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Suntech Power Case Study Solution & Analysis


Intro

Suntech Power Case Study Help is presently among the greatest food cycle worldwide. It was established by Henri Suntech Power in 1866, a German Pharmacist who first released "Farine Lactee"; a combination of flour and milk to feed babies and reduce death rate. At the exact same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Business. The 2 ended up being competitors in the beginning however later merged in 1905, resulting in the birth of Suntech Power.

Suntech Power is now a transnational business. Unlike other international companies, it has senior executives from various countries and attempts to make choices thinking about the entire world. Suntech Power Case Study Help presently has more than 500 factories worldwide and a network spread across 86 countries.

Purpose

The purpose of Suntech Power Corporation is to improve the quality of life of individuals by playing its part and providing healthy food. While making sure that the company 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 provide its consumers with food that is healthy, high in quality and safe to consume. It wants to be ingenious and at the same time understand the requirements and requirements of its consumers. Its vision is to grow quickly and provide products that would satisfy the needs of each age. Suntech Power pictures to develop a well-trained labor force which would help the company to grow.

Mission.

Nestlé's mission is that as currently, it is the leading business in the food industry, it believes in 'Great Food, Good Life". Its mission is to offer its consumers with a range of options that are healthy and finest in taste as well. It is focused on offering the very best food to its clients throughout the day and night.

Products.
Executive Summary
Suntech Power Case Study Analysis has a large range of products that it offers to its customers. Its products include food for babies, cereals, dairy products, treats, chocolates, food for animal and bottled water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 staff members. In 2011, Suntech Power was listed as the most rewarding company.

Objectives and objectives.

• Remembering the vision and objective of the corporation, the company has set its objectives and goals. These objectives and objectives are noted below.
• One goal of the company is to reach no garbage dump status.
• Another goal of Suntech Power is to squander minimum food during production. Frequently, the food produced is wasted even before it reaches the consumers.
• Another thing that Suntech Power is working on is to enhance its product packaging in such a method that it would assist it to minimize the above-mentioned problems and would likewise guarantee the delivery of high quality of its products to its consumers.
• Meet global standards of the environment.
• Build a relationship based on trust with its consumers, company partners, workers, and federal government.

Important Concerns.

Just Recently, Suntech Power Company is focusing more towards the method of NHW and investing more of its profits on the R&D technology. The nation is investing more on mergers and acquisitions to support its NHW strategy. The target of the company is not attained as the sales were expected to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibition H. There is a requirement to focus more on the sales then the development technology. Otherwise, it might result in the decreased earnings rate. (Henderson, 2012).

Situational Analysis.
Porter's 5 Forces Analysis
Analysis of Existing Technique, Vision and Goals.

The present Suntech Power technique is based on the principle of Nutritious, Health and Health (NHW). This strategy deals with the concept to bringing change in the client preferences about food and making the food stuff healthier worrying about the health issues.

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

This method was embraced to bring more healthy plus delicious foods and beverages in market than ever. In competition with other business, with an intent of maintaining its trust over customers as Suntech Power Business has acquired more trusted by clients.

Microenvironment Analysis (PESTEL Analysis).

The analysis utilized to determine the position of company in the market is done by using PESTLE analysis, given in Exhibit A. Suntech Power works under the guidelines and guidelines directed by federal government and food authority. The business is more focused on its services and products to ensure about the product quality and security. This analysis will help in comprehending environment of external market in the worldwide food and beverage markets. (Parera, 2017).

Political.
Swot Analysis
The political influence on the business is greatly affected by the government laws and policies. The company needs to fulfill its requirements supplied by federal government otherwise it needs to pay fine. Suntech Power is considerably supported by Federal government to satisfy all the requirements of requirements like acts of health and wellness. In efforts to produce great food, Suntech Power is changing the standards of food and drink production. This may trigger the infraction of governmental rules and policies.

Economic.

Initiation of business where the capital income of each individual matters for the increased net sale as this varies country-to-country. The economy of the Suntech Power Business in U.S. is growing year by year with variable items launch particularly focusing on the nutritional food for babies.

Social.

The social environment keeps on changing with respect to time like the attitude of the customer along with their lifestyles. Any service or product of any business can not be successful up until the company is not concerned about the living system of the customer. Suntech Power is taking measures to satisfy its goals as the world remains in search of healthy and delicious food.

Technological.

In the advancement of service, tactical procedures are somewhat obligatory. Suntech Power is among the top popular multinational firm and by time it invests in various departments to take its products to new level. Suntech Power is investing more on its R&D to make its items much healthier and healthy supplying customers with health advantages.

Legal.

There is no such impact of legal factors of Suntech Power as it is more worried over its policies and laws.

