Of Opportunities.

Economic Exposure Case Solution must do careful acquisition and merger of companies, as it could impact the customer's and society's understandings about Economic Exposure. It should obtain and merge with those business which have a market reputation of healthy and healthy companies. It would improve the understandings of customers about Economic Exposure.

Economic Exposure ought to not just invest its R&D on innovation, rather than it must likewise concentrate on the R&D spending over assessment of expense of numerous healthy products. This would increase expense efficiency of its items, which will result in increasing its sales, due to decreasing prices, and margins.

Methods to utilize strengths to overcome threats.

Economic Exposure Case Analysis needs to relocate to not just establishing however likewise to industrialized nations. It needs to expands its geographical growth. This large geographical expansion towards developing and established countries would reduce the threat of potential losses in times of instability in various countries. It should expand its circle to various countries like Unilever which runs in about 170 plus countries.

Techniques to overcome weaknesses to avoid threats.

Economic Exposure must wisely control its acquisitions to prevent the threat of misconception from the consumers about Economic Exposure. It needs to obtain and combine with those nations having a goodwill of being a healthy business in the market. This would not just improve the understanding of consumers about Economic Exposure however would likewise increase the sales, profit margins and market share of Economic Exposure. It would also enable the business to use its possible resources efficiently on its other operations instead of acquisitions of those companies slowing the NHW technique growth.


In order to sustain the brand name in the market and keep the customer intact 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 possessions of the company, increasing the wealth of the business. Spending on R&D would be sunk expense.
2. The company can resell the acquired systems in the market, if it stops working to execute its method. Nevertheless, amount invest in the R&D could not be revived, and it will be considered entirely sunk expense, if it do not offer possible outcomes.
3. Investing in R&D supply sluggish development in sales, as it takes long period of time to present an item. However, acquisitions supply quick outcomes, as it provide the company currently developed product, which can be marketed soon after the acquisition.


1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the business to deal with misunderstanding of consumers about Economic Exposure core values of healthy and healthy products.
2. Large spending on acquisitions than R&D would send a signal of company's ineffectiveness of developing innovative items, and would outcomes in customer's dissatisfaction.
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 business not able to present brand-new innovative items.

Option: 2

The Company must invest more on its R&D rather than acquisitions.


1. It would enable 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 customers by introducing those items which can be provided to an entirely brand-new market sector.
4. Innovative products will provide long term advantages and high market share in long run.


1. It would reduce the profit margins of the business.
2. In case of failure, the whole costs on R&D would be thought about as sunk cost, and would affect the company at large. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which might provide an unfavorable signal to the investors, and could result I declining stock prices.

Alternative 3:

Continue its acquisitions and mergers with considerable spending on in R&D Program.


1. It would allow the business to introduce brand-new ingenious products with less risk of converting the costs on R&D into sunk cost.
2. It would supply a favorable signal to the investors, as the general properties of the business would increase with its significant R&D costs.
3. It would not impact the earnings margins of the business at a large rate as compare to alternative 2.
4. It would provide the business a strong long term market position in regards to the company's overall wealth as well as in terms of innovative items.


1. Risk of conversion of R&D costs into sunk cost, higher than option 1 lower than alternative 2.
2. Threat of misunderstanding about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less number of innovative items than alternative 2 and high variety of innovative products than alternative 1.


With the deep analysis of the above options, it is recommended that the business needs to select the alternative 3 in order to maintain a competitive position in the long run. As the alternative 3 would enable the company to not only introduce innovative and new products in the market it would likewise decrease the high expenses on R&D under alternative 2 and increase the earnings margins. It would enable the company to increase its share rates as well, as investors want to invest more in business with considerable R&D spending and increase in the total worth of the company.

Action and execution Method

Technique can be implemented effectively by establishing certain short-term as well as long term plans. These strategies could be as follows;

Short-term Strategy (0-1 year).

• Under the short term plan Economic Exposure Case Analysis should perform numerous activities to implement its NHW technique effectively. These activities are as follows;.
• Get the audit of its brand name portfolio done, to take a look at the core selling brand names, which create the majority of its earnings.
• Evaluate the present target market along with the market section which is not consist of in the business's circle.
• Examine the present financial information to measure the quantity that ought to be spent on the R&D and acquisitions.
• Evaluate the possible financiers and their nature, i.e. do they desire long term benefits (capital gain), or the desire early profits (dividend). It would let the business to know that just how much amount must be invested in R&D.

Mid Term Plan (1-5 years).

• Obtain those organizations in which the business has prospective experience to deal with. Acquire most favorable organizations with a strong dedication to health, to construct the consumer's understandings in the right instructions.
• Focus more on acquisitions than R&D to construct the base in the customer's mind about Economic Exposure values and vision and to avoid possible risk of sunk cost.

Long Term Plan (1-10 years).

• Acquire companies with health as well as taste factor, as the base for the Economic Exposure as a business producing healthy items has actually been constructed under midterm strategy and now the company might move towards taste aspect too to understand 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 develop brand-new products.


Economic Exposure Case Help has actually established considerable market share and brand name identity in the city markets, it is advised that the company should focus on the rural locations in terms of establishing brand awareness, loyalty, and equity, such can be done by creating a specific brand allotment method through trade marketing methods, that draw clear difference between Economic Exposure items and other rival items. This will enable the business to develop brand name equity for recently introduced and currently produced products on a greater platform, making the effective usage of resources and brand name image in the market.