Menu

Stolt Nielsen Transportation Group B Online Case Solution

Home >> Accounting >> Stolt Nielsen Transportation Group B

Stolt Nielsen Transportation Group B Case Study Solution & Analysis


Introduction

Stolt Nielsen Transportation Group B Case Study Solution is presently 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 reduce and feed infants death rate. At the very same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Company. The 2 became rivals initially however later combined in 1905, leading to the birth of Stolt Nielsen Transportation Group B.

Stolt Nielsen Transportation Group B is now a transnational business. Unlike other international business, it has senior executives from different countries and attempts to make decisions considering the whole world. Stolt Nielsen Transportation Group B Case Study Solution presently has more than 500 factories worldwide and a network spread across 86 nations.

Function

The function of Stolt Nielsen Transportation Group B Corporation is to improve the quality of life of people by playing its part and supplying healthy food. While making sure that the business is being successful in the long run, that's how it plays its part for a much better and healthy future

Vision

Nestlé's vision is to supply its customers with food that is healthy, high in quality and safe to consume. Stolt Nielsen Transportation Group B imagines to establish a trained workforce which would help the company to grow.

Mission.

Nestlé's mission is that as presently, it is the leading business in the food market, it thinks in 'Good Food, Great Life". Its mission is to offer its consumers with a variety of choices that are healthy and best in taste as well. It is focused on offering the best food to its customers throughout the day and night.

Products.

Stolt Nielsen Transportation Group B has a broad range of products that it uses to its consumers. In 2011, Stolt Nielsen Transportation Group B was listed as the most gainful organization.

Objectives and Objectives.

• Remembering the vision and mission of the corporation, the business has set its objectives and goals. These objectives and goals are noted below.
• One goal of the company is to reach zero land fill status.
• Another objective of Stolt Nielsen Transportation Group B is to waste minimum food throughout production. Usually, the food produced is lost even before it reaches the customers.
• Another thing that Stolt Nielsen Transportation Group B is dealing with is to enhance its packaging in such a way that it would help it to decrease those issues and would likewise ensure the shipment of high quality of its products to its clients.
• Meet global requirements of the environment.
• Develop a relationship based on trust with its customers, service partners, employees, and government.

Critical Problems.

Recently, Stolt Nielsen Transportation Group B Case Study Analysis 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 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 Display H.

Situational Analysis.

Analysis of Existing Technique, Vision and Goals.

The present Stolt Nielsen Transportation Group B method is based on the principle of Nutritious, Health and Wellness (NHW). This method deals with the idea to bringing modification in the client preferences about food and making the food things much healthier worrying about the health concerns.

The vision of this strategy is based upon the secret method i.e. 60/40+ which simply suggests that the items will have a rating of 60% on the basis of taste and 40% is based on its dietary value. The items will be produced with additional nutritional worth in contrast to all other items in market gaining it a plus on its nutritional material.

This method was adopted to bring more healthy plus tasty foods and beverages in market than ever. In competitors with other companies, with an objective of maintaining its trust over clients as Stolt Nielsen Transportation Group B Company has actually acquired more relied on by clients.

Microenvironment Analysis (PESTEL Analysis).

The analysis utilized to measure the position of business in the market is done by utilizing PESTLE analysis, given up Display A. Stolt Nielsen Transportation Group B works under the rules and guidelines directed by government and food authority. The company is more concentrated on its services and products to make sure about the product quality and safety. This analysis will help in understanding environment of external market in the global food and beverage industries. (Parera, 2017).

Political.

The political impact on the business is significantly influenced by the public law and guidelines. The business needs to fulfill its requirements provided by federal government otherwise it needs to pay fine. Stolt Nielsen Transportation Group B is greatly supported by Federal government to satisfy all the criteria of requirements like acts of health and wellness. In efforts to make good food, Stolt Nielsen Transportation Group B is altering the standards of food and drink manufacturing. This may trigger the infraction of governmental rules and policies.

Economic.

Initiation of the business where the capital earnings of each specific 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 especially focusing on the dietary food for babies.

Social.

