The London 2012 Olympic Games Case Study Solution & Analysis
Introduction
The London 2012 Olympic Games is currently one of the most significant food chains worldwide. It was established by Henri The London 2012 Olympic Games in 1866, a German Pharmacist who initially introduced "Farine Lactee"; a combination of flour and milk to decrease and feed infants mortality rate.
The London 2012 Olympic Games is now a multinational business. Unlike other multinational companies, it has senior executives from various countries and attempts to make choices considering the whole world. The London 2012 Olympic Games Case Study Solution presently has more than 500 factories worldwide and a network spread across 86 nations.
Purpose
The function of The London 2012 Olympic Games Corporation is to enhance the quality of life of people by playing its part and supplying healthy food. It wants to help the world in shaping a healthy and better future for it. It likewise wishes to motivate individuals to live a healthy life. While ensuring that the business is prospering 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 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 needs and requirements of its customers. Its vision is to grow quick and provide products that would satisfy the requirements of each age group. The London 2012 Olympic Games imagines to develop a well-trained workforce which would help the business to grow.
Objective.
Nestlé's objective is that as currently, it is the leading business in the food market, it believes in 'Excellent Food, Great Life". Its objective is to offer its consumers with a variety of options that are healthy and finest in taste also. It is concentrated on providing the very best food to its consumers throughout the day and night.
Products.
The London 2012 Olympic Games Case Study Solution has a wide range of items that it offers to its consumers. Its items consist of food for babies, cereals, dairy products, treats, chocolates, food for family pet and bottled water. It has around 4 hundred and fifty (450) factories around the world and around 328,000 employees. In 2011, The London 2012 Olympic Games was listed as the most gainful company.
Goals and Objectives.
• Bearing in mind the vision and objective of the corporation, the business has put down its goals and goals. These goals and goals are noted below.
• One objective of the company is to reach no land fill status.
• Another goal of The London 2012 Olympic Games is to squander minimum food during production. Frequently, the food produced is lost even prior to it reaches the consumers.
• Another thing that The London 2012 Olympic Games is dealing with is to enhance its product packaging in such a way that it would help it to minimize those complications and would likewise guarantee the shipment of high quality of its products to its customers.
• Meet international standards of the environment.
• Develop a relationship based on trust with its customers, business partners, employees, and government.
Critical Problems.
Just Recently, The London 2012 Olympic Games Company is focusing more towards the technique of NHW and investing more of its revenues on the R&D technology. The country is investing more on mergers and acquisitions to support its NHW technique. The target of the company is not achieved 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 Display H. There is a requirement to focus more on the sales then the innovation technology. Otherwise, it might result in the declined earnings rate. (Henderson, 2012).
Situational Analysis.
Analysis of Present Technique, Vision and Goals.
The existing The London 2012 Olympic Games method is based on the idea of Nutritious, Health and Wellness (NHW). This strategy handles the concept to bringing modification in the consumer choices about food and making the food stuff much healthier worrying about the health issues.
The vision of this method is based upon the secret method i.e. 60/40+ which merely indicates that the items will have a score of 60% on the basis of taste and 40% is based upon its nutritional worth. The products will be made with extra dietary value in contrast to all other products in market acquiring it a plus on its dietary material.
This method was adopted to bring more yummy plus healthy foods and drinks in market than ever. In competition with other business, with an intention of keeping its trust over clients as The London 2012 Olympic Games Business has actually acquired more trusted by costumers.
Microenvironment Analysis (PESTEL Analysis).
The analysis utilized to determine the position of company in the market is done by using PESTLE analysis, given in Exhibition A. The London 2012 Olympic Games works under the policies and guidelines directed by federal government and food authority. The company is more focused on its services and products to make certain about the product quality and security. This analysis will assist in understanding environment of external market in the international food and beverage industries. (Parera, 2017).
Political.
The political impact on the company is greatly influenced by the government laws and regulations. The business needs to meet its requirements offered by federal government otherwise it needs to pay fine. The London 2012 Olympic Games is considerably supported by Federal government to meet all the criteria of requirements like acts of health and wellness. In efforts to produce great food, The London 2012 Olympic Games is changing the requirements of food and beverage production. This might cause the offense of governmental guidelines and guidelines.
