Stolt Nielsen Transportation Group B Case Study Solution and Analysis
Stolt Nielsen Transportation Group B is currently one of the biggest food chains worldwide. It was founded by Henri Stolt Nielsen Transportation Group B in 1866, a German Pharmacist who first launched "Farine Lactee"; a mix of flour and milk to feed babies and decrease mortality rate.
Stolt Nielsen Transportation Group B is now a global business. Unlike other multinational business, it has senior executives from various countries and tries to make choices considering the whole world. Stolt Nielsen Transportation Group B Case Study Analysis presently has more than 500 factories around the world and a network spread throughout 86 countries.
The purpose of Stolt Nielsen Transportation Group B Corporation is to enhance the quality of life of individuals by playing its part and offering healthy food. It wants to help the world in forming a healthy and better future for it. It also wants to encourage people to live a healthy life. 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
Nestlé's vision is to provide its clients with food that is healthy, high in quality and safe to eat. Stolt Nielsen Transportation Group B visualizes to develop a trained labor force which would assist the company to grow.
Nestlé's objective is that as currently, it is the leading company in the food market, it thinks in 'Good Food, Great Life". Its mission is to offer its consumers with a variety of options that are healthy and best in taste also. It is focused on providing the very best food to its clients throughout the day and night.
Stolt Nielsen Transportation Group B has a wide variety of products that it offers to its customers. In 2011, Stolt Nielsen Transportation Group B was noted as the most rewarding company.
Goals and Goals.
• Keeping in mind the vision and mission of the corporation, the company has laid down its objectives and goals. These objectives and goals are noted below.
• One goal of the company is to reach no landfill status.
• Another objective of Stolt Nielsen Transportation Group B is to squander minimum food during production. Usually, the food produced is wasted even before it reaches the clients.
• Another thing that Stolt Nielsen Transportation Group B is working on is to improve its product packaging in such a way that it would assist it to decrease those complications and would likewise ensure the shipment of high quality of its items to its customers.
• Meet international requirements of the environment.
• Develop a relationship based on trust with its customers, business partners, employees, and government.
Recently, Stolt Nielsen Transportation Group B Case Study Help Company is focusing more towards the strategy of NHW and investing more of its revenues on the R&D technology. The nation is investing more on mergers and acquisitions to support its NHW technique. The target of the business is not accomplished as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, offered in Exhibition H.
Analysis of Existing Strategy, Vision and Goals.
The present Stolt Nielsen Transportation Group B technique is based on the principle of Nutritious, Health and Health (NHW). This method handles the idea to bringing change in the client preferences about food and making the food things much healthier worrying about the health problems.
The vision of this technique is based upon the key technique i.e. 60/40+ which merely implies that the items will have a score of 60% on the basis of taste and 40% is based upon its dietary value. The items will be manufactured with additional dietary worth in contrast to all other items in market getting it a plus on its dietary content.
This strategy was embraced to bring more delicious plus healthy foods and beverages in market than ever. In competition with other business, with an intent of maintaining its trust over clients as Stolt Nielsen Transportation Group B Business has acquired more relied on by costumers.
Microenvironment Analysis (PESTEL Analysis).
The analysis utilized to measure the position of company in the market is done by using PESTLE analysis, given in Display A. Stolt Nielsen Transportation Group B works under the guidelines and guidelines directed by government and food authority. The business is more focused on its products and services to make sure about the product quality and safety.
Stolt Nielsen Transportation Group B is considerably supported by Government to satisfy all the criteria of standards like acts of health and security. In efforts to make good food, Stolt Nielsen Transportation Group B Case Study Help is altering the requirements of food and beverage manufacturing.
Initiation of the business where the capital income of each individual matters for the increased net sale as this varies country-to-country. The economy of the Stolt Nielsen Transportation Group B Company in U.S. is growing year by year with variable products launch particularly focusing on the dietary food for babies.