The social environment keeps on changing with regard to time like the attitude of the customer along with their way of lives. Any product or service of any company can not succeed till the business is not worried about the living system of the customer. Stolt Nielsen Transportation Group B is taking steps to fulfill its goals as the world is in search of healthy and yummy food.

Technological.

In the development of business, tactical measures are somewhat obligatory. Stolt Nielsen Transportation Group B is among the top well-known international company and by time it buys various departments to take its items to brand-new level. Stolt Nielsen Transportation Group B is investing more on its R&D to make its products healthier and healthy providing customers with health benefits.

Legal.

There is no such impact of legal elements of Stolt Nielsen Transportation Group B as it is more concerned over its regulations and laws.

Environmental

Stolt Nielsen Transportation Group B, in terms of environmental impact is committed to work in environmentally friendly environment with conservation of the natural resources and energy. As due to the production of larger variety of products there may be a risk if the resources used are recyclable or not.

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

Stolt Nielsen Transportation Group B Case Study Solution has actually acquired a variety of business that helped it in diversity and growth of its item's profile. This is the thorough description of the Porter's model of five forces of Stolt Nielsen Transportation Group B Company, given in Display B.

Competitiveness.

There is severe competition in the industry of food and drinks. Stolt Nielsen Transportation Group B is among the top business in this competitive industry with a variety of strong rivals like Unilever, Kraft foods and Group DANONE. Stolt Nielsen Transportation Group B is running well in this race for last 150 years. Each business has a certain share of market. This rivalry is not just limited to the rate of the product however also for innovation, variation and quality. Every market is striving hard for the upkeep of their market share. The competitors of other business with Stolt Nielsen Transportation Group B is rather high.

Threat of New Entrants.

A variety of barriers are there for the brand-new entrants to take place in the consumer food market. Just a few entrants succeed in this market as there is a need to comprehend the consumer requirement which needs time while current rivals are well aware and has actually progressed with the consumer commitment over their items with time. There is low danger of brand-new entrants to Stolt Nielsen Transportation Group B as it has quite big network of distribution worldwide controling with well-reputed image.

Bargaining Power of Providers.

In the food and drink 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 purchaser for the suppliers. Any of the provider has never ever expressed any grumble about price and the bargaining power is also low. In reaction, Stolt Nielsen Transportation Group B has also been concerned for its suppliers as it believes in long-term relations.

Bargaining Power of Purchasers.

There is high bargaining power of the purchasers due to excellent competition. Changing cost is quite low for the customers as many companies sale a number of comparable products. This seems to be an excellent threat for any company. Hence, Stolt Nielsen Transportation Group B Case Study Help ensures to keep its consumers pleased. This has led Stolt Nielsen Transportation Group B to be one of the loyal company in eyes of its purchasers.

Risk of Substitutes.

There has been an excellent threat of replacements as there are replacements of some 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 reduced sale. Hence, Stolt Nielsen Transportation Group B started highlighting the health benefits of its items to cope up with the replacements.

Rival Analysis.

Stolt Nielsen Transportation Group B Case Study Analysis covers a number of the popular consumer brands like Package Kat and Nescafe etc. About 29 brands among all of its brand names, each brand earned a profits of about $1billion in 2010. Its huge part of sale is in North America making up about 42% of its all sales. In Europe and U.S. the leading significant brand names sold by Stolt Nielsen Transportation Group B in these states have a terrific reliable share of market. Likewise Stolt Nielsen Transportation Group B, Unilever and DANONE are 2 large industries of food and beverages as well as its main competitors. In the year 2010, Stolt Nielsen Transportation Group B had actually earned its yearly earnings by 26% boost because of its increased food and beverages sale particularly in cooking stuff, ice-cream, drinks based on tea, and frozen food. On the other hand, DANONE, due to the increasing rates of shares resulting an increase of 38% in its profits. Stolt Nielsen Transportation Group B Case Study Solution reduced its sales expense by the adaptation 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. It has 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 Stolt Nielsen Transportation Group B. Unilever shares a market share of about 7.7 with Stolt Nielsen Transportation Group B becoming very first and ranking DANONE as third. Stolt Nielsen Transportation Group B brings in regional clients by its low cost of the product with the regional taste of the products keeping its first place in the global market. Stolt Nielsen Transportation Group B company has about 280,000 employees and functions in more than 197 nations edging its competitors in many areas. Stolt Nielsen Transportation Group B has likewise reduced its expense of supply by introducing E-marketing in contrast to its rivals.

