Nestle Business Strategy

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Soe Thinzar Aung

Business Strategy

Assignment I

U Kyaw Ko Ko Win

Nestle Strategic Plan  

Contents

Introduction        3

2.  Report that provides to be able to formulate a new strategy for Nestlé        3

I.        Analyzing the strategic position of Nestlé by carrying out an organization audit        3

A.        Value chain analysis of Nestlé        3

B.        Capabilities of Nestlé from Value Chain Model        5

C.        Competencies of Nestle from Value Chain Model        5

D.        Strength of Nestle        5

E.        Weakness of Nestle        6

II.        An environmental audit for Nestle        6

A.        Macro environmental audit        6

B.        Micro environmental audit (Industrial Audit)        8

C.        Findings        9

D.        Opportunities and threats of Nestlé (SWOT analysis)        10

III.        The significance of stakeholder analysis        11

IV.        A new strategy for Nestle        14

A.        SWOT matrix and Ansoff Matrix        15

B.        BCG matrix (Boston Consulting Group)        16

V.        Conclusion        18

VI.        Reference        18

Introduction

Nestle is one of the major food and beverage companies in the world. The company provides over 4,000 different brands. Nestle runs a network of 468 factories located in 86 countries. The products of Nestle are sold in 194 countries around the world. At first, Nestle has grown from a small family-owned business but it had become the world’s foremost Nutrition, Health and Wellness Company over the past 141 years, since 1867.  The headquarter of Nestlé is in Vevey, Switzerland.

2.  Report that provides to be able to formulate a new strategy for Nestlé

To get the appropriate strategy and to be the succeed strategy of Nestle; the strategy must be based on the realistic assessment of the organizational and external resources and capabilities. So, to get the effective strategy of Nestle, internal and external environment must be analyzed.

1. Analyzing the strategic position of Nestlé by carrying out an organization audit

Organization audit, internal analysis provides to recognize the strength to build on and the weakness to defeat when formulating the strategies. So, organization audit provides to make an assessment of quantity and quality of a company’s resources and capabilities, ways of building unique skills and company-specific or distinctive competencies.  Value chain analysis, capabilities and competencies analysis, after that, identify the strength and weakness of Nestle by SWOT analysis are appropriate to use as the organization audit.

1. Value chain analysis of Nestlé

The value chain analysis divides Nestlé’s activities to two major categories, primary activities and supportive activities. The primary activities are concerned with getting raw materials from suppliers (inbound logistics), production of products (operation), distributing the products (outbound logistics), and marketing and sales of Nestle and as the supportive activities are human resource development, technology development, firm infrastructure and procurement.  

Agriculture and Rural Development (Inbound logistic)

Nestle receives raw materials from thousand of farms from poorer rural regions of the world. These regions communities have lack of investment in infrastructure and it impacts on the quality and quantity of raw materials that Nestle rely on. So, Nestle provides training in order to encourage sustainable production, protect the supply and quality of its raw materials and have a positive and long-term relationship with farmers, suppliers. As supportive activities, Nestlé must focus on firm infrastructure, technology development , procurement and human resource development to make the quality control with system and skillful employees.

Manufacturing (Operation)

Nestle has 468 factories located in 86 countries.  And the products are sold in 194 countries. So, Nestle focus on the quality control of the products and increase productivities. Thus, nestle focus on the technology and giving training to the employees and staffs, human resource development as the supportive activities. Moreover, Nestle has a great research and development team to be differentiated products in the market. Nestle can get the zero waste progress and improve resource efficiency, such as water, raw materials and energy. As the supportive activities, Nestle must focus on technology development to operate with the advanced technological machines and human resource development to perform with the appropriate skillful amount of employees and firm infrastructure.

 Smarter distribution the product (outbound logistics)

More than 125, 000 tones of Nestle products are distributed to customers from factories and distribution centers every day. To make positive impact on greenhouse emissions, noise and road congestion, Nestle creates the route planning  and modify to the different modes of transportation .Moreover, Nestle reduces cost on distribution by transfer the distribution centers, switching long –distance road transporting to rail or short-sea shipping and partnership with  distribution companies to distribute the products as the foreign companies, for example,  Nestlé partners  with Myanmar Distribution Group( MDG)  to distribute its made-in-Myanmar products.  Moreover, to make the smarter distribution, Nestlé also focus in human resource development, information system, as the supportive activities.

Marketing and sales of Nestlé

Nestle make focus on brand management, communications and consumer sights as the marketing service.  Nestle make marketing with consumer focused, setting trends, pushing boundaries, innovation and renovating.  Therefore, nestle recognizes the customers’ want and can produce differentiated products such as sports nutrition products, healthcare nutrition products and pet care products. As the sales team, Nestle can handle category and shopper management, and customer relationships, route to market strategies, field sales activities and customer-facing supply chains.  Nestle must also focus on the information system, and human resource management to improve the marketing and sales of Nestle.

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