Noble Group Case Study Solution and Analysis
Noble Group is currently one of the most significant food chains worldwide. It was founded by Henri Noble Group in 1866, a German Pharmacist who initially launched "Farine Lactee"; a mix of flour and milk to decrease and feed babies mortality rate.
Noble Group is now a multinational business. Unlike other multinational business, it has senior executives from different nations and tries to make decisions considering the whole world. Noble Group Case Study Analysis currently has more than 500 factories worldwide and a network spread across 86 nations.
The function of Noble Group 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 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 consumers with food that is healthy, high in quality and safe to eat. Noble Group imagines to establish a trained labor force which would assist the business to grow.
Nestlé's mission is that as presently, it is the leading company in the food market, it thinks in 'Excellent Food, Excellent Life". Its mission is to provide its customers with a variety of options that are healthy and finest in taste. It is concentrated on offering the very best food to its customers throughout the day and night.
Noble Group Case Study Analysis has a large range of products that it provides to its clients. Its products include food for babies, cereals, dairy products, treats, chocolates, food for animal and mineral water. It has around four hundred and fifty (450) factories worldwide and around 328,000 employees. In 2011, Noble Group was noted as the most rewarding organization.
Goals and Objectives.
• Remembering the vision and objective of the corporation, the business has actually laid down its goals and objectives. These goals and objectives are noted below.
• One goal of the business is to reach zero landfill status. It is working toward no waste, where no waste of the factory is landfilled. It motivates its workers to take the most out of the by-products. (Noble Group, aboutus, 2017).
• Another objective of Noble Group is to waste minimum food during production. Frequently, the food produced is wasted even before it reaches the clients.
• Another thing that Noble Group is working on is to improve its product packaging in such a way that it would help it to reduce the above-mentioned issues and would likewise guarantee the delivery of high quality of its items to its customers.
• Meet global requirements of the environment.
• Build a relationship based upon trust with its customers, organisation partners, staff members, and government.
Just Recently, Noble Group Case Study Solution Business is focusing more towards the method 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. The target of the business is not achieved as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, given in Display H.
Analysis of Present Method, Vision and Goals.
The current Noble Group strategy is based upon the concept of Nutritious, Health and Wellness (NHW). This method handles the concept to bringing modification in the client preferences about food and making the food stuff healthier concerning about the health problems.
The vision of this technique is based on the secret method i.e. 60/40+ which just means that the products will have a score of 60% on the basis of taste and 40% is based upon its nutritional value. The items will be made with extra nutritional value in contrast to all other items in market gaining it a plus on its dietary material.
This method was adopted to bring more delicious plus nutritious foods and drinks in market than ever. In competition with other business, with an intention of maintaining its trust over customers as Noble Group Company has gained 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, given in Display A. Noble Group works under the regulations and guidelines directed by government and food authority. The company is more concentrated on its services and products to make sure about the item quality and security. This analysis will assist in comprehending environment of external market in the global food and beverage markets. (Parera, 2017).
The political effect on the business is significantly affected by the government laws and regulations. The company needs to meet its requirements offered by federal government otherwise it has to pay fine. Noble Group is significantly supported by Federal government to meet all the requirements of requirements like acts of health and wellness. In efforts to produce good food, Noble Group is altering the standards of food and beverage manufacturing. This might trigger the violation of governmental guidelines and policies.
Initiation of business where the capital earnings of each individual matters for the increased net sale as this varies country-to-country. The economy of the Noble Group Business in U.S. is growing year by year with variable products launch especially concentrating on the dietary food for infants.
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 worried about the living system of the customer. Noble Group is taking procedures to fulfill its goals as the world remains in search of delicious and healthy food.
In the advancement of business, tactical procedures are somewhat necessary. Noble Group is one of the top famous international firm and by time it buys various departments to take its products to brand-new level. Noble Group is investing more on its R&D to make its items healthier and healthy supplying customers with health advantages.
There is no such effect of legal elements of Noble Group as it is more concerned over its policies and laws.
Noble Group, in terms of ecological effect is committed to operate in environment-friendly environment with conservation of the natural resources and energy. As due to the production of larger number of items there may be a danger if the resources utilized are recyclable or not.
Competitive Forces Analysis (Porter's 5 Forces Design).
Noble Group Case Study Analysis has actually obtained a number of business that helped it in diversification and development of its item's profile. This is the extensive description of the Porter's model of five forces of Noble Group Business, given up Display B.