Note: A brief contrast of Stolt Nielsen Transportation Group B with its close competitors is given in Exhibition C.

SWOT Analysis.

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

Strengths.

• Stolt Nielsen Transportation Group B has an experience of about 140 years, allowing company to much better carry out, in different circumstances.
• Nestlé's has presence in about 86 nations, making it a worldwide leader in Food and Beverage Market.
• Stolt Nielsen Transportation Group B has more than 2000 brands, which increase the circle of its target customers. These brands include infant foods, family pet food, confectionary items, beverages etc. Famous brands of Stolt Nielsen Transportation Group B include; Maggi, Kit-Kat, Nescafe, etc.
• Stolt Nielsen Transportation Group B Case Study Solution has large amount of costs on R&D as compare to its rivals, making the company to release more ingenious and nutritious items. This development supplies the business a high competitive position in long run.
• After embracing its NHW Technique, the business has actually done large quantity of mergers and acquisitions which increase the sales development and improve market position of Stolt Nielsen Transportation Group B.
• Stolt Nielsen Transportation Group B is a widely known brand name with high customer's loyalty and brand recall. This brand name loyalty of customers increases the opportunities of easy market adoption of numerous brand-new brands of Stolt Nielsen Transportation Group B.
Weak points.
• Acquisitions of those company, like; Kraft frozen Pizza company can offer an unfavorable signal to Stolt Nielsen Transportation Group B customers about their compromise over their core proficiency of much healthier foods.
• The development I sales as compare to the business's investment in NHW Method are quite different. It will take long to change the perception of individuals ab out Stolt Nielsen Transportation Group B as a business offering nutritious and healthy products.

Opportunities.

• Presenting more health associated items makes it possible for the company to catch the market in which customers are rather mindful about health.
• Developing countries like India and China has biggest markets in the world. Broadening the market towards developing countries can enhance the Stolt Nielsen Transportation Group B organisation by increasing sales volume.
• Continue acquisitions and joint ventures increases the marketplace share of the company.
• Increased relationships with schools, hotel chains, restaurants and so on can also increase the number of Stolt Nielsen Transportation Group B Case Study Solution customers. Instructors can suggest their students to purchase Stolt Nielsen Transportation Group B items.

Risks.

• Economic instability in countries, which are the possible markets for Stolt Nielsen Transportation Group B, can develop several concerns for Stolt Nielsen Transportation Group B.
• Shifting of products from typical to healthier, results in additional expenses and can cause decrease business's revenue margins.
• As Stolt Nielsen Transportation Group B has a complicated supply chain, therefore failure of any of the level of supply chain can lead the company to deal with particular problems.

Division Analysis

Demographic Division

The market segmentation of Stolt Nielsen Transportation Group B Case Study Solution is based on four aspects; age, earnings, occupation and gender. Stolt Nielsen Transportation Group B produces several products related to infants i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary items. Stolt Nielsen Transportation Group B items are quite budget friendly by almost all levels, however its significant targeted customers, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Stolt Nielsen Transportation Group B Case Study Solution is made up of its existence in almost 86 nations. Its geographical segmentation is based upon 2 primary factors i.e. average earnings level of the consumer in addition to the climate of the region. Singapore Stolt Nielsen Transportation Group B Company's division is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Division

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 consumers whose life style is rather hectic and don't have much time.

Behavioral Division

Stolt Nielsen Transportation Group B Case Solution behavioral segmentation is based upon the mindset understanding and awareness of the consumer. For instance its highly nutritious items target those consumers who have a health mindful attitude towards their usages.

VRIO Analysis

The VRIO analysis of Stolt Nielsen Transportation Group B Business is a broad range analysis providing the company with an opportunity to get a viable competitive advantage against its rivals in the food and drink industry, summarized in Display I.