The social environment keeps on changing with regard to time like the attitude of the customer in addition to their lifestyles. Any product and services of any business can not succeed till the business is not worried about the living system of the consumer. Stolt Nielsen Transportation Group B is taking measures to fulfill its goals as the world is in search of healthy and delicious food.
In the advancement of business, strategic steps are somewhat obligatory. Stolt Nielsen Transportation Group B is one of the top popular international company and by time it buys various departments to take its items to new level. Stolt Nielsen Transportation Group B is spending more on its R&D to make its items much healthier and healthy supplying customers with health advantages.
There is no such impact of legal elements of Stolt Nielsen Transportation Group B as it is more concerned over its laws and regulations.
Stolt Nielsen Transportation Group B, in regards to ecological impact is dedicated to work in environment-friendly environment with conservation of the natural deposits and energy. If the resources utilized are recyclable or not, as due to the production of larger number of products there might be a hazard.
Competitive Forces Analysis (Porter's Five Forces Design).
Stolt Nielsen Transportation Group B Case Study Help has acquired a variety of business that helped it in diversification and growth of its product's profile. This is the comprehensive explanation of the Porter's design of five forces of Stolt Nielsen Transportation Group B Company, given in Exhibition B.
Stolt Nielsen Transportation Group B is one of the leading business in this competitive industry with a number of strong competitors like Unilever, Kraft foods and Group DANONE. Stolt Nielsen Transportation Group B is running well in this race for last 150 years. The competition of other companies with Stolt Nielsen Transportation Group B is rather high.
Threat of New Entrants.
A number of barriers are there for the new entrants to happen in the consumer food industry. Just a couple of entrants prosper in this industry as there is a need to understand the consumer requirement which requires time while current rivals are well aware and has actually advanced with the customer loyalty over their items with time. There is low danger of new entrants to Stolt Nielsen Transportation Group B as it has quite large network of distribution internationally dominating with well-reputed image.
Bargaining Power of Providers.
In the food and beverage market, Stolt Nielsen Transportation Group B owes the biggest share of market requiring higher number of supply chains. This triggers it to be a picturesque buyer for the providers. Thus, any of the supplier has never revealed any grumble about rate and the bargaining power is also low. In response, Stolt Nielsen Transportation Group B has likewise been concerned for its suppliers as it believes in long-term relations.
Bargaining Power of Buyers.
There is high bargaining power of the buyers due to terrific competition. Switching expense is rather low for the customers as numerous companies sale a variety of similar items. This appears to be an excellent danger for any business. Hence, Stolt Nielsen Transportation Group B Case Study Help makes sure to keep its consumers satisfied. This has led Stolt Nielsen Transportation Group B to be among the faithful company in eyes of its purchasers.
Hazard of Alternatives.
There has been a fantastic threat of substitutes as there are alternatives of some of the Nestlé's items such as boiled water and pasteurized milk. There has actually also been a claim that some of its products are not safe to utilize resulting in the reduced sale. Thus, Stolt Nielsen Transportation Group B started highlighting the health advantages of its items to cope up with the replacements.
It has ended up being the second biggest food and drink market in the West Europe with a market share of about 8.6% with only a distinction of 0.3 points with Stolt Nielsen Transportation Group B. Stolt Nielsen Transportation Group B attracts local costumers by its low cost of the product with the local taste of the products keeping its very first location in the worldwide market. Stolt Nielsen Transportation Group B Case Study Solution company has about 280,000 employees and functions in more than 197 countries edging its competitors in lots of regions.
Keep in mind: A short comparison of Stolt Nielsen Transportation Group B with its close rivals is given up Exhibit C.
The internal analysis and external of the company likewise can be done through SWOT Analysis, summed up in the Display F.
• Stolt Nielsen Transportation Group B has an experience of about 140 years, allowing business to much better perform, in numerous circumstances.
• Nestlé's has presence in about 86 countries, making it an international leader in Food and Beverage Market.
• Stolt Nielsen Transportation Group B has more than 2000 brand names, which increase the circle of its target customers. These brands include child foods, animal food, confectionary items, beverages etc. Famous brand names of Stolt Nielsen Transportation Group B include; Maggi, Kit-Kat, Nescafe, etc.