Environmental

Suntech Power, in regards to ecological impact is devoted to work in environmentally friendly environment with preservation of the natural deposits and energy. As due to the manufacturing of bigger number of items there may be a threat if the resources used are recyclable or not.

Competitive Forces Analysis (Porter's 5 Forces Model).

Suntech Power Case Study Analysis has actually acquired a variety of business that assisted it in diversity and growth of its item's profile. This is the thorough explanation of the Porter's model of 5 forces of Suntech Power Business, given up Display B.

Competitiveness.

Suntech Power is one of the leading business in this competitive industry with a number of strong rivals like Unilever, Kraft foods and Group DANONE. Suntech Power is running well in this race for last 150 years. The competition of other business with Suntech Power is rather high.
Vrio Analysis
Threat of New Entrants.

A number of barriers are there for the brand-new entrants to occur in the customer food market. Just a few entrants be successful in this industry as there is a requirement to understand the customer need which needs time while recent competitors are well aware and has actually advanced with the customer loyalty over their products with time. There is low danger of brand-new entrants to Suntech Power as it has rather big network of circulation globally dominating with well-reputed image.

Bargaining Power of Providers.

In the food and drink market, Suntech Power Case Study Solution owes the largest share of market needing greater number of supply chains. In reaction, Suntech Power has likewise been worried for its suppliers as it thinks in long-term relations.

Bargaining Power of Buyers.

Hence, Suntech Power makes sure to keep its clients pleased. This has actually led Suntech Power to be one of the loyal company in eyes of its purchasers.

Threat of Alternatives.

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

Rival Analysis.

It has become the second largest food and drink market in the West Europe with a market share of about 8.6% with only a difference of 0.3 points with Suntech Power. Suntech Power brings in regional clients by its low expense of the product with the regional taste of the items keeping its first location in the international market. Suntech Power Case Study Help business has about 280,000 workers and functions in more than 197 countries edging its rivals in numerous areas.

Keep in mind: A quick contrast of Suntech Power with its close competitors is given up Exhibit C.

SWOT Analysis.

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

Strengths.

• Suntech Power has an experience of about 140 years, making it possible for company to much better perform, in numerous scenarios.
• Nestlé's has presence in about 86 nations, making it an international leader in Food and Beverage Industry.
• Suntech Power has more than 2000 brands, which increase the circle of its target customers. Famous brands of Suntech Power consist of; Maggi, Kit-Kat, Nescafe, and so on
• Suntech Power Case Study Analysis has large big of spending costs R&D as compare to its competitors, making the company business launch introduce nutritious and innovative healthyItems
• After embracing its NHW Strategy, the business has actually done big quantity of mergers and acquisitions which increase the sales growth and improve market position of Suntech Power.
• Suntech Power is a popular brand name with high customer's commitment and brand recall. This brand commitment of consumers increases the possibilities of simple market adoption of numerous new brand names of Suntech Power.
Weak points.
• Acquisitions of those service, like; Kraft frozen Pizza company can provide an unfavorable signal to Suntech Power clients 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 rather different. It will take long to alter the understanding of individuals ab out Suntech Power as a business selling healthy and healthy items.

Opportunities.

• Presenting more health associated products makes it possible for the company to catch the marketplace in which customers are quite mindful about health.
• Developing nations like India and China has largest markets worldwide. Broadening the market towards developing countries can enhance the Suntech Power organisation by increasing sales volume.
• Continue acquisitions and joint endeavors increases the marketplace share of the company.
• Increased relationships with schools, hotel chains, dining establishments etc. can also increase the variety of Suntech Power Case Study Analysis customers. For instance, instructors can advise their trainees to buy Suntech Power items.

Threats.

• Economic instability in countries, which are the prospective markets for Suntech Power, can develop numerous problems for Suntech Power.
• Shifting of products from typical to healthier, results in additional expenses and can result in decrease company's revenue margins.
• As Suntech Power has a complex supply chain, for that reason failure of any of the level of supply chain can lead the business to face specific issues.

Division Analysis

Market Segmentation

The group division of Suntech Power Case Study Analysis is based upon four aspects; age, gender, occupation and income. For example, Suntech Power produces several items related to children i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary products. Suntech Power products are rather budget-friendly by nearly all levels, however its major targeted clients, in regards to earnings level are upper and middle middle level customers.

Geographical Division

Geographical division of Suntech Power Case Study Solution is made up of its existence in practically 86 nations. Its geographical segmentation is based upon 2 main factors i.e. typical income level of the consumer as well as the climate of the area. For instance, Singapore Suntech Power Business's segmentation is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Division

Psychographic division of Suntech Power is based upon the character and life style of the customer. Suntech Power 3 in 1 Coffee target those consumers whose life design is quite hectic and don't have much time.