Economic.
Initiation of the business where the capital income of each private matters for the increased net sale as this differs country-to-country. The economy of the The London 2012 Olympic Games Company in U.S. is growing year by year with variable items launch especially concentrating on the nutritional food for babies.
Social.
The social environment continues altering with regard to time like the attitude of the consumer as well as their way of lives. Any services or product of any business can not be successful up until the business is not worried about the living system of the customer. The London 2012 Olympic Games is taking procedures to satisfy its objectives as the world is in search of healthy and delicious food.
Technological.
In the development of business, tactical measures are rather mandatory. The London 2012 Olympic Games is among the top popular international firm and by time it purchases various departments to take its items to new level. The London 2012 Olympic Games is spending more on its R&D to make its items much healthier and nutritious supplying consumers with health benefits.
Legal.
There is no such impact of legal elements of The London 2012 Olympic Games as it is more worried over its regulations and laws.
Environmental
The London 2012 Olympic Games, in regards to environmental effect is dedicated to work in environment-friendly environment with preservation of the natural deposits and energy. As due to the production of bigger number of items there may be a hazard if the resources used are recyclable or not.
Competitive Forces Analysis (Porter's Five Forces Design).
The London 2012 Olympic Games Case Study Solution has actually acquired a number of business that assisted it in diversity and growth of its item's profile. This is the thorough explanation of the Porter's design of 5 forces of The London 2012 Olympic Games Business, given up Exhibition B.
Competitiveness.
There is extreme competition in the market of food and beverages. The London 2012 Olympic Games is one of the leading company in this competitive market with a number of strong rivals like Unilever, Kraft foods and Group DANONE. The London 2012 Olympic Games is running well in this race for last 150 years. Each business has a guaranteed share of market. This competition is not just restricted to the rate of the product but likewise for development, quality and variation. Every industry is aiming hard for the maintenance of their market share. The competition of other companies with The London 2012 Olympic Games is rather high.
Threat of New Entrants.
A number of barriers are there for the brand-new entrants to take place in the customer food industry. Just a few entrants prosper in this industry as there is a need to understand the consumer requirement which requires time while recent rivals are aware and has progressed with the customer loyalty over their products with time. There is low threat of new entrants to The London 2012 Olympic Games as it has quite large network of circulation globally controling with well-reputed image.
Bargaining Power of Suppliers.
In the food and drink market, The London 2012 Olympic Games Case Study Analysis owes the largest share of market needing greater number of supply chains. In reaction, The London 2012 Olympic Games has actually likewise been concerned for its suppliers as it believes in long-term relations.
Bargaining Power of Buyers.
Thus, The London 2012 Olympic Games makes sure to keep its consumers satisfied. This has actually led The London 2012 Olympic Games to be one of the loyal company in eyes of its buyers.
Threat of Replacements.
There has actually been an excellent danger of substitutes as there are replacements of a few of the Nestlé's items such as boiled water and pasteurized milk. There has also been a claim that some of its products are not safe to use leading to the decreased sale. Hence, The London 2012 Olympic Games began highlighting the health advantages of its items to cope up with the replacements.
Competitor Analysis.
It has become the second largest food and beverage market in the West Europe with a market share of about 8.6% with just a difference of 0.3 points with The London 2012 Olympic Games. The London 2012 Olympic Games draws in local clients by its low expense of the item with the local taste of the items keeping its first location in the global market. The London 2012 Olympic Games Case Study Solution business has about 280,000 staff members and functions in more than 197 nations edging its rivals in many regions.
Keep in mind: A short contrast of The London 2012 Olympic Games with its close rivals is given in Display C.
SWOT Analysis.
The internal analysis and external of the business likewise can be done through SWOT Analysis, summed up in the Exhibition F.
Strengths.
• The London 2012 Olympic Games has an experience of about 140 years, allowing company to better carry out, in different situations.
• Nestlé's has existence in about 86 nations, making it an international leader in Food and Beverage Market.