• Stolt Nielsen Transportation Group B Case Study Solution has large amount of spending on R&D as compare to its rivals, making the business to launch more innovative and nutritious products. This development offers the company a high competitive position in long run.
• After embracing its NHW Technique, the company has done large amount of mergers and acquisitions which increase the sales growth and enhance market position of Stolt Nielsen Transportation Group B.
• Stolt Nielsen Transportation Group B is a popular brand with high consumer's loyalty and brand recall. This brand loyalty of customers increases the opportunities of simple market adoption of numerous new brand names of Stolt Nielsen Transportation Group B.
• Acquisitions of those business, like; Kraft frozen Pizza company can offer a negative signal to Stolt Nielsen Transportation Group B consumers about their compromise over their core proficiency of much healthier foods.
• The growth I sales as compare to the company's financial investment in NHW Technique are rather various. It will take long to change the perception of individuals ab out Stolt Nielsen Transportation Group B as a business selling nutritious and healthy products.
• Presenting more health associated items makes it possible for the business to capture the marketplace in which consumers are rather mindful about health.
• Developing nations like India and China has biggest markets in the world. Thus expanding the marketplace towards developing nations can boost the Stolt Nielsen Transportation Group B service by increasing sales volume.
• Continue acquisitions and joint endeavors increases the market share of the company.
• Increased relationships with schools, hotel chains, restaurants etc. can likewise increase the variety of Stolt Nielsen Transportation Group B Case Study Solution consumers. For instance, teachers can suggest their trainees to buy Stolt Nielsen Transportation Group B items.
• Economic instability in countries, which are the prospective markets for Stolt Nielsen Transportation Group B, can develop a number of problems for Stolt Nielsen Transportation Group B.
• Shifting of products from typical to healthier, leads to extra costs and can result in decline company's profit margins.
• As Stolt Nielsen Transportation Group B has a complicated supply chain, for that reason failure of any of the level of supply chain can lead the company to deal with particular problems.
The demographic segmentation of Stolt Nielsen Transportation Group B Case Study Help is based on 4 factors; age, income, profession and gender. Stolt Nielsen Transportation Group B produces a number of items related to babies i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Stolt Nielsen Transportation Group B items are rather budget-friendly by practically all levels, but its significant targeted consumers, in terms of earnings level are upper and middle middle level consumers.
Geographical segmentation of Stolt Nielsen Transportation Group B Case Study Analysis is composed of its presence in almost 86 countries. Its geographical segmentation is based upon two primary elements i.e. typical income level of the customer along with the climate of the region. For example, Singapore Stolt Nielsen Transportation Group B Business's segmentation is done on the basis of the weather of the region i.e. hot, cold or warm.
Psychographic division of Stolt Nielsen Transportation Group B is based upon the character and life style of the consumer. For instance, Stolt Nielsen Transportation Group B 3 in 1 Coffee target those customers whose life style is quite hectic and do not have much time.
Stolt Nielsen Transportation Group B Case Solution behavioral division is based upon the mindset understanding and awareness of the customer. Its extremely healthy items target those customers who have a health conscious mindset towards their consumptions.
The VRIO analysis of Stolt Nielsen Transportation Group B Company is a broad range analysis offering the company with a possibility to get a practical competitive benefit versus its competitors in the food and drink market, summarized in Exhibition I.
The resources used by the Stolt Nielsen Transportation Group B business are valuable for the company or not. Such as the resources like financing, personnels, management of operations and professionals in marketing. This are some of the essential important factors of for the recognition of competitive advantage.
The important resources utilized by Stolt Nielsen Transportation Group B are expensive or even rare. If these resources are frequently found that it would be easier for the competitors and the brand-new rivals in the market to effortlessly move in competitors.
The imitation process is costly for the rivals of Stolt Nielsen Transportation Group B Case Analysis Business. However, it can be done just in 2 various strategies i.e. product duplication which is produced and manufactured by Stolt Nielsen Transportation Group B Company and launching of the alternative of the items with switching expense. This increases the hazard of disruption to the recent structure of the industry.
