Proposed Solutions For The Problems Of The Multi National Company Of Chupa Chups

1005 words - 4 pages

S. A. Chupa Chups is a Multi-National Company that has grown internationally since its inception in 1958. Reasons for successes of this company have been their aggressive approach in developed and developing nations as well as the partnership they do with existing firms in those nations. The problems I noticed with their development were their efforts to diversify from core competencies and their organization structure that was central-based and did not highly promote worldwide learning from experiences.

Problem I:

The first problem I'm noticing in this case is the effort being put forward to diversify from their core competence, making confectionery products. I do understand that it may be economically sound to diversify into markets that are complimentary to your core where economies of scale could be realized. But in this case it seemed like Chupa Chups was trying to build a kingdom where everything they needed would be supplied by an internal source.

The scenario where Chupa Chups partnered with the bread baker to make cakes was a great use of their core competence being leveraged for other revenues. In this case, there were common resources required for both the candies and the cakes that Chupa Chups didn't have to recreate because of their presence in the industry.

There were other instances where Chupa Chups developed its own distribution system for the products. I feel that there were opportunity costs involved with doing this that could have been defrayed by outsourcing the distribution and investing that capital into making candy.

Proposed Solution(s):

There are two options being recommended that will provide a solution to this problem. The first one assumes that Chupa Chups has a competitive advantage in their confectionery products and that there's another company with the competitive advantage in the other business areas. The solution suggests that Chupa Chups will divest itself of all of its auxiliary businesses that are not part of its core competence. They should outsource to another company that is able to do it with less resources.

The second option is for Chupa Chups to continue to diversify as they're doing, but instead of only providing the services to their confectionery business, to acquire other customers who will need such services. This way, they will be able to realize efficiencies from economies of scale.

Possible drawback(s):

The drawback of implementing the first solution is that Chupa Chups will be losing control of pieces of their operations. Although the solution proposes an advantage from where they currently are, it also has the drawback of placing all of their eggs in the same basket.

The second option has an opportunity cost risk. They have to chance of not being as profitable as possible for their stake holders because of the diversification.

Mechanism to overcome drawback(s):

Depending on which option Chupa Chups wants to go with, there are several mechanisms...

Find Another Essay On Proposed Solutions for the Problems of the Multi-National Company of Chupa Chups

Illegal Immigration from Mexico: Problems raised by illegal immigration as well as solutions, both proposed and enacted.

1158 words - 5 pages because it is hurting the legal American citizens. Immigration has always been welcomed in the United States; however, only as long as it is legal and law abiding. This nation cannot afford any more economic drains with all the problems the U.S. faces today. Illegal immigration has been a problem for hundreds of years and needs to be curbed and eventually stopped. The United States of America was built on immigration and many radical ideas which

Proposed Territory of the South Okanagan- Similkameen National Park Reserve

1369 words - 5 pages human habitation and conflicting shareholders. The balance between economic, societal and ecological needs must be properly addressed in order for the proposed areas of conservation to benefit both nature and the various stakeholders who have a rightful say in the matter. And because conservation and the designation of national parks is a global issue, Canada can learn from previous examples, both from within its borders and internationally, to

What are the security problems and solutions of the Internet?

1356 words - 5 pages you're a large company, is not justifying the expense or effort, but convincing management that it's safe to do so. A firewall provides not only real security--it often plays an important role as a security blanket for management.¡¨ (7) Currently, many companies and organization are making us of Firewall to protect their remote accessible network. Last but not least, the most dangerous hacker is not from outside. Past experiences told us that

"An Advice on the feasibility of a merger between the American Action Company and the German Multi Company"

7188 words - 29 pages , when people from these countries work together. But in conclusion one can say that from the analysis of national cultures, values and attitudes in general are similar and therefore a merger would be possible.Taking the microanalysis into account, many potential problems between company cultures become obvious. Firstly, the leadership styles differ completely. While hierarchy is very important at the Multi Company, participation is crucial at the

Proposed Solutions to the Foreclosure Crisis

1047 words - 4 pages different companies. Competition is the strongest factor between quality and cost. If a new company specializing in helping families afford their rent or mortgage payments develops, they will offer solutions cheaper than the other companies currently in the market. This could also lead to more affordable plans for low-income families because most of the financial plans set in play require over thirty percent of a families combined income which

