The analysis of the financial statement involves the methods use in interpreting and assessing the outcome of the current and past financial position or performance since they associate to particular interest factors in investment decisions. The straightforward calculation related the common share current market price to the most recent available EPS on the yearly basis. The recommendation is mad in away, that not only offers the solution the problem, but also depicts the implementation process and the course of action that the organization needs to take in order to be successful. In addition, the imitable factor also outlines the factors that are inimitable by the other organization. Consumer Enquiries NZ: 0800 835 554. All in all, the advantage of using the VRIO analysis is to determine the sustained competitive edge in the market. Lastly, the overall rivalry or competition within the industry is analysed. Principles of marketing. Additionally, the macro environment includes legal and political factors, sociocultural forces, economic forces and technological factors. All in all, the recommendation include, what, why, how and whom factors. This is known as market development strategy. Also, there are many questions that can be bets answered by comparing the figures in Lion Nathan And The Chinese Beer Industry percentages. The 4 elements of the marketing mix are Product, Price, Place and Promotions. The Malt Shovel Brewery has released the first details of their pending summer limited edition beer. Also, the purpose of the problem statement is to describe the external environment and its effect on the overall organization in short and long-term. A bargaining power of a supplier in the market is strong if: The buyers having strong bargaining power can highly influence the profitability of the suppliers operating in the market by imposing condition that are not much favorable for the suppliers in terms of price, quality or service. The social factors includes safety and health consciousness, various demographics, population growth rates and cultural aspects. “Our input costs have continued to rise against this backdrop of declining volume, and a further drop in draught beer sales as … New customer registration. These are the factors that an organization lacks and does poorly in comparison to the organizations operating in the same market at the same level. Lion Nathan is a brewing-centered alcoholic drinks company operating in Australia and New Zealand. The users of the financial statement are listed below; Significantly, creating the financial ratio add meanings to the accounting and financial data of the business. When D+I was approached by Lion Nathan to elevate the design of the glassware used to serve their range of craft beers, we immediately headed to the pub to conduct an in-depth round of user testing. The product being offered by the suppliers are highly differentiated. "Growth rates had decreased dramatically from over 20 percent per year in the 1980 's, to 12.5 percent on average … Not only this, it also indicates that an organization has a lot unproductive assets for instance inventory, receivables, equipment and plant for its current sales’ level. In the first step, a growth path of the company can be formulated that lays down its vision, mission and strategic aims. The South Australian Brewing Company, Limited is a brewery located in Thebarton, an inner-west suburb of Adelaide, South Australia.It is a subsidiary of Lion, which in turn is owned by Kirin, a Japan-based beverage company.It manufactures West End Draught beer.. Since 2009 it is a wholly owned subsidiary of Kirin of Japan. the simple relationship between current stock market price and expected or current earnings per share is often quoted by both owners and management. The case study does not end at just providing recommendations to the issues at hand. Not only this, it drives globalization, the factors includes environmental and ecological aspects, and available services as well as products. It is in the favor of the companies that exist in the market to create barriers for the new entrants to prevent them from entering into the industry. The option has to be realistic and should have imperative results on the organization. It is a condition existing in the external environment that allow the organization to take an advantage of the organizational strengths, and help in overcoming the weaknesses and to neutralize the threats present in the environment. This could include suggestions, changes or recommendations to the company's vision, mission and its strategic objectives. This is the alternate solution that would be implemented if the original proposed solution is found infeasible or impossible due to a change in circumstances. It is a situation that arises as a result of the changes that took place in the immediate or distant environment, preventing the organization from maintaining its existence and superiority in the growing competition and are disadvantageous for the organization. The acronym Lion Nathan And The Chinese Beer Industry SWOT stands for strength, weakness, threats and opportunities. Lion - Dairy & Drinks … Identify the relative market share of each strategic business unit. These are the political, environmental, social, technological, environmental and legal (regulatory) factors affecting the industry. Australian Customer Portal. Lastly, while doing the evaluation of Lion Nathan And The Chinese Beer Industry alternatives, it is important to quantify the options through different techniques. This is important as it allows the organization in meeting the ultimate goals and