Freedom Technology Services Case Study Solution and Analysis
Introduction
Freedom Technology Services Case Study Analysis is currently among the most significant food cycle worldwide. It was founded by Henri Freedom Technology Services in 1866, a German Pharmacist who initially released "Farine Lactee"; a combination of flour and milk to feed babies and reduce mortality rate. At the very same time, the Page bros from Switzerland also found The Anglo-Swiss Condensed Milk Business. The 2 became competitors initially however in the future merged in 1905, resulting in the birth of Freedom Technology Services.
Freedom Technology Services is now a multinational company. Unlike other international companies, it has senior executives from different countries and attempts to make choices considering the entire world. Freedom Technology Services Case Study Help currently has more than 500 factories worldwide and a network spread throughout 86 nations.
Function
The purpose of Freedom Technology Services Corporation is to boost the quality of life of individuals by playing its part and offering healthy food. While making sure that the business is being successful in the long run, that's how it plays its part for a better and healthy future
Vision
Nestlé's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. It wishes to be innovative and all at once comprehend the requirements and requirements of its consumers. Its vision is to grow quick and supply items that would satisfy the requirements of each age group. Freedom Technology Services imagines to develop a well-trained labor force which would assist the company to grow.
Objective.
Nestlé's objective is that as presently, it is the leading company in the food market, it thinks in 'Good Food, Good Life". Its mission is to provide its customers with a range of choices that are healthy and best in taste as well. It is concentrated on providing the best food to its customers throughout the day and night.
Products.
Freedom Technology Services has a large variety of items that it offers to its clients. In 2011, Freedom Technology Services was listed as the most rewarding company.
Objectives and goals.
• Keeping in mind the vision and mission of the corporation, the company has actually laid down its goals and goals. These goals and goals are noted below.
• One objective of the company is to reach zero garbage dump status.
• Another objective of Freedom Technology Services is to squander minimum food throughout production. Most often, the food produced is wasted even prior to it reaches the consumers.
• Another thing that Freedom Technology Services is working on is to enhance its packaging in such a way that it would help it to lower those issues and would likewise guarantee the delivery of high quality of its products to its clients.
• Meet worldwide standards of the environment.
• Build a relationship based on trust with its customers, service partners, workers, and federal government.
Vital Concerns.
Just Recently, Freedom Technology Services Case Study Solution Business is focusing more towards the strategy of NHW and investing more of its revenues on the R&D innovation. The country is investing more on mergers and acquisitions to support its NHW strategy. The target of the business is not accomplished as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given in Exhibition H.
Situational Analysis.
Analysis of Existing Technique, Vision and Goals.
The existing Freedom Technology Services method is based on the concept of Nutritious, Health and Health (NHW). This technique handles the concept to bringing change in the consumer preferences about food and making the food things much healthier worrying about the health issues.
The vision of this method is based on the secret technique i.e. 60/40+ which just indicates that the items will have a rating of 60% on the basis of taste and 40% is based upon its dietary value. The products will be produced with extra nutritional worth in contrast to all other products in market getting it a plus on its nutritional content.
This method was embraced to bring more nutritious plus yummy foods and beverages in market than ever. In competitors with other companies, with an intention of retaining its trust over consumers as Freedom Technology Services Business has actually gotten more trusted by customers.
Microenvironment Analysis (PESTEL Analysis).
The analysis utilized to determine the position of company in the market is done by utilizing PESTLE analysis, given up Display A. Freedom Technology Services works under the regulations and rules directed by federal government and food authority. The business is more focused on its services and products to make certain about the item quality and security. This analysis will assist in comprehending environment of external market in the international food and beverage industries. (Parera, 2017).
Political.
The political influence on the business is greatly influenced by the public law and guidelines. The company has to satisfy its requirements offered by federal government otherwise it has to pay fine. Freedom Technology Services is significantly supported by Federal government to satisfy all the criteria of requirements like acts of health and safety. In efforts to produce great food, Freedom Technology Services is changing the standards of food and drink production. This might trigger the infraction of governmental rules and regulations.
