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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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INTRODUCTION

You've just started as a director of marketing at Mars. Before you started at the company, your CEO made a bold announcement that Mars will buy a minority stake in Kind LLC, the maker of snack bars. He is now getting cold feet as he prepares to defend his decision at the next shareholders' meeting and discuss what the future holds for Mars and Kind. He knows that you are a TRSM graduate and are very buttoned-down so asks you and your team to complete a Situation Analysis Report and make a recommendation as to whether he should carry on with his plan, or pursue growth of a different kind.

SITUATION ANALYSIS | STRENGTHS

1. Global Presence

The chocolate industry possesses a moderate level of competition, meaning the top companies in the industry do not possess most of the revenue. The top five companies share combined together amount to 36.1% of the total business. These companies include Nestle, Mars, Hershey etc. Almost all of these companies have revenue in the billions showing the wide amount of companies in this business as firms with that amount of revenue combined only amount to less than 40% of the entire industry. Among these competitors, Mars shines along the rest of the top five with the strengths that help not just maintain, but further enhance the corporation. Their main strengths include the incredible global presence, product advances using research and development activities, product and brand portfolio.

Global presence is one of the key factors surrounding MARS incorporations continue on success. This factor is the consider development of a venture's business undertaking sports into universal areas in a few locales for the term of the world. Worldwide enlargement implies more than simply making investments in countries outside of the agency's home; the idea includes retaining an real commercial enterprise presence in those countries. MARS is one of the world greatest offering petcare items and chocolates. They have more than 25 brands, including US $5 billion brands. A few cases would be M&M's, laughs, TWIX and so on. One of the significant brand names that MARS sustenance hold is Uncle Ben's, which is around 50 years of age and it is a one billion dollar mark. Some of the other examples would include Doublemint, Extra, Orbit and 5 other chewing gums and confectioneries such as Skittles, Altoids, Starburst and Life Savers.  

2. Research & Development Activities

MARS researchers lead inquire about in nourishment, Petcare, wellbeing and health, genomics and hereditary qualities. It works possess labs and research offices and its analysts are situated in areas over the globe. The organization works Global Food Safety Center, an examination and information sharing establishment in Huairou, China; and the Mars Center for Cocoa Science in Bahia, Brazil for explore identified with cacao rearing, agroforestry frameworks and biodiverse situations. They operate their own laboratories and research facilities. They partnered with a number of scientific collaborators worldwide, including the brigham and Women's hospital, the EU FLAVIOLA consortium and the US National Institutes of Health. This strength the possibilities on endless development inside the products department which could lead to better opportunities for customer growth and satisfaction. If a group of target customers who prefer different types of chocolate can all be satisfied within Mars merchandise, then consumers would stay loyal.

3. Variety of Products

MARS incorporation offers chocolate items, snacks, nutritious nourishment, sustenance for pets, and drinks. The organization offers items to clients crosswise over North America, Europe, Asia-Pacific, Africa, the Middle East and Latin America. Also, the business has earned the lead ranking in the world-wide pet-care products and services. Some other competitors include Nestle, Colgate and more. Mars petcare has been in commission for over seventy years, running major brands such as Pedigree, Royal Canin, Sheba. Mars Petcare is a big revenue factor in the company as the world per care value share as of 2015 of the business was 18.5%, which is a lot higher than its packaged food value share at 1.3%.  Mars chocolate products known world-wide include m&m's, Snickers, Twix, Skittles, Bounty, Mars, Milky Way. All these products strengthen Mars as a business because they please a wide range of consumers including Bounty for clients who might like coconut, Snickers for those who prefer harder chocolate. Furthermore, Mars serves other beverages such as single-serve hot drinks, which include Flavia, the world's first system used to make hot drinks, Alterra Coffee roasters coffees etc. All these varieties of products make Mars into a formidable opponents to rivals and also a thriving company. This is because in order to survive in the world-wide competition you not only have to better your products, but also have to increase the range of products you sell.

SITUATION ANALYSIS | WEAKNESSES

MARS LTD places in the middle of the market, however there was some criticism for

reducing the size of the packs that were being sold to the customers. The reduction in size did

in fact, affect prices of the goods and also some sales. Some customers were content with the

new change and other customers would complain about the size of the packaging. The

company's resources are being used more efficient in the costs of sales. This will affect the

company's future as making changes to the sizing of their products can cause a big impact on

the sales.

Another weakness that is brought up is its performance in the year of 2017, the

awareness about health and wellness trend in the UK, salmonella fear caused a large part the

company's portfolio no longer sits well within the current market dynamics. The need for new

resources were needed to keep the products they sold to be healthy and risk free of salmonella.

this caused the company to use more of its money towards resources which is pricier. This will

affect the company's future as more resources are needed to make the products healthier for

its consumer. The company is paying more for a healthier product.

In the bigger markets, Mars lacks the premium offering the other companies do; Lindt

and Lindor are examples of companies that offer a premium. This weakness allows for its

competitors to have an advantage. This advantage over Mars will cause consumers to oversee

their products and become more interested to the more premium products offered by the

competitors. This company lacks in its presentation skills, its competitors are able to achieve

high marketing numbers for the company, affecting the number of consumers.

All the weaknesses that are listed will have an impact on the company's future capabilities, resources and processes. The need for new resources for creating healthier

products, the criticism received for the reduction in sizing and its premium offering have a

negative impact on the company's sales. These factors give its competitors and advantage of

selling more products and attracting more consumers.