addressing the problem effectively. If it’s none, then it can be regarded as a competitive disadvantage. Furthermore, the establishment of the problem statement, allows the organization and the management teams to work in a specified direction. internal and external factors. In case an organizationis decreasing fixed asset turnover so it means that the production has been running at lower than capacity. The realistic and SMART nature of the option is important to be considered and developed, so it offer maximum value and also resolves the problem effectively. The culture or social influence on certain businesses vary from country to country. In Porter's Five Forces analysis, the industry is analysed along 5 dimensions. Analyse the company’s distribution and reach. It can also be done by looking at anecdotal instances of managers or employees that are usually included in an HBR case study description to give the reader a real feel of the situation. The first step of the solution is to come up with a corporate level strategy for the organisation. Also, they make use of these internal strengths and weaknesses to make use of opportunities and ward off potential threats, for example, … What's swot in strategic analysis? These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting. From the standpoint of owners, the key value drivers may be the growth potential company’s key services and products, key technology capabilities providing the competitive edge, superior process’s cost effectiveness as well as the strategic differentiated positioning. It is noteworthy, that the charities needs to be included where a government are not willing services and goods to be provided. Fixed assets turnover: it is supposed to be vulnerable to the asset valuation issue. The clear problem statement is developed by stating the factors and the operations getting effected and its overall impact on the organization specific the areas, such as Profitability, sales or brand equity. The acronym Lion Nathan And The Chinese Beer Industry SWOT stands for strength, weakness, threats and opportunities. In these cases, recommendations need to be made for these people. Moreover, the recommendation also needs to entail the plan B, that if for instance the results are not generated as per the plan, the second set of recommendation must be incorporated in the plan, in order to allow the organization to quickly shift to the plan B, in order to avoid the losses and sustain the presence of the company in the market. The tools used in identifying the solution consist of the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis. Nonetheless, the analysis needs to be conjunction with other frameworks such as S-W-O-T analysis in order to get a more realistic picture. As a framework, SWOT does processes a value but it doesn’t provide the organization with any specific direction on how the key aspects can be identified. Weaknesses-Lion Nathan like any company had a few weaknesses that needed attention.-One weakness that struck me was the fact that they were getting into an already declining market. Cash Cows are those strategic business units with high market share and low market growth rate. Lion Nathan Limited is one of the leading brewers in the Australasian region, with the number one spot in New Zealand (its former home) and the number two position in Australia. The merit factor, outlines if the option really resolving the issue or aligned with the given situation. While the typical investor shows their greater interest in absolute change in shares value, the insights from the stock performance to the appropriate average and to the market for some industries are supposed to be helpful to assess the company’s particular trend (Rappaport, 2010). As these aspects negatively affect the overall performance of the organization by making it weaker compared to its competitors. PO Box 23, Auckland, 1140 +64 9 347 2000. The matric can be adjusted for thepurpose of reflecting the average equity amount being employed during the span of year, giving the more accurate and realisticpicture of how the organizationhas been performing throughout the year. One is also required to provide how these recommendations would be implemented. The following year, the company stepped up its position in the region with the … Business Strategy Review, 14(2), 8-10. Internal dimension includes all the factors that could affect the organization which is the strength and the weakness while the external factor includes the environmental factors that is the opportunities and the threats. An upper performance quantile can be the most appropriate performance standard (D’Aveni, 2007), The Lion Nathan And The Chinese Beer Industry assessment of the operational efficiency in the initial stage as a whole for business or any of the business sub-division is likely performed through a percentage analysis of income statement. In New Zealand, Lion Nathan is country’s leading brewer and now considered the second largest wine distributor with its market share of more than 50%. Lion Nathan built a good reputation in China and therefore a strong customer base of loyal customers. It is a deficiency or limitation of resources, capabilities, skills that majorly affect the organizations effective performance. Lion - Dairy & Drinks … At other times, finding the issue is the job of the person analysing the case. Many times these options are already in hand with the management or re-developed from the scratch through strong brain storming. Lion Nathan's beer brands include XXXX, Tooheys and James Boags. On Friday, Lion said that throughout the COVID-19 shutdown, it was