Swot Analysis : Corporate Finance And Strategy

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Corporate Finance and Strategy

In previous assignment, we had chosen to use SWOT analysis on Kellogg’s to identify the strengths, weaknesses, opportunities and threats of Krave. This helped us to identify the market position of Krave, and we also used product life cycle to maximise Krave’s value and profitability in each stage from launching to obsolescence, which allowed Kellogg’s to decide ways to extend Krave’s lifespan such as introducing new versions and flavours to remain customers’ retention of the product as well as increasing the earnings.

Ratio Analysis
Ratio analysis provides Kellogg’s with a quick indication of their financial performance in three key aspects: Profitability, Liquidity and Solvency. It allows Kellogg’s to compare their performance with previous year’s performance as well as packaged food industry sector. This allows Kellogg’s to decide if improvement is needed.

Net Profit Ratio
Net Profit ratio is used to express the relationship between profit after deducting taxes from sales. Kellogg’s has generated 2.94 pence loss and 8.23 pence profit for every £1 sales in 2012 and 2013. This was due to Kellogg’s month long campaign on promoting heavily on a new flavour in 2012. (Facebook, No date) Since the campaign was held successfully, the effect of the campaign had boosted the sales of Krave in 2013. This illustrated why Kellogg’s has a loss in 2012 and profit in 2013.

Return on Capital Employed (ROCE)
ROCE used to measures Kellogg’s
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