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Strategic Analysis

Strategic Analysis. Patrick Hazelton Brandon Guenette Kody Cuvelier Ben McNabb Kyle Bunting. Agenda. Firm Overview External Analysis Internal Analysis Strategic Alternatives Strategic Decisions Recommendations Implementation Plan Contingency Plan . Firm Overview. Agriculture.

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Strategic Analysis

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  1. Strategic Analysis Patrick Hazelton Brandon Guenette KodyCuvelier Ben McNabb Kyle Bunting

  2. Agenda • Firm Overview • External Analysis • Internal Analysis • Strategic Alternatives • Strategic Decisions • Recommendations • Implementation Plan • Contingency Plan

  3. Firm Overview Agriculture Construction Financial Services

  4. External Analysis Porter’s Five Forces

  5. Strategic Group Maps

  6. Strategic Group Maps

  7. Internal Analysis Value Chain Firm Infrastructure • 40 Manufacturing facilities tailored to geographical needs, 11,300 dealers, 170 countries. HR Management • 28,000 employees worldwide, PLM Technology and Development • 28 worldwide Research and Development Centers Procurement • Concerned with how the resources are acquired for the business

  8. Internal Analysis Value Chain Inbound Logistics • GT Nexus, Visibility Hub, CAT Logistics Operations • Industry Leader, 3 Business Segments Outbound Logistics • Wide Distribution Networks, Joint ventures, cost effective. Marketing & Sales • Strong and Diversified Global Presence, Slogan: “Shaping Our World” Service • CNH Parts & Service is responsible for the company’s state of the art distribution facilities. • Emphasis on post purchase service, including diagnostics, maintenance and repair.

  9. Financial Analysis • Strong financial performance over 2011 • Net operating income increased by 176%, year over year • Solid growth in revenues of 23% compared to 2010 • Increases in expenses were on track with the increases in revenues • Cash Flow • Net cash decrease was $1,487m • Large investments were undertaken during 2010, causing the decrease • Positive-Negative-Positive relationship shows the firm is expanding its operations

  10. Financial Analysis • Balance sheet • Decrease in cash of 34%, primarily due to large short-term investment in Fiat industrial fund • The shot-term investments increased by 134%, this is a highly liquid cash pool • 70% decrease in long-term liabilities • Ratio Analysis • Profitability ratio’s were below the competitors averages • Receivable turnover was below competitors • Return on Assets, and Return on Investments were below competitors averages • Above all, the short term liquidity was well above the competitors looking ahead for 2011

  11. Strategic Alternatives Expand Construction • 73% of revenues come from agriculture • Already established in construction market Vertically Integrate • Current high supplier power • Current delays in procurement

  12. Strategic Alternatives Expand to Latin American • Growing Market • Developing agricultural sector Develop Bio-Fuel Technology • Bio-Fuel emerging as legitimate substitute • California Air Resource Board

  13. Strategic Decisions

  14. Recommendation Develop Bio-fuel Technology • Rapid increase in global demand for environmental efficiency • Increasing demand for bio-fuel engines globally • Improved brand image • Financial capability to undertake such a project

  15. Implementation Plan • Decide which products to develop at different times • Research and Development • Design Strategic marketing plan • Convert specific manufacturing facilities to required standards • Begin production on designated prototypes • Test prototypes for errors, safety emissions standard testing, and product efficiency • Make appropriate changes to design, possible re-test if deemed necessary • Train sales associates to market new bio-fuel products • Implement strategic marketing plan • Begin full production and Sales • Evaluate results, begin bio-fuel production on next selected products

  16. Contingency Plan

  17. Conclusion Questions or Comments?

  18. References Ashworth, W. 2011. CNH Global Drives Higher. Accessed online March 20th, 2012 <http://stocks.investopedia.com/stock- analysis/2011/CNH-Global-Drives-Higher-CNH-FIATY-FNDSF-DE-CAT-KUB- AGCO0617.aspx#axzz1q9PKI4wm> Caterpillar. 2010 Year In Review. Accessed online March 15th, 2012. Black Book - Fiat SpA & Fiat Industrial: Divide & Conquer. 2011. Fiat Industrial: Valuation. Accessed online February 12th, 2012. http://libproxy.stfx.ca/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=62293605&site=ehost-live&scope=site CNH Global N.V. 2011. Securities and Exchange Commission: Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2011. Datamonitor. 2011. CNH Global N.V. Accessed online February 13th, 2012. http://libproxy.stfx.ca/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=58657909&site=ehost-live&scope=site Deere & Company. Annual Report 2011. Accessed online March 12th, 2012. GT Nexus. 2009. CNH Logistics Operating Platform Live on GT Nexus: Agriculture and Construction Equipment Manufacturer Using On-Demand Trade and Logistics Portal to Track Global Shipments of Finished Goods and Parts. Accessed online March 13th, 2012. < http://www.gtnexus.com/press- room/press-release/120/>. Istockanalysis. 2009. CNH Rolls out Global Logistics Tracking System. Accessed online March 18th, 2012 <http://www.istockanalyst.com/article/viewiStockNews/articleid/305999>. Komatsu. Business Segment and Geographic Information. Accessed online March 20th, 2012<http://www.komatsu.com/CompanyInfo/ir/segment/>. Reuters. Financials: CNH Global NV (CNH). Accessed online March 14th, 2012. <http://www.reuters.com/finance/stocks/financialHighlights?symbol=CNH>

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