able to continue to brew beer safely, that it had stock at hand, and it was gearing up to increase brewing. European Journal of Forest Research, 126(3), 413-420. At times in a case analysis, the problem may be clearly evident in the reading of the HBR case. Therefore, being the use of the financial ratios would provide assistance thereby leading to the overloaded information. The useful snap shot can be taken by analyzing the financial condition of an organization in a particular time period. Lion Nathan today revealed details of a new marketing campaign to support the Natural Beer Promise initiative. Therefore Porter framework due to its limitation is too inert to be depending upon outside the short term to medium, term objectives. In other words it means the aspects in which the organization is less efficient and needs to improve in order to align with the market trends. It is an unfavorable situation that exist in the environment making it difficult for the organization to achieve its defined goals. We employ more than 6,000 people across Australia and New Zealand predominantly. Basically, developing a problem statement is an extensive process and requires the proper brain storming of the teams in order to identify the underlying loopholes or inefficiencies within the organization. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. Stability:the ability or an organization to remain in the business for the longerperiod of time without sustaining significant losses while conducting the business operations. It is a good idea to also propose alternative case study solutions, because if the main solution is not found feasible, then the alternative solutions could be implemented. The organization can develop new products for the existing market. Question Marks are those strategic business units with high market share and low market growth rate. It is due to the fact that such analysis allow the organization to see, if the option will remain strong in future or not. Once this listing has been done, a clearer picture can be developed in regards to how strategies will be formed to address the main problem. The solvency depends upon the balance sheet of company indicating the company’s financial condition at a given period of time. The consideration of cost is important in the alternative generation in order to attain the maximum feasibility with overall business strategy and the budget allocated. Lion Beer Kettle. Days of inventory: it is the indication of how the company efficiently managing inventory. Retrieved from https://poetsandquants.com/2015/09/29/how-they-teach-the-case-method-at-harvard-business-school/. Value of firm:this is the most common concept recognizing the components of capital structure of an organization debt and equity are tends to be values separately in the market. By having a closer look over the matrices used for financial analysis, it is to say that the financial statements holds notable importance because it evaluates the management performance, plans and corporate strategy for future. This gives the organization a competitive advantage over other firms, unlike a red ocean strategy. A series of TVCs, developed in partnership with Publicis Mojo Sydney, will launch on free to air TV this Sunday night, raising awareness of the recently launched platform and encouraging drinkers to seek a natural choice in beer. This makes recommendation more firma and acceptable. The BCG Matrix is an important tool in deciding whether an organization should invest or divest in its strategic business units. This tool is used in the case study analysis as follows: Recognizing value creating activities and enhancing the value that they create allow Lion Nathan and the Chinese Beer Industry to increase its competitive advantage. IIBMS. The robustness of the option also needs to be analyzed. Analyse the company’s products and devise strategies to improve the product offering of the company. If the number of buyer are limited or each of the buyer purchases large quantity relative to the size of the suppliers. Lion - New Zealand . The ration lay under profitability are discussed below; Return on assets (ROA): it is one of the most commonly and widely used performance measure of an organization. Register now to order Lion products for your business. Consumer Enquiries AU: 1800 308 388. The second step of the solution is to come up with a business level strategy. The factors or forces are discussed below; These are the Lion Nathan And The Chinese Beer Industry forces that tends to be altered by the influence of government on the infrastructure of country. Such is important to analyze or else it would lead to failure. This includes the advertisement, public relations, personal selling, sales promotion, and direct marketing. Lion’s beers can be found on-tap, served to perfection, in almost every pub, club and hotel in Australia — Lion Nathan engaged IDEO to undertake the product research and an in-depth round of user testing (voice of the customer) to determine the product realisation strategy. Exploring SWOT analysis – where are we now? Therefore choosing clients often become crucial for the organizations as to avoid the situation of being highly depended on the buyers. Each of these resources are assessed in terms of the value it brings to the organization. It also helps one in developing the case study solutions. There are many occasions, in which the environmental changes have an adverse influence on the project that might not be noted in the initial stages of project, indicating that the uncertainty sis still there even after the pestle analysis have carried out. Under