• The London 2012 Olympic Games has more than 2000 brand names, which increase the circle of its target customers. These brand names include baby foods, family pet food, confectionary products, beverages etc. Famous brands of The London 2012 Olympic Games include; Maggi, Kit-Kat, Nescafe, etc.
• The London 2012 Olympic Games Case Study Solution has big amount of spending on R&D as compare to its rivals, making the company to release more nutritious and ingenious products. This development offers the business a high competitive position in long run.
• After embracing its NHW Method, the business has done large amount of mergers and acquisitions which increase the sales growth and improve market position of The London 2012 Olympic Games.
• The London 2012 Olympic Games is a widely known brand with high consumer's commitment and brand recall. This brand loyalty of consumers increases the possibilities of easy market adoption of various brand-new brand names of The London 2012 Olympic Games.
Weak points.
• Acquisitions of those company, like; Kraft frozen Pizza business can give an unfavorable signal to The London 2012 Olympic Games clients about their compromise over their core proficiency of healthier foods.
• The development I sales as compare to the company's investment in NHW Method are quite various. It will take long to change the understanding of individuals ab out The London 2012 Olympic Games as a business selling healthy and nutritious products.
Opportunities.
• Introducing more health associated products makes it possible for the business to capture the market in which consumers are quite conscious about health.
• Developing countries like India and China has biggest markets on the planet. Hence broadening the marketplace towards establishing countries can enhance the The London 2012 Olympic Games business by increasing sales volume.
• Continue acquisitions and joint ventures increases the marketplace share of the company.
• Increased relationships with schools, hotel chains, dining establishments etc. can also increase the number of The London 2012 Olympic Games Case Study Analysis customers. Teachers can advise their students to buy The London 2012 Olympic Games products.
Hazards.
• Financial instability in nations, which are the possible markets for The London 2012 Olympic Games, can produce several issues for The London 2012 Olympic Games.
• Shifting of products from typical to healthier, causes additional costs and can result in decline business's profit margins.
• As The London 2012 Olympic Games has a complex supply chain, therefore failure of any of the level of supply chain can lead the business to face specific issues.
Segmentation Analysis
Group Segmentation
The group segmentation of The London 2012 Olympic Games Case Study Help is based on 4 factors; age, gender, profession and earnings. The London 2012 Olympic Games produces numerous items related to babies i.e. Cerelac, Nido, etc. and associated to adults i.e. confectionary items. The London 2012 Olympic Games products are quite budget friendly by almost all levels, but its significant targeted consumers, in terms of earnings level are middle and upper middle level consumers.
Geographical Division
Geographical segmentation of The London 2012 Olympic Games Case Study Help is composed of its presence in almost 86 nations. Its geographical division is based upon 2 primary elements i.e. typical earnings level of the consumer in addition to the climate of the area. For instance, Singapore The London 2012 Olympic Games Company's segmentation is done on the basis of the weather of the area i.e. hot, warm or cold.
Psychographic Division
Psychographic segmentation of The London 2012 Olympic Games is based upon the personality and life style of the client. The London 2012 Olympic Games 3 in 1 Coffee target those consumers whose life design is quite hectic and do not have much time.
Behavioral Division
The London 2012 Olympic Games Case Solution behavioral division is based upon the attitude knowledge and awareness of the client. Its highly healthy items target those consumers who have a health conscious attitude towards their usages.
VRIO Analysis
The VRIO analysis of The London 2012 Olympic Games Company is a broad range analysis supplying the organization with an opportunity to obtain a feasible competitive benefit versus its competitors in the food and drink industry, summed up in Exhibit I.
Valuable
The resources utilized by the The London 2012 Olympic Games business are valuable for the company or not. Such as the resources like financing, human resources, management of operations and experts in marketing. This are a few of the crucial important elements of for the recognition of competitive advantage.
Uncommon
The important resources used by The London 2012 Olympic Games are costly or even uncommon. , if these resources are frequently found that it would be easier for the rivals and the new rivals in the industry to effortlessly move in competitors.