Valuable

The resources utilized by the Stolt Nielsen Transportation Group B company are important for the company or not. Such as the resources like finance, personnels, management of operations and professionals in marketing. This are a few of the essential important factors of for the recognition of competitive benefit.

Rare

The important resources made use of by Stolt Nielsen Transportation Group B are even unusual or pricey. , if these resources are typically found that it would be easier for the rivals and the new rivals in the industry to easily move in competition.

Replica

The replica procedure is expensive for the rivals of Stolt Nielsen Transportation Group B Case Solution Company. Nevertheless, it can be done just in 2 various techniques i.e. product duplication which is produced and manufactured by Stolt Nielsen Transportation Group B Company and introducing of the replacement of the products with changing cost. This increases the risk of interruption to the recent structure of the industry.

Company

This component of VRIO analysis deals with the compatibility of the company to place in the market making efficient usage of its valuable resources which are difficult to imitate. Frequently, the advancement of management is absolutely depending on the company's execution technique and group. Therefore, this polishes the abilities of the company by time based upon the decisions made by firm for the progression of its strategic capitals.

Quantitative Analysis

R&D Spending as a portion of sales are declining with increasing actual quantity of spending shows that the sales are increasing at a higher rate than its R&D costs, and permit the company to more spend on R&D.

Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indication likewise shows a green light to the R&D spending, acquisitions and mergers.

Debt ratio of the business is increasing due to its costs on mergers, acquisitions and R&D development instead of payment of debts. This increasing financial obligation ratio present a danger of default of Stolt Nielsen Transportation Group B to its financiers and could lead a decreasing share costs. In terms of increasing financial obligation ratio, the firm needs to not invest much on R&D and ought to pay its present financial obligations to decrease the threat for investors.

The increasing danger of investors with increasing financial obligation ratio and declining share prices can be observed by substantial decrease of EPS of Stolt Nielsen Transportation Group B Case Help stocks.

The sales growth of company is likewise low as compare to its acquisitions and mergers due to slow perception structure of customers. This slow development likewise impede 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 estimations and Graphs given in the Exhibits D and E.

TWOS Analysis.

2 analysis can be utilized to obtain various techniques based on the SWOT Analysis provided above. A brief summary of TWOS Analysis is given in Exhibition H.

Strategies to make use of Opportunities utilizing Strengths.

Stolt Nielsen Transportation Group B Case Solution needs to present more ingenious items by big amount of R&D Costs and acquisitions and mergers. It might increase the marketplace share of Stolt Nielsen Transportation Group B and increase the profit margins for the business. It might also supply Stolt Nielsen Transportation Group B a long term competitive advantage over its rivals.

The global growth of Stolt Nielsen Transportation Group B need to be focused on market recording of developing nations by growth, drawing in more consumers through client's commitment. As developing countries are more populated than developed countries, it could increase the customer circle of Stolt Nielsen Transportation Group B.

Techniques to Overcome Weak Points to Exploit Opportunities.

Stolt Nielsen Transportation Group B Case Help needs to do cautious acquisition and merger of organizations, as it might impact the client's and society's understandings about Stolt Nielsen Transportation Group B. It ought to combine and obtain with those business which have a market reputation of healthy and nutritious business. It would improve the understandings of customers about Stolt Nielsen Transportation Group B.

Stolt Nielsen Transportation Group B should not only invest its R&D on innovation, rather than it must likewise focus on the R&D costs over examination of expense of different nutritious items. This would increase expense performance of its items, which will result in increasing its sales, due to decreasing costs, and margins.

Techniques to use strengths to conquer dangers.

Stolt Nielsen Transportation Group B should move to not just establishing however also to developed nations. It ought to widen its circle to numerous countries like Unilever which runs in about 170 plus countries.

Techniques to conquer weaknesses to avoid risks.

Stolt Nielsen Transportation Group B Case Help must wisely manage its acquisitions to prevent the risk of misunderstanding from the customers about Stolt Nielsen Transportation Group B. This would not only enhance the understanding of customers about Stolt Nielsen Transportation Group B however would likewise increase the sales, revenue margins and market share of Stolt Nielsen Transportation Group B.

Alternatives.

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

Alternative: 1.

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

Pros:.