This element of VRIO analysis deals with the compatibility of the company to place in the market making efficient use of its valuable resources which are challenging to imitate. Often, the development of management is completely based on the firm's execution method and team. Hence, this polishes the abilities of the firm by time based on the decisions made by company for the progression of its tactical capitals.
R&D Spending as a percentage of sales are decreasing with increasing actual quantity of spending shows that the sales are increasing at a higher rate than its R&D spending, and permit the business 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 business is increasing due to its costs on mergers, acquisitions and R&D advancement instead of payment of debts. This increasing financial obligation ratio pose a threat of default of Stolt Nielsen Transportation Group B to its financiers and could lead a declining share prices. In terms of increasing debt ratio, the company ought to not spend much on R&D and needs to pay its present financial obligations to decrease the threat for financiers.
The increasing risk of investors with increasing debt ratio and declining share prices can be observed by huge decrease of EPS of Stolt Nielsen Transportation Group B Case Help stocks.
The sales development of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of consumers. This sluggish development also prevent company to additional spend on its acquisitions and mergers.( Stolt Nielsen Transportation Group B, Stolt Nielsen Transportation Group B Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of charts and computations given in the Exhibits D and E.
TWOS analysis can be used to derive numerous techniques based upon the SWOT Analysis given above. A short summary of TWOS Analysis is given up Display H.
Strategies to make use of Opportunities utilizing Strengths.
Stolt Nielsen Transportation Group B Case Analysis should present more innovative products by large quantity of R&D Costs and acquisitions and mergers. It might increase the marketplace share of Stolt Nielsen Transportation Group B and increase the earnings margins for the company. It could likewise provide Stolt Nielsen Transportation Group B a long term competitive benefit over its rivals.
The international growth of Stolt Nielsen Transportation Group B must be focused on market recording of establishing nations by growth, attracting more customers through customer's commitment. As developing countries are more populated than industrialized nations, it could increase the consumer circle of Stolt Nielsen Transportation Group B.
Strategies to Overcome Weak Points to Exploit Opportunities.
Stolt Nielsen Transportation Group B Case Analysis needs to do careful acquisition and merger of organizations, as it could impact the client's and society's understandings about Stolt Nielsen Transportation Group B. It must obtain and merge with those companies which have a market reputation of healthy and healthy companies. It would improve the understandings of customers about Stolt Nielsen Transportation Group B.
Stolt Nielsen Transportation Group B must not only spend its R&D on innovation, rather than it should also concentrate on the R&D spending over assessment of cost of various healthy products. This would increase cost performance of its products, which will lead to increasing its sales, due to decreasing prices, and margins.
Methods to use strengths to get rid of hazards.
Stolt Nielsen Transportation Group B Case Help should transfer to not just developing but likewise to developed countries. It needs to broadens its geographical expansion. This wide geographical growth towards establishing and established nations would minimize the danger of possible losses in times of instability in various countries. It should widen its circle to different nations like Unilever which operates in about 170 plus countries.
Techniques to overcome weaknesses to prevent hazards.
Stolt Nielsen Transportation Group B Case Analysis should carefully manage its acquisitions to prevent the danger of mistaken belief from the customers about Stolt Nielsen Transportation Group B. This would not just improve the perception of consumers about Stolt Nielsen Transportation Group B but would likewise increase the sales, profit margins and market share of Stolt Nielsen Transportation Group B.
In order to sustain the brand in the market and keep the client intact with the brand name, there are 2 choices:.
The Company must spend more on acquisitions than on the R&D.
1. Acquisitions would increase total assets of the company, increasing the wealth of the company. Nevertheless, spending on R&D would be sunk expense.
2. The business can resell the obtained units in the market, if it stops working to execute its strategy. However, quantity spend on the R&D could not be revived, and it will be thought about entirely sunk cost, if it do not give possible results.