Role of the National Cyberspace for American National Security

3032 words - 12 pages Role of the National Cyberspace for American National SecurityTerrified, panic, chaos and terrorism. These are a few words that could be used to describe the terrorist attacks on the United States during the day of September 11, 2001. These attacks scarred American history and everyone who remembers it forever. But imagine if the terrorist who organized these attacks also had attacked the United States cyberspace. What if terrorist used

Success of the National Organization for Women

2263 words - 10 pages rights, violence against women and economic justice(National Organization for Women, 2012). The organization has been quite successful in raising awareness and creating social change over the years. By using the Social Problems Process to analyze the organization it would then become evident as to why NOW has been so successful, where they still need to improve and where they are heading. The first part of the Social Problems Process is

Change Process of Lizard Lick Fine Paper Mill: Diagnose the problems, identify solutions/interventions, and develop an action plan for the paper mill.

8322 words - 33 pages 1.0 INTRODUCTION1.1 PurposeThe purpose of this report is to evaluate and diagnose the problems existent in Lizard Lick Fine Paper Mill, and how they have caused the company to lose their competitive edge. Solutions and interventions are also to be identified for the problems diagnosed, and an action plan for all parties involved in the necessary changes within the company will be developed for implementation.1.2 ScopeThe scope of this report

Proposed Solutions to the Foreclosure Crisis in America

1815 words - 7 pages of their shareholders. Freddie Mac and Fannie Mae bypass this by being backed by the government. Any organization backed by the government cannot fail unless the government fails, therefore allowing for more risk by the company. Unsurprisingly, this was exactly what the two mortgage companies did, by introducing adjustable rate mortgages to low income, and in some cases, no income debtors. These people had little means with which to pay off

Analyse at Least Two Recently Proposed Solutions to the Problem of E-Waste in Order to Determine Which is the Most Effective

1338 words - 5 pages for recycling and environment. However, there is an issue with “orphan products” when the producer is unknown, as well as imported goods that can also create such problems, because of high cost of recycling manufacturers will not pay for it. In addition, products can outlive its’ producer, in this case government face the same situation. Many countries have already implemented EPR. Its’ administration in developing countries seems to be more

The Internet: A network of Controversies Exploring the problems and solutions of offensive content on the Internet

1820 words - 7 pages pornography are victims of sexual assault; there is no difference. Victims will suffer psychological effects for the rest of their life, and are at a higher risk of depression, substance abuse and suicide (On Child Sexual Assault).Although pornography is a major problem, the lack of law on the Internet also raises other problems. "Peer to Peer" programs are allowing piracy on the Internet by enabling users to download music, movies, programs, images

Similar Essays

Case Study Of National Insurance Company And Full Analysis Of The Problems Faced By The Company

2602 words - 10 pages is to understand the various issues in National Investment & insurance company (NII), a call centre whose main business in selling and servicing insurance packages for both individual and corporate customers. Company has recently discovered some problems within its staff and overall working of the company. All such related issues are discussed below. Help of various research papers and journal articles has also been taken to underpin the

Problems Associated With Drought In Africa, And Proposed Solutions

2036 words - 8 pages Africa's farmers, it has rejected the idea of carbon trading. The European Union stated that it's conservative about the idea of measuring carbon in the African farms (Pearce, 2006). One of the promising solutions to African problems is seawater irrigation. There are successful experiences for irrigation by using seawater in different regions around the world. In Mexico, for example there are more than 600 acres of desert which turned into

Problems In Airt Raffic Control And Proposed Solutions

4380 words - 18 pages apa format -Problems in Air Traffic Control and Proposed SolutionsIn northern California this summer, the Federal Aviation Administration (FAA) unintentionally performed it's first operational test of 'free flight'; aviation without direct air traffic control. This was an unintentional experiment because it was a result of a total shut-down of the Oakland Air Route Traffic Control Center (ARTCC).Although Oakland is only the 16th busiest ARTCC

Dilemma In The Workplace The Enron Corporation. Includes Background On The Company, Key Problems And Issues, Who Was Affected, And Evaluations And Solutions. 3,010 Words. Greatly Detailed.

2933 words - 12 pages pipeline; however, Enron would have the option to repurchase the pipeline in June of 2002. (C-Span.com, 2002)Key Problems and IssuesThe Energy financial group ranked Enron the sixth largest Energy Company in the world. In January 2001, Enron's stock hit a closing high for the year at 82.00 dollars per share (Goldberg & Davis, 2001). Investors and analysts knew Enron's financial statements were very complicated, but because Enron did not show any