Economic.
Initiation of the business where the capital earnings of each individual matters for the increased net sale as this varies country-to-country. The economy of the Freedom Technology Services Company in U.S. is growing year by year with variable products launch especially focusing on the nutritional food for babies.
Social.
The social environment keeps altering with regard to time like the mindset of the customer as well as their way of lives. Any product or service of any company can not succeed till the business is not concerned about the living system of the consumer. Freedom Technology Services is taking steps to satisfy its goals as the world remains in search of healthy and tasty food.
Technological.
In the development of company, tactical measures are somewhat necessary. Freedom Technology Services is among the leading well-known international company and by time it purchases different departments to take its products to brand-new level. Freedom Technology Services is spending more on its R&D to make its items much healthier and healthy providing customers with health advantages.
Legal.
There is no such effect of legal elements of Freedom Technology Services as it is more concerned over its laws and guidelines.
Environmental
Freedom Technology Services, in terms of environmental impact is committed to work in environment-friendly environment with conservation of the natural resources and energy. If the resources utilized are recyclable or not, as due to the manufacturing of bigger number of items there might be a danger.
Competitive Forces Analysis (Porter's Five Forces Model).
Freedom Technology Services Case Study Help has actually gotten a number of companies that helped it in diversification and development of its product's profile. This is the detailed explanation of the Porter's model of five forces of Freedom Technology Services Business, given up Display B.
Competitiveness.
Freedom Technology Services is one of the top company in this competitive industry with a number of strong competitors like Unilever, Kraft foods and Group DANONE. Freedom Technology Services is running well in this race for last 150 years. The competitors of other business with Freedom Technology Services is rather high.
Risk of New Entrants.
A variety of barriers are there for the new entrants to occur in the consumer 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 competitors are aware and has actually progressed with the consumer loyalty over their products with time. There is low risk of new entrants to Freedom Technology Services as it has rather big network of distribution worldwide controling with well-reputed image.
Bargaining Power of Providers.
In the food and drink industry, Freedom Technology Services Case Study Analysis owes the biggest share of market requiring greater number of supply chains. In action, Freedom Technology Services has actually likewise been worried for its suppliers as it believes in long-term relations.
Bargaining Power of Purchasers.
There is high bargaining power of the buyers due to excellent competitors. Switching expense is rather low for the consumers as lots of companies sale a variety of comparable items. This seems to be an excellent risk for any company. Therefore, Freedom Technology Services Case Study Solution ensures to keep its consumers pleased. This has led Freedom Technology Services to be among the faithful company in eyes of its purchasers.
Danger of Alternatives.
There has actually been a fantastic threat of substitutes as there are replacements of a few of the Nestlé's items such as boiled water and pasteurized milk. There has likewise been a claim that some of its products are not safe to utilize leading to the decreased sale. Hence, Freedom Technology Services started highlighting the health benefits of its products to cope up with the replacements.
Competitor Analysis.
Freedom Technology Services Case Study Analysis covers a lot of the popular customer brand names like Set Kat and Nescafe etc. About 29 brands amongst all of its brands, each brand earned a revenue of about $1billion in 2010. Its major part of sale is in North America making up about 42% of its all sales. In Europe and U.S. the top major brands sold by Freedom Technology Services in these states have a terrific reliable share of market. Freedom Technology Services, Unilever and DANONE are 2 large industries of food and drinks as well as its main competitors. In the year 2010, Freedom Technology Services had earned its yearly revenue by 26% increase due to the fact that of its increased food and drinks sale specifically in cooking stuff, ice-cream, beverages 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 profits. Freedom Technology Services Case Study Solution reduced its sales cost by the adjustment of a new accounting treatment. Unilever has variety of workers about 230,000 and functions in more than 160 countries and its London headquarter also. It has actually become the second largest food and drink market in the West Europe with a market share of about 8.6% with just a difference of 0.3 points with Freedom Technology Services. Unilever shares a market share of about 7.7 with Freedom Technology Services becoming ranking and very first DANONE as third. Freedom Technology Services attracts local costumers by its low cost of the item with the local taste of the products preserving its first place in the worldwide market. Freedom Technology Services business has about 280,000 staff members and functions in more than 197 countries edging its rivals in many regions. Freedom Technology Services has also minimized its cost of supply by introducing E-marketing in contrast to its competitors.