There is severe competition in the market of food and drinks. Noble Group is among the top business in this competitive market with a number of strong rivals like Unilever, Kraft foods and Group DANONE. Noble Group is running well in this race for last 150 years. Each company has a definite share of market. This rivalry is not simply restricted to the rate of the item but likewise for quality, variation and innovation. Every market is striving hard for the maintenance of their market share. The competition of other companies with Noble Group is quite high.
Danger of New Entrants.
A number of barriers are there for the brand-new entrants to take place in the consumer food industry. Just a couple of entrants succeed in this market as there is a need to comprehend the customer need which needs time while current competitors are aware and has actually progressed with the customer loyalty over their items with time. There is low danger of new entrants to Noble Group as it has quite large network of distribution worldwide dominating with well-reputed image.
Bargaining Power of Providers.
In the food and drink industry, Noble Group Case Study Solution owes the biggest share of market requiring greater number of supply chains. In response, Noble Group has also been worried for its suppliers as it believes in long-lasting relations.
Bargaining Power of Buyers.
Therefore, Noble Group makes sure to keep its consumers satisfied. This has actually led Noble Group to be one of the devoted company in eyes of its purchasers.
Danger of Alternatives.
There has actually been a fantastic danger 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 products are not safe to utilize resulting in the decreased sale. Therefore, Noble Group started highlighting the health advantages of its items to cope up with the replacements.
It has actually become the second biggest food and beverage market in the West Europe with a market share of about 8.6% with only a distinction of 0.3 points with Noble Group. Noble Group attracts local clients by its low cost of the product with the local taste of the items maintaining its first place in the global market. Noble Group Case Study Analysis business has about 280,000 staff members and functions in more than 197 countries edging its rivals in lots of areas.
Keep in mind: A short comparison of Noble Group with its close rivals is given in Exhibition C.
The internal analysis and external of the company likewise can be done through SWOT Analysis, summarized in the Display F.
• Noble Group has an experience of about 140 years, making it possible for company to much better carry out, in numerous situations.
• Nestlé's has presence in about 86 nations, making it a worldwide leader in Food and Drink Market.
• Noble Group has more than 2000 brands, which increase the circle of its target customers. These brands consist of child foods, pet food, confectionary products, drinks etc. Famous brands of Noble Group consist of; Maggi, Kit-Kat, Nescafe, etc.
• Noble Group Case Study Solution has big amount of spending on R&D as compare to its rivals, making the business to introduce more ingenious and healthy products. This innovation provides the company a high competitive position in long run.
• After adopting its NHW Method, the company has done large quantity of mergers and acquisitions which increase the sales growth and enhance market position of Noble Group.
• Noble Group is a widely known brand with high customer's commitment and brand name recall. This brand name loyalty of consumers increases the opportunities of easy market adoption of various new brand names of Noble Group.
• Acquisitions of those company, like; Kraft frozen Pizza service can give an unfavorable signal to Noble Group consumers about their compromise over their core competency of healthier foods.
• The development I sales as compare to the company's investment in NHW Method are quite different. It will take long to change the perception of people ab out Noble Group as a company offering healthy and nutritious products.
• Presenting more health associated items enables the company to capture the market in which customers are quite mindful about health.
• Developing countries like India and China has biggest markets in the world. Hence expanding the market towards establishing nations can enhance the Noble Group business by increasing sales volume.
• Continue acquisitions and joint endeavors increases the marketplace share of the business.
• Increased relationships with schools, hotel chains, dining establishments and so on can likewise increase the variety of Noble Group Case Study Help customers. Instructors can recommend their students to purchase Noble Group items.
• Economic instability in countries, which are the prospective markets for Noble Group, can produce a number of issues for Noble Group.
• Shifting of products from regular to healthier, results in extra costs and can cause decrease company's profit margins.
• As Noble Group has an intricate supply chain, therefore failure of any of the level of supply chain can lead the business to face particular issues.
The market segmentation of Noble Group Case Study Help is based on 4 factors; age, profession, gender and earnings. Noble Group produces a number of products related to babies i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary items. Noble Group products are rather budget-friendly by practically all levels, but its significant targeted clients, in regards to earnings level are middle and upper middle level clients.