the evaluation of alternatives the pros and cons of the alternatives developed above are gauged based on the benefits they offer to the organization and also the strengths the carry that may help the oragnation in overcoming the problem. It shows that one has developed an ability to prioritise recommendations and how these could be successfully implemented. New customer registration. Retrieved from https://www.hbs.edu/mba/blog/post/8-tips-to-help-you-prepare-for-the-case-method. In particular section, the management/teams develops different options through which the problem can be resolved. It is more concentrated than the industry it is selling to. The usual or common procedure for pestle analysis is presenting a simple list of the environmental factors affecting the project. Each resource is assessed in terms of how rare it is. The suitable benchmark can be found with some problems such as unique attributes problem and averages problem etc. The HBR case studies may present issues faced by a part of the organisation. The organization can enter new markets with its existing products. To conclude, PESTLE analysis is considered as an effective tool of planning and it offers viable and effective technique foranalyzing and scanning the operating environment of an organization. The PESTEL analysis discussed previously looked at the macro environmental factors affecting business, but not the microenvironmental factors. The SWOT analysis is only a one stage of the business planning process and do not provide the organization with an in-depth analysis or research that could lead to a firm decisions. For example, if one suggests the organisation to focus on differentiation for competitive advantage as a corporate level strategy, then it can't be recommended for the Lion Nathan and the Chinese Beer Industry Case Study Solution that the business unit should focus on costs. Day’s receivables: it is the measure of how long will it takes for an organization collecting bills owing to it. Harvard Business Review: Strategic Planning, How Competitive Forces Shape Strategy. There are two equally important ratios used as indicators of the values of stock market. The steps to be followed in this analysis is as follows: The strategies identified from the Lion Nathan and the Chinese Beer Industry BCG matrix and included in the case pdf. One of the unavoidable advantage of this model is thatit has begun establishing benchmarks – across companies and over the period of time which can be used for flagging the potential issues areas where more than one ratios are reflecting the key problem or issue. Locked Bag 14, Royal Exchange Sydney, NSW 1225 . Lion Nathan and the Chinese Beer Industry should focus on making use of its strengths identified from the VRIO analysis to make the most of the opportunities identified from the PESTEL. Place these strategic business units in one of four categories. This is important, as it allows the reader and stakeholders to understand the proven facts, and the pasts results such recommendation has harvested, leading to more acceptability and also the determination of the plan that may be in need to be  adopted so to avoid the delays and resistance in the organization, while implementing the change. Threats are the factors that prevent the organization from the actualization of an activity. Lion Nathan and the Chinese Beer Industry should invest in its stars and cash cows, while getting rid of the dogs identified from the BCG Matrix analysis. It is most important ratio in companies which are capital intensive. It's nothing fancy but it's a half-decent beer for a kit at last than $20 bucks. It involves coming up with new and unique products or ideas through innovation. The products in the industry are standardized or are undifferentiated. Queensland's iconic XXXX beer could be in short supply in coming weeks as owner Lion Nathan grapples with a major cyber-security breach. Lastly, under the recommendation, it is important to incorporate the finding from the past, so to make the given Solution more acceptable. An organization should consider the influence of the national and international laws where the organization would originate the business operations. Journal of Strategy and Management, 3(3), 215-251. SA Brewing was bought by Lion Nathan in 1993. By assessing the stability of the company needs use of balance sheet and income statement as well as non-financial and financial indicators. Stars are those strategic business units with high market share and high market growth rate. The collection time is measured by days receivables on credit sales.With increasing day’s receivable, the company would need more working capital. Locked Bag 14, Royal Exchange Sydney, NSW 1225 . The simplicity factor analyses if the option proposed is easy to implement. Porter, M.E. It is also important to understand what stakeholders are affected by the problem and how. The reliability factor includes if the option developed is successful or has the successful track record in the past or with the pats companies. It helps in determine the organizational and environmental factors that could affect the decision to be made. Profitability:the financial analyst generally assess profitability of an organization since it is the ability allow organization sustaining growth and earing income in both long term and short term. It is effectively used in building strategies for the organization to maintain its competitiveness in the market. Credit: Dominic Lorrimer. Moreover, it also determines the Imitable factors. Kotler, P., & Armstrong, G. (2010). 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