Keep in mind: A short comparison of Freedom Technology Services with its close competitors is given in Display C.
SWOT Analysis.
The internal analysis and external of the business likewise can be done through SWOT Analysis, summed up in the Exhibit F.
Strengths.
• Freedom Technology Services has an experience of about 140 years, making it possible for company to much better carry out, in different situations.
• Nestlé's has presence in about 86 nations, making it an international leader in Food and Beverage Industry.
• Freedom Technology Services has more than 2000 brands, which increase the circle of its target consumers. Famous brand names of Freedom Technology Services include; Maggi, Kit-Kat, Nescafe, and so on
• Freedom Technology Services Case Study Analysis has large big quantity spending costs R&D as compare to its competitorsRivals making the company business launch release nutritious and innovative products.
• After embracing its NHW Strategy, the company has done big quantity of mergers and acquisitions which increase the sales development and enhance market position of Freedom Technology Services.
• Freedom Technology Services is a widely known brand name with high customer's loyalty and brand name recall. This brand commitment of customers increases the opportunities of easy market adoption of different new brand names of Freedom Technology Services.
Weak points.
• Acquisitions of those business, like; Kraft frozen Pizza company can give an unfavorable signal to Freedom Technology Services customers about their compromise over their core proficiency of healthier foods.
• The development I sales as compare to the business's investment in NHW Strategy are quite various. It will take long to alter the perception of individuals ab out Freedom Technology Services as a company selling healthy and healthy items.
Opportunities.
• Introducing more health related items allows the company to record the marketplace in which consumers are quite conscious about health.
• Developing countries like India and China has biggest markets in the world. Expanding the market towards establishing nations can increase the Freedom Technology Services business by increasing sales volume.
• Continue acquisitions and joint ventures increases the marketplace share of the business.
• Increased relationships with schools, hotel chains, restaurants and so on can likewise increase the number of Freedom Technology Services Case Study Analysis customers. For instance, teachers can suggest their trainees to acquire Freedom Technology Services items.
Risks.
• Economic instability in nations, which are the possible markets for Freedom Technology Services, can develop several concerns for Freedom Technology Services.
• Shifting of items from typical to much healthier, results in extra expenses and can cause decrease company's revenue margins.
• As Freedom Technology Services has a complicated supply chain, therefore failure of any of the level of supply chain can lead the company to face particular issues.
Division Analysis
Market Segmentation
The demographic segmentation of Freedom Technology Services Case Study Help is based upon four aspects; age, earnings, profession and gender. Freedom Technology Services produces a number of products related to infants i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Freedom Technology Services products are quite cost effective by nearly all levels, however its significant targeted customers, in regards to income level are upper and middle middle level consumers.
Geographical Division
Geographical segmentation of Freedom Technology Services Case Study Help is made up of its existence in almost 86 nations. Its geographical segmentation is based upon two main elements i.e. average income level of the customer along with the environment of the area. For example, Singapore Freedom Technology Services Business's division is done on the basis of the weather condition of the area i.e. hot, cold or warm.
Psychographic Segmentation
Psychographic division of Freedom Technology Services is based upon the character and life style of the customer. Freedom Technology Services 3 in 1 Coffee target those customers whose life style is rather hectic and don't have much time.
Behavioral Segmentation
Freedom Technology Services Case Analysis behavioral division is based upon the mindset understanding and awareness of the customer. For example its highly nutritious products target those consumers who have a health conscious mindset towards their consumptions.