Geographical division of Noble Group Case Study Solution is composed of its presence in nearly 86 countries. Its geographical segmentation is based upon 2 main factors i.e. average income level of the customer in addition to the environment of the region. For example, Singapore Noble Group Company's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.
Psychographic division of Noble Group is based upon the personality and life style of the customer. Noble Group 3 in 1 Coffee target those consumers whose life style is quite busy and don't have much time.
Noble Group Case Solution behavioral division is based upon the mindset understanding and awareness of the consumer. For example its extremely nutritious items target those consumers who have a health conscious attitude towards their consumptions.
The VRIO analysis of Noble Group Business is a broad range analysis providing the organization with a possibility to obtain a practical competitive advantage versus its competitors in the food and drink industry, summarized in Exhibition I.
The resources used by the Noble Group company are valuable for the business or not. Such as the resources like financing, personnels, management of operations and professionals in marketing. This are some of the essential important elements of for the recognition of competitive advantage.
The valuable resources made use of by Noble Group are pricey or even uncommon. If these resources are typically found that it would be simpler for the competitors and the brand-new rivals in the market to easily relocate competition.
The imitation procedure is expensive for the competitors of Noble Group Case Analysis Business. Nevertheless, it can be done just in 2 different methods i.e. product duplication which is produced and made by Noble Group Company and introducing of the substitute of the products with changing cost. This increases the hazard of disturbance to the current structure of the market.
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 difficult to mimic. Often, the advancement of management is completely based on the firm's execution method and team. Therefore, this polishes the abilities of the company by time based upon the choices made by company for the progression of its strategic capitals.
R&D Spending as a portion of sales are declining with increasing actual quantity of spending shows that the sales are increasing at a greater rate than its R&D spending, and enable the business to more spend on R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is decreasing. This sign likewise reveals a green light to the R&D costs, acquisitions and mergers.
Financial obligation ratio of the company is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of financial obligations. This increasing debt ratio pose a danger of default of Noble Group to its financiers and could lead a declining share rates. In terms of increasing debt ratio, the firm needs to not invest much on R&D and should pay its existing financial obligations to decrease the threat for investors.
The increasing threat of financiers with increasing debt ratio and declining share costs can be observed by huge decrease of EPS of Noble Group Case Analysis stocks.
The sales growth of business is likewise low as compare to its acquisitions and mergers due to slow perception structure of consumers. This slow growth likewise hinder business to further spend on its mergers and acquisitions.( Noble Group, Noble Group Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Charts given in the Exhibitions D and E.
2 analysis can be utilized to obtain numerous strategies based upon the SWOT Analysis offered above. A brief summary of TWOS Analysis is given in Exhibition H.
Methods to exploit Opportunities using Strengths.
Noble Group Case Analysis must present more ingenious products by big quantity of R&D Costs and mergers and acquisitions. It might increase the market share of Noble Group and increase the profit margins for the business. It could also supply Noble Group a long term competitive benefit over its rivals.
The worldwide growth of Noble Group ought to be focused on market capturing of developing countries by growth, drawing in more consumers through customer's loyalty. As developing countries are more populous than industrialized countries, it might increase the customer circle of Noble Group.
Techniques to Overcome Weak Points to Make Use Of Opportunities.
Noble Group Case Help must do cautious acquisition and merger of organizations, as it could affect the client's and society's perceptions about Noble Group. It must combine and acquire with those companies which have a market reputation of nutritious and healthy business. It would enhance the perceptions of consumers about Noble Group.
Noble Group ought to not only invest its R&D on innovation, rather than it ought to likewise focus on the R&D costs over examination of expense of numerous healthy products. This would increase cost performance of its items, which will lead to increasing its sales, due to decreasing rates, and margins.
Strategies to utilize strengths to conquer hazards.
Noble Group needs to move to not just establishing however likewise to developed countries. It needs to broaden its circle to various countries like Unilever which runs in about 170 plus nations.
Methods to overcome weaknesses to prevent risks.
Noble Group must carefully control its acquisitions to avoid the risk of misconception from the customers about Noble Group. It ought to combine and acquire with those nations having a goodwill of being a healthy business in the market. This would not just improve the perception of customers about Noble Group but would likewise increase the sales, profit margins and market share of Noble Group. It would also enable the business to utilize its prospective resources efficiently on its other operations rather than acquisitions of those organizations slowing the NHW strategy growth.
