Operations management for competitive advantage solutions pdf

Mars Inc. Strategic Plan

STRATEGIC PLAN The challenge of development and retention of "Millennials" work force at Mars Inc. Company"

1. Summary

2. Company’s background

3. Vision

4. Mission

5. Company’s values

6. Environment a. internal work environment b. external environment

7. Long term objectives

8. Strategy chosen and strategic analysis

9. Goals and execution of plan

10. Financial forecast and financial analysis

11. Critical factors for success of strategic plan

12. Evaluation and control

Extra sources Nutraceuticals World. Apr2019, Vol. 22 Issue 3, p26-26. 1/2p. Aroq - Just-Food.com (Global News). 6/25/2019, pN.PAG-N.PAG. 1p.

COMPANY PROFILE

Mars, Incorporated

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Mars, Incorporated TABLE OF CONTENTS

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TABLE OF CONTENTS

Company Overview ........................................................................................................3 Key Facts.........................................................................................................................3 SWOT Analysis ...............................................................................................................4

Mars, Incorporated Company Overview

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Company Overview

COMPANY OVERVIEW

Mars, Incorporated (Mars or 'the company') is involved in the manufacturing, distributing, and marketing of confectionery products, pet food, drinks and other food products. The company offers its products to distributors, specialty stores, retailers, and veterinary practices under several brands including M&M's, Snickers, Dove, Mars, Wrigley’s, Orbit, Extra, Pedigree, Whiskas, Royal Canin, Double mint, and TWIX. The company’s manufacturing and distribution facilities are spread across North America, Asia Pacific, Europe, Latin America and the Middle East. Mars also operates pet hospitals in the US and Canada. The company is headquartered in McLean, Virginia, the US.

The company generates revenues of $35,000 million annually. Mars is a privately-owned company and does not publish its financial results.

Key Facts

KEY FACTS

Head Office Mars, Incorporated 6885 Elm Street McLean Virginia McLean Virginia USA

Phone 1 703 8214900 Fax Web Address www.mars.com Revenue / turnover (USD) Financial Year End Employees 115,000 Ticker

Mars, Incorporated SWOT Analysis

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SWOT Analysis

SWOT ANALYSIS

Mars, Incorporated (Mars) is engaged in manufacturing and marketing confectionery products, pet food, drinks and other food products. Diversified geographic presence, and comprehensive product portfolio complemented by strong brands are the company’s major strengths, even as Private ownership remains a cause for concern. Growing pet care healthcare industry in the US, growing confectionery market in the US, and focuses on nutrition products are likely to offer growth opportunities for the company. However, increase in labor wages in the US, compliance with government regulations, and changing consumer preferences could affect its business operations.

Strength

Diversified geographic presence Comprehensive product portfolio complemented by strong brands

Weakness

Private ownership

Opportunity

Growing confectionery market in the US Growing pet healthcare industry in the US Focuses on nutrition products

Threat

Changing consumer preferences Increase in labor wages in the US Compliance with government regulations

Strength

Diversified geographic presence

The company has a strong geographic presence worldwide. Mars operates over 413 sites, including manufacturing and R&D facilities in more than 80 countries worldwide. Different businesses of Mars have diversified presence across the world. Mars Petcare, based in Brussels, Belgium, has presence in 55 countries around the world and Mars Wrigley Confectionery has operations in more than 70 countries and distribution activities in over 180 countries. Mars Food has presence in more than 30 countries. Mars Drinks business has operations across North America, Europe and Asia. Mars operates 12 manufacturing plants worldwide. Diversified geographical presence enables the company to hedge the risks of revenue loss in matured markets like North America and Europe from growth prospects in the emerging markets like Latin America and Asia Pacific.

Comprehensive product portfolio complemented by strong brands

Mars owns an extensive portfolio of leading global products and brands. The pet care business offers a wide range of pet food products under 50 brand names that include Pedigree, IAMS, Royal Canin, Whiskas, Banfield, Cesar, Sheba and Temptations, among others. Of these, Pedigree, IAMS, Royal Canin, Whiskas and Banfield are billion dollar brands. The company sells its chocolate products under 29 brand names such as M&M's, Snickers, Dove, Galaxy, Mars, Milky Way, Twix, 3 Musketeers, Balisto,

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Bounty, Maltesers and Revels, among others. M&M's, Snickers, Dove/Galaxy, Mars/Milky Way and Twix are billion-dollar chocolate brands of the company. The company's food segment comprises 13 brands that are available in more than 30 countries. Of those, Uncle Ben's is a billion-dollar global brand and is more than 70 years old. The Wrigley business offers products under various brands, among which, Wrigley's Spearmint, Juicy Fruit, Altoids, Life Savers and Doublemint have a long standing presence of more than 100 years. Mars' drinks business offers five brands such as Klix, Flavia, Alterra, The Bright Tea Co., and Dove. As a result of an extensive product portfolio and a strong brand portfolio, Mars holds leading positions globally. For instance, Mars Chocolate is among the leading chocolate manufacturers in the world. Mars Petcare is also one of the leading pet care providers globally. The extensive product portfolio provides a diversified source of revenue for the company, while the strong brand portfolio lends better visibility and presence in all distribution channels and enables Mars to reach a large customer base. This in turn, increases its market penetration opportunities. Market leadership not only provides a competitive advantage, but also enhances the company’s bargaining power.