VRIO Analysis
The VRIO analysis of Freedom Technology Services Business is a broad variety analysis supplying the organization with a chance to get a practical competitive advantage against its rivals in the food and drink industry, summed up in Display I.
Valuable
The resources utilized by the Freedom Technology Services company are important for the company or not. Such as the resources like finance, human resources, management of operations and specialists in marketing. This are some of the essential important aspects of for the identification of competitive benefit.
Rare
The important resources made use of by Freedom Technology Services are even unusual or costly. , if these resources are commonly discovered that it would be easier for the competitors and the brand-new rivals in the industry to easily move in competitors.
Imitation
The replica procedure is costly for the rivals of Freedom Technology Services Case Help Business. It can be done only in two different methods i.e. item duplication which is produced and made by Freedom Technology Services Company and launching of the replacement of the items with changing cost. This increases the risk of disruption to the recent structure of the market.
Company
This element of VRIO analysis handle the compatibility of the company to position in the market making efficient usage of its important resources which are challenging to mimic. Regularly, the advancement of management is completely based on the firm's execution strategy and group. Hence, this polishes the skills of the company by time based on the choices made by company for the progression of its strategic capitals.
Quantitative Analysis
R&D Costs as a percentage of sales are declining with increasing real quantity of costs reveals that the sales are increasing at a greater rate than its R&D spending, and enable the company to more spend on R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This indication likewise shows a thumbs-up to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the company is increasing due to its spending on mergers, acquisitions and R&D development instead of payment of debts. This increasing debt ratio posture a threat of default of Freedom Technology Services to its investors and could lead a declining share prices. Therefore, in regards to increasing debt ratio, the company needs to not spend much on R&D and must pay its present financial obligations to decrease the danger for investors.
The increasing danger of financiers with increasing financial obligation ratio and decreasing share costs can be observed by big decline of EPS of Freedom Technology Services Case Help stocks.
The sales growth of business is also low as compare to its mergers and acquisitions due to slow perception structure of consumers. This slow growth likewise hinder company to further invest in its mergers and acquisitions.( Freedom Technology Services, Freedom Technology Services Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of graphs and calculations given in the Exhibitions D and E.
TWOS Analysis.
TWOS analysis can be utilized to derive numerous strategies based upon the SWOT Analysis given above. A short summary of TWOS Analysis is given up Exhibition H.
Methods to make use of Opportunities using Strengths.
Freedom Technology Services Case Analysis ought to introduce more innovative items by big quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Freedom Technology Services and increase the profit margins for the company. It could also offer Freedom Technology Services a long term competitive advantage over its rivals.
The worldwide expansion of Freedom Technology Services must be focused on market recording of developing countries by growth, bring in more consumers through consumer's commitment. As establishing nations are more populated than industrialized countries, it might increase the client circle of Freedom Technology Services.
Methods to Conquer Weak Points to Make Use Of Opportunities.
Freedom Technology Services Case Solution needs to do careful acquisition and merger of organizations, as it might impact the consumer's and society's perceptions about Freedom Technology Services. It must merge and get with those companies which have a market credibility of healthy and healthy companies. It would enhance the perceptions of customers about Freedom Technology Services.
Freedom Technology Services ought to not only spend its R&D on development, instead of it must likewise focus on the R&D costs over assessment of expense of numerous nutritious products. This would increase expense effectiveness of its items, which will result in increasing its sales, due to decreasing costs, and margins.
Strategies to use strengths to get rid of threats.
Freedom Technology Services Case Analysis must transfer to not just establishing however also to industrialized nations. It should expands its geographical expansion. This large geographical expansion towards developing and developed nations would decrease the risk of possible losses in times of instability in different countries. It must expand its circle to numerous countries like Unilever which runs in about 170 plus countries.
Techniques to overcome weaknesses to prevent risks.
Freedom Technology Services Case Solution should wisely control its acquisitions to prevent the threat of misconception from the customers about Freedom Technology Services. This would not only improve the understanding of customers about Freedom Technology Services however would also increase the sales, profit margins and market share of Freedom Technology Services.