Behavioral Segmentation

Suntech Power Case Help behavioral division is based upon the mindset knowledge and awareness of the consumer. For example its extremely healthy items target those customers who have a health conscious attitude towards their intakes.

VRIO Analysis

The VRIO analysis of Suntech Power Business is a broad variety analysis offering the organization with a chance to obtain a practical competitive benefit against its competitors in the food and drink industry, summarized in Exhibition I.

Belongings

The resources utilized by the Suntech Power company are valuable for the company or not. Such as the resources like financing, personnels, management of operations and specialists in marketing. This are some of the crucial valuable factors of for the recognition of competitive advantage.

Rare

The valuable resources made use of by Suntech Power are even uncommon or expensive. If these resources are frequently found that it would be simpler for the competitors and the brand-new competitors in the industry to effortlessly move in competition.

Imitation

The replica procedure is pricey for the competitors of Suntech Power Case Help Company. It can be done just in 2 various strategies i.e. item duplication which is produced and manufactured by Suntech Power Company and launching of the alternative of the items with changing expense. This increases the danger of disturbance to the current structure of the market.

Organization

This component of VRIO analysis handle the compatibility of the company to position in the market making productive use of its valuable resources which are tough to imitate. Frequently, the development of management is completely depending on the firm's execution technique and team. Thus, this polishes the abilities of the company by time based on the choices made by firm for the development of its tactical capitals.

Quantitative Analysis

R&D Spending as a portion of sales are declining with increasing actual amount of spending shows that the sales are increasing at a greater rate than its R&D costs, and permit the business to more invest in R&D.

Net Earnings Margin is increasing while R&D as a percentage of sales is declining. This indication also reveals a thumbs-up to the R&D costs, acquisitions and mergers.

Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of debts. This increasing debt ratio present a threat of default of Suntech Power to its financiers and might lead a decreasing share costs. In terms of increasing debt ratio, the firm ought to not spend much on R&D and ought to pay its present financial obligations to reduce the risk for financiers.

The increasing threat of financiers with increasing financial obligation ratio and decreasing share prices can be observed by huge decline of EPS of Suntech Power Case Help stocks.

The sales development of business is likewise low as compare to its mergers and acquisitions due to slow perception building of customers. This sluggish development likewise impede business to more invest in its mergers and acquisitions.( Suntech Power, Suntech Power Financial Reports, 2006-2010).

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

TWOS Analysis.

TWOS analysis can be used to obtain various techniques based upon the SWOT Analysis given above. A brief summary of TWOS Analysis is given in Display H.

Techniques to exploit Opportunities using Strengths.

Suntech Power Case Analysis should introduce more innovative products by large amount of R&D Costs and mergers and acquisitions. It might increase the market share of Suntech Power and increase the profit margins for the business. It could likewise offer Suntech Power a long term competitive benefit over its competitors.

The global expansion of Suntech Power should be concentrated on market recording of developing countries by growth, bring in more consumers through customer's commitment. As establishing countries are more populous than developed nations, it might increase the client circle of Suntech Power.

Methods to Overcome Weak Points to Exploit Opportunities.

Suntech Power Case Solution ought to do careful acquisition and merger of companies, as it might affect the client's and society's perceptions about Suntech Power. It should combine and get with those companies which have a market reputation of healthy and healthy companies. It would improve the perceptions of consumers about Suntech Power.

Suntech Power must not just spend its R&D on innovation, instead of it ought to also focus on the R&D costs over assessment of cost of different healthy items. This would increase expense performance of its items, which will lead to increasing its sales, due to decreasing rates, and margins.

Techniques to utilize strengths to conquer dangers.

Suntech Power Case Help needs to transfer to not just establishing but also to industrialized countries. It needs to widens its geographical growth. This wide geographical expansion towards establishing and established countries would decrease the risk of prospective losses in times of instability in numerous nations. It must broaden its circle to numerous nations like Unilever which operates in about 170 plus nations.

Techniques to get rid of weaknesses to avoid threats.

Suntech Power needs to carefully control its acquisitions to avoid the danger of mistaken belief from the consumers about Suntech Power. It should obtain and combine with those nations having a goodwill of being a healthy company in the market. This would not just improve the perception of consumers about Suntech Power but would also increase the sales, profit margins and market share of Suntech Power. It would also allow the business to use its prospective resources effectively on its other operations instead of acquisitions of those companies slowing the NHW method development.

Alternatives.

In order to sustain the brand name in the market and keep the consumer intact with the brand, there are two options:.

Alternative: 1.

The Business needs to spend more on acquisitions than on the R&D.