Weakness

Private ownership

Mars is a privately-held company. Although the company produces, distributes and markets confectionery products, pet food, drinks and other food products, the company is still mired by the various challenges that a privately-owned company faces. It has limited management layers and as a result, the decisions are always taken by few members which might be detrimental for the company. On the other hand, public limited companies have an edge over these companies as they are required to have sufficient members on the management and company’s board, thus providing a wider perspective of any business dilemma and makes decision making easier and efficient. These companies are also mandated to disclose their financial and operational activities, thereby providing transparency in their operations and generating goodwill for the company. This also helps the company raise funds from the market at favorable terms. Thus private ownership puts the company at a disadvantage over its public limited counterparts.

Opportunity

Growing confectionery market in the US

Mars manufactures and distributes confectionery products in the US. The growing confectionery market is likely to provide new growth opportunities to the company by increasing the demand for its products. The demand for convenient snacks is leading to growth in the market for confectionery products in the US. Product innovations and creation of new low-fat and low-calorie products are contributing to the demand for sugar-free chocolates and non-chocolate confections. Promotional activities and social media marketing are the other driving factors in the market. Products in small sized packs and innovation with different formulations and new textures are also influencing the sales of confectionery products in the country. According to in-house research, the confectionery market in the US was valued at US$39,005.2 million in 2018, and is expected to grow at a CAGR of 3.5% during 2018-23 to reach US$46,435.1 million by 2023. In terms of volume, the confectionary market in the US was 2,900.4 million kilograms in 2018 and is expected to grow at a CAGR of 2.1% during 2018-23 to reach 3,220.2 million kilograms by 2023.

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Product category wise, chocolate accounted for 56% of the total value of confectionary market in the US, followed by sugar confectionary with 35.4%, and gum with 8.6% in 2018.

Growing pet healthcare industry in the US

The company stands to benefit from the growth in pet healthcare industry in the US. According to in- house research, the US market for pet healthcare market is expected to reach a value of US$11,722.4 million by 2022 from US$10,338.6 million in 2017. In terms of volume, the pet healthcare market is expected to reach 1,178.1 million units by 2022 from 1,125 million units in 2017. Product category wise, grooming products accounted for 24.5% of the total value of pet healthcare industry, followed by external parasite treatments with 23%, pet supplements with 21.8%, worming treatment with 17%, and other pet healthcare with 13.8%. In accordance with this, the company entered into some strategic initiatives, including in January 2019, the company through its subsidiary VCA Inc acquired 50% interest in PetCare SA.

Focuses on nutrition products

The company focuses on preparing nutrition products to accelerate its new business opportunities. In line with this approach the company made some strategic initiatives including in June 2019, the company entered into an agreement to acquire Foodspring, a German nutrition food manufacturing company. The Foodspring product portfolio includes protein shakes, supplements, snacks & bars, muesli & porridge, smart cooking solutions and a range of beverages and it registered a strong brand image as producer and marketer of nutrition food across Europe. Through the acquisition, the company could strengthen its brand image across Europe. In May 2019, the company signed a partnership agreement with Jerusalem Venture Partners, an international venture capital fund, to provide support in creating innovative technology solution for making food, agriculture and nutrition foods worldwide.

Threat

Changing consumer preferences

The company’s operations are subject to ever changing consumer preferences. It must continuously develop, produce and market new products in order to maintain and enhance the recognition of its brands and try achieving a favorable mix of products. Consumer spending patterns and preferences that change rapidly cannot be predicted. The decrease in the market demand and change in consumer spending may result in inventories that are too high or cannot be sold at anticipated prices. The company’s business, financial condition and results of operations could be affected if it is unable to adapt to the trends in the market.

Increase in labor wages in the US

Increasing manpower costs may have a negative effect on the company’s operating costs and adverse effect on its profits. The tight labor markets, government mandated increases in minimum wages and a higher proportion of full-time employees are resulting in an increase in labor costs. The federal minimum Labor costs are rising significantly in the US. The federal minimum wage provisions are contained in the

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Fair Labor Standards Act (FLSA). As of January 2019, the minimum wage rate in the US was US$7.2 per hour. The minimum wage rate in 29 states and the District of Columbia is more than the federal rate. These wages range from US$ 13.2 in District of Columbia, US$12 in Massachusetts and Washington, US$11.1 in Colorado, US$11 in Arizona, US$10.8 in Vermont, US$9.9 in Arkansas, US$8.5 in Florida, US$8.2 per hour in Illinois. The minimum wage in the District of Columbia reached US$13.3 per hour.

Compliance with government regulations

The company's operations are subjected to extensive regulation by the California State Department of Food and Agriculture, the Federal Trade Commission, the U.S. Food and Drug Administration, federal and state taxing authorities and other state and local authorities. The regulations by these authorities concern the tax regulations, food safety standards and the processing, packaging, storage, distribution and labeling of the company’s products. The company’s plants and products face steady inspection by federal, state and local authorities. Additionally, the company is subject to new or changed regulations, laws and accounting policies. If, the company’s fails to follow or is not in a position to fulfill with such requirements it could be subjected to civil remedies, including injunctions, fines, recalls, or seizures, apart from potential criminal sanctions. Hence changing rules and regulations exposes the company to potential sanctions and compliance costs that could adversely affect the company’s overall operations.

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