Alternatives.
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 must spend more on acquisitions than on the R&D.
Pros:.
1. Acquisitions would increase overall assets of the company, increasing the wealth of the business. However, costs on R&D would be sunk cost.
2. The business can resell the gotten systems in the market, if it fails to implement its strategy. However, quantity spend on the R&D might not be restored, and it will be considered entirely sunk cost, if it do not give possible results.
3. Spending on R&D supply sluggish growth in sales, as it takes very long time to present an item. Nevertheless, acquisitions supply quick results, as it provide the business already developed item, which can be marketed right after the acquisition.
Cons:.
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the business to deal with misunderstanding of consumers about Freedom Technology Services core worths of nutritious and healthy items.
2. Big spending on acquisitions than R&D would send a signal of company's inadequacy of developing innovative items, and would results in customer's dissatisfaction also.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are already present in the market, making business unable to introduce new ingenious products.
Option: 2
The Company needs to invest more on its R&D rather than acquisitions.
Pros:
1. It would make it possible for the company to produce more innovative items.
2. It would supply the company a strong competitive position in the market.
3. It would enable the business to increase its targeted customers by introducing those items which can be provided to an entirely brand-new market section.
4. Innovative items will provide long term advantages and high market share in long run.
Cons:
1. It would reduce the revenue 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 business at large. The danger is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might supply an unfavorable signal to the investors, and might result I declining stock costs.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Pros:
1. It would enable the business to introduce new ingenious items with less danger of transforming the costs on R&D into sunk expense.
2. It would offer a positive signal to the investors, as the general properties of the company would increase with its considerable R&D spending.
3. It would not affect the profit margins of the company at a large rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the business's general wealth along with in regards to innovative products.
Cons:
1. Risk of conversion of R&D spending into sunk cost, greater than alternative 1 lesser than alternative 2.
2. Threat of mistaken belief about the acquisitions, greater than alternative 2 and lower than option 1.
3. Intro of less number of innovative items than alternative 2 and high variety of innovative products than alternative 1.
Recommendation
With the deep analysis of the above alternatives, 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 business to not just introduce brand-new and innovative products in the market it would also lower the high expenditures on R&D under alternative 2 and increase the revenue margins. It would allow the company to increase its share rates also, as investors want to invest more in business with considerable R&D costs and boost in the total worth of the business.
Action and application Strategy
Strategy can be implemented effectively by developing certain short term along with long term plans. These strategies might be as follows;
Short Term Strategy (0-1 year).
• Under the short term strategy Freedom Technology Services Case Help ought to carry out various activities to execute its NHW method efficiently. These activities are as follows;.
• Get the audit of its brand name portfolio done, to analyze the core selling brands, which generate most of its profits.
• Examine the present target market as well as the market sector which is not include in the company's circle.
• Examine the current monetary information to measure the quantity that ought to be spent on the R&D and acquisitions.
• Analyze the possible investors and their nature, i.e. do they want long term benefits (capital gain), or the desire early earnings (dividend). It would let the business 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 company has potential experience to deal with. Get most favorable companies with a strong dedication to health, to construct the customer's understandings in the right direction.
• Focus more on acquisitions than R&D to develop the base in the consumer's mind about Freedom Technology Services values and vision and to avoid possible risk of sunk expense.
Long Term Strategy (1-10 years).
• Get companies with health along with taste aspect, as the base for the Freedom Technology Services as a company producing healthy products has actually been constructed under midterm plan and now the company could move towards taste aspect also 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 items.
Conclusion.
Freedom Technology Services Case Help has established considerable market share and brand identity in the urban markets, it is advised that the company should focus on the rural areas in terms of establishing brand name equity, awareness, and commitment, such can be done by creating a specific brand allotment technique through trade marketing tactics, that draw clear distinction between Freedom Technology Services products and other rival products. This will allow the company to develop brand name equity for newly introduced and currently produced items on a higher platform, making the reliable usage of resources and brand name image in the market.