SITUATION ANALYSIS | OPPORTUNITIES

The association will enable KIND to keep on driving positive change in the sustenance business while satisfying – on an overall scale – its kind guarantee, an arrangement of nourishment rules that have guided the organization's advancement since its establishing. KIND will furnish Mars with a spearheading and trusted brand to stay a recently framed worldwide wellbeing and health stage, while Mars will furnish KIND with its demonstrated global model to venture into new markets. KIND will keep on operating freely, drove by its dominant part partners, author Daniel Lubetzky and the KIND group, with its current central station in New York, NY. As a feature of the assention, Mars will lead the development of the business outside the U.S. furthermore, Canada, joining forces with KIND as per the KIND Promise.

The organization will empower KIND to quicken its double mission to make its solid and top notch sustenances accessible to more individuals over the globe and make the world a little kinder through important social effect activities. It will likewise empower KIND to venture into new classes.

"When we presented our first entire nut and natural product bar in 2004, we set out on a driven mission to do things any other way and test false bargains by offering tidbits that were solid and delicious and in addition healthy and helpful. It's been energizing to see the compass and effect of our central goal, and with our association with Mars, we're anticipating proceeding on this trip as we enable more individuals to settle on adhering to a good diet choices over the globe. We remain completely dedicated to our controlling standards, including our responsibility regarding dependably utilize a nutritious sustenance as the first and dominating fixing in each nourishment item," said Daniel Lubetzky, Founder and CEO of KIND. "We're glad to join forces with Mars, a family-possessed, standards driven organization with a demonstrated reputation of holding a long haul view, and anticipate working with them to improve this a world for who and what is to come."

"This is an organization based on common reverence and a mutual vision for development," said Grant F. Reid, CEO and President of Mars. "We accept there is huge chance to expand on the accomplishment of KIND's item portfolio in new markets. As we keep on expanding our business and widen our portfolio to address developing purchaser needs, we're charmed to collaborate with a regarded pioneer in the wellbeing and health space."

Consistently a great many individuals do the KIND thing for their bodies by eating KIND's snacks. As KIND keeps on extending, it will satisfy its KIND promise by:

• Continually utilizing a nutritious sustenance as the first and transcendent fixing in each nourishment item;

• Failing to use simulated sweeteners or sugar alcohols;

• Utilizing as meager sugar as could reasonably be expected while accomplishing awesome taste;

• Making nourishments that are both sound and delectable;

• Being straightforward about everything from fixings to naming;  

• Creating nourishments made with insignificantly handled, genuine fixings; and

• Treating its nourishments and individuals with honesty.

The association will likewise enable KIND to scale its social mission and satisfy its vision to utilize business as a vehicle for social change. In that soul, Daniel Lubetzky wants to give $25 million to The KIND Foundation, a different magnanimous element that means to cultivate kinder and more sympathetic groups.

SITUATION ANALYSIS | THREATS

The main biggest threat to the Mars, Incorporated is the possibility of Kind LLC wanting to make decisions that don't necessary benefit Mars Incorporated, or may even be detrimental to

Mars Incorporated. According to Grant Reid, president and CEO of Mars INC, “This is a

partnership built on mutual admiration and a shared vision for growth” (Mars, KIND

Partnership, 2017). While there seems to be no issue judging by Grant Reid's words, this isn't a

50% - 50% equal partnership. Mars only has a minority stake in Kind, and Kind will continue to

operate independently (Mars Boosts Health Food Cred, 2017). There is likely no need for

concern in the immediate near future, but what happens in the future if there comes a time where

there's a dispute in decision making process between the two companies? As Kind LLC owns a

majority stake, and will continue to operate independently, this gives them a leverage over Mars

INC on the final say in any potential decision making dispute. This may lead into huge problems

in the future if the partnership doesn't remain stable and beneficial to both parties.

Another huge threat to Mars INC is the political instability running rampant in the US

right now. The Mars INC headquarter is located in McLean, Virginia, United States and the Kind

LLC headquarters is located in New York City, New York, United States. As both the

headquarters for Mars INC and Kind LLC are located in the United States of America, it is

undisputable that the political environment will affect both companies. A non-profit organization

called The Fund For Peace looks at economic, political, and social indicators to create a Fragile

States Index (Fortune, 2017). According to the executive director for The Fund For Peace, the

United States index fell heavily due to political division. “Factors in the U.S. such as police

violence and the public unrest it caused, gridlock among national leaders and deep political

division led to significant deterioration of these three indicators out of 12 used to score each

nation.” (Fortune, 2017) A major cause of the political division may be due to President Donald

Trump and his very erratic and discriminatory ways which is causing civil unrest within the

country. This is very important to Mars INC because the political climate might negatively affect

the company, such as negative economic growth which affects all businesses in a country. One

very recent example is the new steel and aluminum tariffs imposed by President Donald Trump,

which is getting severe backlash by corporations and ridicule by other countries of the

presidents' incompetence and extreme lack of education on economics. As such, it isn't

farfetched to consider the political instability and division in the US a major threat to this

partnership and Mars INC as a whole.

A lower-tier threat to Mars INC, is the loss of income due to nut allergies, which is one of the main ingredients in healthy snack bars (Mars KIND Partnership,2017). There are over 15 million Americans with food allergies, including 5.9 million children, which results to around 2 students per classroom – a large percent which is purely nut allergies (FoodAllergy.org). This has resulted in many schools, not only in the US (E.G: Canada) to make classrooms nut-free zones. This in itself may be an issue due to these snacks not being allowed to be eaten during snack-time at schools which will result in loss of real income, but what's even more concerning is that “Between 1997 and 2008, the prevalence of peanut or tree nut allergy appears to have more than tripled in U.S. children” (FoodAllergy.org). A 300% increase in just 11 years is a serious sign for concern as that not only defers the population that has the allergy, but people around them too. The ban of nuts in public schools may also get extended to other public places or office settings as well, which will likely have a great impact on sales of a snack bar that uses nuts as one of its main ingredients.

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