Imitation
The replica process is pricey for the competitors of The London 2012 Olympic Games Case Solution Company. However, it can be done just in two various techniques i.e. item duplication which is produced and produced by The London 2012 Olympic Games Company and launching of the replacement of the items with changing cost. This increases the threat of disruption to the current structure of the market.
Company
This element of VRIO analysis deals with the compatibility of the company to position in the market making productive use of its valuable resources which are hard to imitate. Frequently, the development of management is absolutely based on the firm's execution technique and group. Therefore, this polishes the skills of the firm by time based upon the choices made by firm for the progression of its tactical capitals.
Quantitative Analysis
R&D Spending as a portion of sales are decreasing with increasing real quantity of spending shows that the sales are increasing at a higher rate than its R&D costs, and allow the business to more invest in R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This indicator also shows a green light to the R&D spending, acquisitions and mergers.
Debt ratio of the company is increasing due to its costs on mergers, acquisitions and R&D advancement rather than payment of financial obligations. This increasing debt ratio posture a threat of default of The London 2012 Olympic Games to its investors and might lead a declining share rates. Therefore, in terms of increasing debt ratio, the company ought to not invest much on R&D and must pay its current financial obligations to reduce the threat for financiers.
The increasing threat of financiers with increasing financial obligation ratio and declining share rates can be observed by huge decline of EPS of The London 2012 Olympic Games Case Solution stocks.
The sales growth of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish growth also hinder business to more invest in its acquisitions and mergers.( The London 2012 Olympic Games, The London 2012 Olympic Games Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Graphs given up the Displays D and E.
TWOS Analysis.
2 analysis can be used to derive numerous methods based upon the SWOT Analysis given above. A short summary of TWOS Analysis is given in Exhibition H.
Techniques to exploit Opportunities using Strengths.
The London 2012 Olympic Games Case Analysis should introduce more ingenious items by large amount of R&D Costs and mergers and acquisitions. It could increase the market share of The London 2012 Olympic Games and increase the revenue margins for the company. It could also offer The London 2012 Olympic Games a long term competitive advantage over its rivals.
The worldwide growth of The London 2012 Olympic Games ought to be concentrated on market capturing of developing nations by growth, attracting more customers through consumer's loyalty. As establishing nations are more populated than developed nations, it might increase the client circle of The London 2012 Olympic Games.
Techniques to Conquer Weaknesses to Exploit Opportunities.
The London 2012 Olympic Games Case Analysis needs to do careful acquisition and merger of companies, as it might impact the customer's and society's understandings about The London 2012 Olympic Games. It should merge and get with those business which have a market reputation of healthy and healthy business. It would enhance the perceptions of customers about The London 2012 Olympic Games.
The London 2012 Olympic Games should not only spend its R&D on development, rather than it ought to likewise concentrate on the R&D spending over examination of expense of different nutritious products. This would increase cost effectiveness of its items, which will result in increasing its sales, due to declining prices, and margins.
Methods to utilize strengths to get rid of risks.
The London 2012 Olympic Games must move to not only establishing however likewise to industrialized nations. It ought to expand its circle to various countries like Unilever which operates in about 170 plus nations.
Strategies to conquer weaknesses to avoid dangers.
The London 2012 Olympic Games Case Help should sensibly manage its acquisitions to avoid the risk of misconception from the consumers about The London 2012 Olympic Games. This would not only enhance the perception of consumers about The London 2012 Olympic Games however would also increase the sales, revenue margins and market share of The London 2012 Olympic Games.
Alternatives.
In order to sustain the brand name in the market and keep the client undamaged with the brand name, there are two options:.
Alternative: 1.
The Company needs to spend more on acquisitions than on the R&D.
Pros:.
1. Acquisitions would increase overall properties of the company, increasing the wealth of the company. Spending on R&D would be sunk cost.
2. The company can resell the gotten systems in the market, if it fails to execute its technique. However, amount spend on the R&D might not be revived, and it will be considered completely sunk expense, if it do not give prospective outcomes.