Pros:.

1. Acquisitions would increase total properties of the company, increasing the wealth of the company. Spending on R&D would be sunk cost.
2. The business can resell the acquired systems in the market, if it fails to implement its technique. Nevertheless, quantity invest in the R&D might not be restored, and it will be considered totally sunk expense, if it do not offer prospective results.
3. Spending on R&D provide sluggish development in sales, as it takes very long time to present an item. However, acquisitions offer quick results, as it supply the business already established product, 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 mistaken belief of consumers about Suntech Power core worths of healthy and healthy products.
2. Big costs on acquisitions than R&D would send a signal of business's inefficiency of developing ingenious products, and would results in consumer's frustration too.
3. Big acquisitions than R&D would extend the line of product of the business by the products which are currently present in the market, making business not able to present new innovative products.

Alternative: 2

The Business should spend more on its R&D rather than acquisitions.

Pros:

1. It would make it possible for the business to produce more innovative items.
2. It would offer the business a strong competitive position in the market.
3. It would make it possible for the company to increase its targeted clients by introducing those products which can be provided to a completely new market segment.
4. Innovative items will offer long term advantages and high market share in long run.

Cons:

1. It would decrease the revenue 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 business at big. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of company, which could supply a negative signal to the financiers, and could result I decreasing stock rates.

Alternative 3:

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

Pros:

1. It would permit the company to introduce new innovative items with less danger of converting the costs on R&D into sunk cost.
2. It would offer a positive signal to the investors, as the total assets of the company would increase with its significant R&D costs.
3. It would not impact the earnings margins of the business at a large rate as compare to alternative 2.
4. It would provide the business a strong long term market position in regards to the business's total wealth along with in regards to innovative products.

Cons:

1. Threat of conversion of R&D spending into sunk cost, greater than option 1 lesser than alternative 2.
2. Danger of misunderstanding about the acquisitions, higher than alternative 2 and lower than option 1.
3. Introduction of less number of ingenious items than alternative 2 and high number of ingenious items than alternative 1.

Suggestion

With the deep analysis of the above alternatives, it is suggested that the company needs to choose the alternative 3 in order to preserve a competitive position in the long run. As the alternative 3 would allow the business to not just introduce new and ingenious items in the market it would likewise minimize the high expenses on R&D under alternative 2 and increase the profit margins. It would make it possible for the company to increase its share prices too, as investors want to invest more in companies with significant R&D costs and increase in the overall worth of the company.

Action and implementation Method

Strategy can be carried out successfully by establishing specific short term along with long term strategies. These strategies could be as follows;

Short-term Strategy (0-1 year).

• Under the short term plan Suntech Power Case Analysis need to carry out numerous activities to execute its NHW technique efficiently. These activities are as follows;.
• Get the audit of its brand portfolio done, to examine the core selling brand names, which produce most of its profits.
• Analyze the present target audience in addition to the marketplace sector which is not include in the company's circle.
• Evaluate the present monetary information to determine the amount that needs to be invested in the R&D and acquisitions.
• Examine the prospective financiers and their nature, i.e. do they want long term benefits (capital gain), or the desire early revenues (dividend). It would let the company to understand that just how much amount needs to be spent on R&D.

Mid Term Strategy (1-5 years).

• Acquire those companies in which the company has possible experience to deal with. Acquire most favorable organizations with a strong dedication to health, to build the consumer's perceptions in the best instructions.
• Focus more on acquisitions than R&D to develop the base in the consumer's mind about Suntech Power worths and vision and to avoid prospective threat of sunk cost.

Long Term Plan (1-10 years).

• Obtain organizations with health along with taste aspect, as the base for the Suntech Power as a business producing healthy items has actually been developed under midterm plan and now the company could move towards taste aspect as well to comprehend the customers, which focus more on taste rather than health.
• Be more aggressive towards R&D than the acquisitions, as it is the considerable time to construct new items.

Conclusion.
Recommendations
Suntech Power has stayed the leading market gamer for more than a years. It has actually institutionalized its techniques and culture to align itself with the marketplace changes and customer habits, which has eventually allowed it to sustain its market share. Though, Suntech Power has developed considerable market share and brand identity in the urban markets, it is suggested that the company should focus on the backwoods in terms of establishing brand name equity, commitment, and awareness, such can be done by creating a specific brand allowance strategy through trade marketing techniques, that draw clear distinction between Suntech Power Case Analysis products and other competitor products. Suntech Power should take advantage of its brand image of healthy and safe food in catering the rural markets and likewise to upscale the offerings in other categories such as nutrition. This will permit the company to develop brand equity for freshly presented and currently produced products on a higher platform, making the effective usage of resources and brand name image in the market.