1. Acquisitions would increase overall properties of the business, increasing the wealth of the company. Costs on R&D would be sunk expense.
2. The company can resell the obtained systems in the market, if it fails to execute its technique. However, quantity spend on the R&D might not be restored, and it will be considered entirely sunk expense, if it do not provide potential results.
3. Investing in R&D offer slow development in sales, as it takes very long time to present a product. Nevertheless, acquisitions provide quick outcomes, as it offer the business already established item, which can be marketed right after the acquisition.

Cons:.

1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to face misconception of customers about Stolt Nielsen Transportation Group B core worths of healthy and nutritious products.
2. Large spending on acquisitions than R&D would send a signal of business's inefficiency of developing ingenious items, and would results in customer's frustration too.
3. Large acquisitions than R&D would extend the product line of the company by the products which are currently present in the market, making business not able to introduce new ingenious items.

Alternative: 2

The Business ought to invest more on its R&D rather than acquisitions.

Pros:

1. It would allow the business to produce more ingenious items.
2. It would provide the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted clients by presenting those products which can be offered to a completely brand-new market sector.
4. Ingenious products will provide long term advantages and high market share in long term.

Cons:

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 impact the business at big. The threat is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer a negative signal to the financiers, and could result I decreasing stock costs.

Alternative 3:

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

Pros:

1. It would allow the company to introduce new innovative products with less risk of converting the spending on R&D into sunk expense.
2. It would supply a favorable signal to the financiers, as the general properties of the business would increase with its significant R&D spending.
3. It would not impact the earnings margins of the company at a large rate as compare to alternative 2.
4. It would offer the company a strong long term market position in regards to the business's total wealth along with in terms of innovative items.

Cons:

1. Threat of conversion of R&D costs into sunk cost, greater than option 1 lesser than alternative 2.
2. Risk of misconception about the acquisitions, higher than alternative 2 and lesser than alternative 1.
3. Intro of less variety of ingenious items than alternative 2 and high variety of innovative items than alternative 1.

Recommendation

With the deep analysis of the above alternatives, it is recommended that the business ought to pick the alternative 3 in order to preserve 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 minimize the high expenditures on R&D under alternative 2 and increase the revenue margins. It would make it possible for the company to increase its share costs as well, as financiers want to invest more in companies with substantial R&D costs and increase in the total worth of the company.

Action and execution Strategy

Method can be carried out successfully by developing particular short-term as well as long term plans. These strategies could be as follows;

Short-term Plan (0-1 year).

• Under the short-term strategy Stolt Nielsen Transportation Group B Case Analysis should perform different activities to implement its NHW strategy efficiently. These activities are as follows;.
• Get the audit of its brand name portfolio done, to analyze the core selling brands, which create the majority of its earnings.
• Evaluate the current target market along with the market segment which is not include in the company's circle.
• Examine the present financial information to determine the amount that should be invested in the R&D and acquisitions.
• Examine the potential financiers and their nature, i.e. do they want long term advantages (capital gain), or the desire early revenues (dividend). It would let the business to understand that just how much quantity should be invested in R&D.

Mid Term Strategy (1-5 years).

• Obtain those companies in which the company has possible experience to handle. Acquire most beneficial companies with a strong commitment to health, to develop the customer's understandings in the ideal instructions.
• Focus more on acquisitions than R&D to build the base in the customer's mind about Stolt Nielsen Transportation Group B worths and vision and to avoid potential threat of sunk cost.

Long Term Plan (1-10 years).

• Get companies with health in addition to taste factor, as the base for the Stolt Nielsen Transportation Group B as a business producing healthy items has actually been developed under midterm plan and now the business might move towards taste factor 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 substantial time to develop new products.

Conclusion.

Stolt Nielsen Transportation Group B Case Help has established significant market share and brand identity in the city markets, it is recommended that the company must focus on the rural locations in terms of developing brand equity, awareness, and commitment, such can be done by producing a particular brand allocation method through trade marketing techniques, that draw clear difference in between Stolt Nielsen Transportation Group B products and other rival items. This will allow the company to develop brand equity for freshly introduced and already produced products on a greater platform, making the effective use of resources and brand name image in the market.