In order to sustain the brand name in the market and keep the client undamaged with the brand name, there are two choices:.
The Business must invest more on acquisitions than on the R&D.
1. Acquisitions would increase overall possessions of the company, increasing the wealth of the business. Costs 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. However, amount spend on the R&D could not be restored, and it will be considered entirely sunk expense, if it do not give possible results.
3. Spending on R&D offer sluggish development in sales, as it takes long period of time to present a product. Acquisitions provide quick outcomes, as it offer the business currently established 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 company to deal with misconception of consumers about Noble Group core values of healthy and healthy items.
2. Big spending on acquisitions than R&D would send out a signal of company's ineffectiveness of developing innovative items, and would lead to consumer's frustration too.
3. Large acquisitions than R&D would extend the product line of the business by the items which are currently present in the market, making business unable to introduce new innovative items.
The Company must invest more on its R&D rather than acquisitions.
1. It would make it possible for the company to produce more innovative items.
2. It would provide the company a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted clients by introducing those items which can be used to a totally brand-new market segment.
4. Innovative items will offer long term benefits and high market share in long term.
1. It would decrease the earnings margins of the business.
2. In case of failure, the whole costs on R&D would be thought about as sunk expense, and would affect the company at big. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which might offer a negative signal to the financiers, and might result I decreasing stock costs.
Continue its acquisitions and mergers with substantial costs on in R&D Program.
1. It would allow the business to present new innovative products with less threat of converting the costs on R&D into sunk cost.
2. It would offer a favorable signal to the investors, as the total properties of the business would increase with its considerable R&D costs.
3. It would not impact the profit margins of the business at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the business's overall wealth in addition to in regards to innovative items.
1. Risk of conversion of R&D spending into sunk expense, greater than option 1 lower than alternative 2.
2. Danger of mistaken belief about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Introduction of less variety of innovative products than alternative 2 and high variety of ingenious items than alternative 1.
With the deep analysis of the above alternatives, it is suggested that the company must pick the alternative 3 in order to keep a competitive position in the long run. As the alternative 3 would enable the business to not only present brand-new and innovative products in the market it would likewise reduce the high expenditures on R&D under alternative 2 and increase the earnings margins. It would enable the company to increase its share prices too, as financiers want to invest more in companies with substantial R&D costs and increase in the total worth of the business.
Action and implementation Technique
Strategy can be carried out successfully by developing certain short-term along with long term strategies. These plans could be as follows;
Short Term Plan (0-1 year).
• Under the short-term strategy Noble Group Case Help ought to perform various activities to implement its NHW method efficiently. These activities are as follows;.
• Get the audit of its brand portfolio done, to examine the core selling brand names, which generate the majority of its income.
• Analyze the current target market in addition to the market section which is not consist of in the business's circle.
• Evaluate the current financial information to determine the quantity that needs to be spent on the R&D and acquisitions.
• Evaluate the potential investors and their nature, i.e. do they want long term benefits (capital gain), or the desire early revenues (dividend). It would let the business to understand that just how much quantity should be spent on R&D.
Mid Term Strategy (1-5 years).
• Obtain those companies in which the business has possible experience to deal with. Obtain most favorable organizations with a strong commitment to health, to build the consumer's understandings in the ideal direction.
• Focus more on acquisitions than R&D to develop the base in the customer's mind about Noble Group worths and vision and to prevent prospective risk of sunk cost.
Long Term Strategy (1-10 years).
• Obtain companies with health along with taste aspect, as the base for the Noble Group as a business producing healthy products has been constructed under midterm plan and now the business might move towards taste factor also to grasp the customers, which focus more on taste instead of health.
• Be more aggressive towards R&D than the acquisitions, as it is the substantial time to build brand-new items.
Noble Group has actually stayed the leading market player for more than a years. It has institutionalised its methods and culture to align itself with the market changes and consumer behavior, which has ultimately enabled it to sustain its market share. Though, Noble Group has actually developed considerable market share and brand identity in the city markets, it is recommended that the business needs to focus on the backwoods in terms of developing brand name equity, awareness, and commitment, such can be done by developing a particular brand name allowance method through trade marketing strategies, that draw clear difference between Noble Group Case Analysis products and other competitor products. Noble Group needs 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 business to establish brand name equity for freshly introduced and currently produced products on a greater platform, making the effective usage of resources and brand name image in the market.