3. Investing in R&D offer sluggish development in sales, as it takes very long time to introduce an item. However, acquisitions supply quick results, as it offer the company already established product, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the business's values like Kraftz foods can lead the business to face misunderstanding of customers about Stolt Nielsen Transportation Group B core worths of healthy and nutritious products.
2. Big spending on acquisitions than R&D would send out a signal of business's ineffectiveness of developing ingenious items, and would outcomes in customer's dissatisfaction.
3. Large acquisitions than R&D would extend the product line of the company by the items which are already present in the market, making company not able to introduce brand-new innovative products.
The Company should invest more on its R&D instead of acquisitions.
1. It would enable the business to produce more innovative products.
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 customers by introducing those items which can be used to an entirely brand-new market segment.
4. Innovative products will supply long term advantages and high market share in long run.
1. It would decrease the profit margins of the company.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would affect the company at large. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which might provide an unfavorable signal to the financiers, and could result I declining stock prices.
Continue its acquisitions and mergers with substantial spending on in R&D Program.
1. It would enable the business to introduce new innovative items with less threat of converting the costs on R&D into sunk cost.
2. It would provide a favorable signal to the financiers, as the overall properties of the company would increase with its substantial R&D costs.
3. It would not affect the profit margins of the company at a big rate as compare to alternative 2.
4. It would provide the company a strong long term market position in regards to the business's overall wealth in addition to in terms of innovative items.
1. Risk of conversion of R&D spending into sunk cost, higher than option 1 lower than alternative 2.
2. Threat of misconception 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 number of ingenious items than alternative 1.
With the deep analysis of the above alternatives, it is suggested that the company should pick the alternative 3 in order to keep a competitive position in the long run. As the alternative 3 would allow the business to not only present innovative and brand-new items in the market it would likewise reduce the high expenditures on R&D under alternative 2 and increase the profit margins. It would make it possible for the company to increase its share costs too, as investors want to invest more in companies with substantial R&D costs and boost in the total worth of the company.
Action and application Strategy
Technique can be implemented efficiently by establishing specific short-term as well as long term strategies. These strategies might be as follows;
Short-term Plan (0-1 year).
• Under the short-term plan Stolt Nielsen Transportation Group B Case Solution need to perform different activities to execute its NHW strategy effectively. These activities are as follows;.
• Get the audit of its brand name portfolio done, to analyze the core selling brands, which produce most of its earnings.
• Examine the current target audience along with the marketplace sector which is not include in the business's circle.
• Analyze the present financial information to measure the quantity that ought to be invested in the R&D and acquisitions.
• Examine the prospective financiers and their nature, i.e. do they desire long term advantages (capital gain), or the want early earnings (dividend). It would let the business to understand that just how much quantity needs 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 organizations with a strong dedication to health, to develop the customer's perceptions in the right instructions.
• Focus more on acquisitions than R&D to develop the base in the customer's mind about Stolt Nielsen Transportation Group B values and vision and to avoid possible danger of sunk expense.
Long Term Strategy (1-10 years).
• Get organizations with health in addition to taste factor, as the base for the Stolt Nielsen Transportation Group B as a company producing healthy items has actually been developed under midterm plan and now the business might move towards taste element as well to comprehend the customers, which focus more on taste instead of health.
• Be more aggressive towards R&D than the acquisitions, as it is the considerable time to develop new products.
Stolt Nielsen Transportation Group B has remained the leading market player for more than a decade. It has actually institutionalized its techniques and culture to align itself with the marketplace modifications and consumer habits, which has actually eventually enabled it to sustain its market share. Stolt Nielsen Transportation Group B has established substantial market share and brand identity in the city markets, it is suggested that the business must focus on the rural locations in terms of developing brand name equity, loyalty, and awareness, such can be done by producing a specific brand allowance strategy through trade marketing methods, that draw clear distinction between Stolt Nielsen Transportation Group B products and other rival products. Stolt Nielsen Transportation Group B must leverage its brand name image of healthy and safe food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will enable the company to develop brand equity for recently introduced and currently produced products on a greater platform, making the efficient use of resources and brand image in the market.