3. Investing in R&D provide slow growth in sales, as it takes long period of time to present a product. Nevertheless, acquisitions offer fast results, as it offer the company currently established item, which can be marketed soon after the acquisition.
Cons:.
1. Acquisition of business's which do not fit with the company's values like Kraftz foods can lead the company to deal with mistaken belief of consumers about The London 2012 Olympic Games core values of nutritious and healthy items.
2. Big costs on acquisitions than R&D would send a signal of business's ineffectiveness of developing innovative products, and would outcomes in consumer's discontentment.
3. Big acquisitions than R&D would extend the product line of the business by the items which are currently present in the market, making business not able to present new innovative items.
Alternative: 2
The Company needs to spend more on its R&D rather than acquisitions.
Pros:
1. It would allow the business to produce more ingenious products.
2. It would offer the business a strong competitive position in the market.
3. It would allow the company to increase its targeted consumers by presenting those products which can be used to a completely brand-new market sector.
4. Ingenious items will offer long term advantages and high market share in long run.
Cons:
1. It would decrease the revenue margins of the company.
2. In case of failure, the whole spending on R&D would be considered as sunk expense, and would impact the business at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer a negative signal to the investors, and could result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with significant spending on in R&D Program.
Pros:
1. It would allow the business to present new ingenious products with less danger of converting the costs on R&D into sunk cost.
2. It would provide a positive signal to the investors, as the overall properties of the business would increase with its considerable R&D spending.
3. It would not impact the profit margins of the company at a big rate as compare to alternative 2.
4. It would supply the company a strong long term market position in regards to the business's total wealth as well as in regards to innovative items.
Cons:
1. Threat of conversion of R&D spending into sunk cost, higher than option 1 lower than alternative 2.
2. Risk of mistaken belief about the acquisitions, greater than alternative 2 and lesser than option 1.
3. Intro of less variety of innovative items than alternative 2 and high variety of ingenious products than alternative 1.
Suggestion
With the deep analysis of the above options, it is recommended that the company must select the alternative 3 in order to maintain a competitive position in the long run. As the alternative 3 would make it possible for the company to not only present innovative and new items in the market it would also reduce the high expenditures on R&D under alternative 2 and increase the profit margins. It would allow the business to increase its share prices also, as financiers are willing to invest more in business with considerable R&D spending and increase in the total worth of the company.
Action and execution Method
Method can be executed efficiently by developing specific short term as well as long term strategies. These strategies might be as follows;
Short Term Strategy (0-1 year).
• Under the short-term plan The London 2012 Olympic Games Case Help ought to carry out various 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 brand names, which generate the majority of its earnings.
• Analyze the existing target market in addition to the market segment which is not consist of in the business's circle.
• Evaluate 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 benefits (capital gain), or the want early profits (dividend). It would let the company to know that just how much amount ought to be invested in R&D.
Mid Term Plan (1-5 years).
• Get those organizations in which the business has potential experience to deal with. Obtain most beneficial companies with a strong commitment to health, to develop 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 The London 2012 Olympic Games worths and vision and to prevent potential risk of sunk cost.
Long Term Strategy (1-10 years).
• Obtain companies with health in addition to taste aspect, as the base for the The London 2012 Olympic Games as a business producing healthy products has been constructed under midterm plan and now the business might move towards taste aspect too to understand the consumers, which focus more on taste rather than health.
• Be more aggressive towards R&D than the acquisitions, as it is the substantial time to construct new items.
Conclusion.
The London 2012 Olympic Games has actually remained the leading market player for more than a years. It has institutionalized its techniques and culture to align itself with the marketplace changes and consumer behavior, which has actually eventually allowed it to sustain its market share. The London 2012 Olympic Games has actually established significant market share and brand name identity in the city markets, it is recommended that the company should focus on the rural locations in terms of establishing brand awareness, commitment, and equity, such can be done by developing a specific brand allocation technique through trade marketing techniques, that draw clear distinction between The London 2012 Olympic Games products and other rival items. The London 2012 Olympic Games should take advantage of its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will permit the company to establish brand equity for recently presented and currently produced items on a higher platform, making the reliable usage of resources and brand name image in the market.
