Assignement Of Strategic Management

Reort On:

Submitted To: Sir. Dr. Asif Submitted By: Muhammad Nayab Gul Faheem Asghar MBA-D 1135118 1125110

Introduntion
...the world's leading nutrition, health and wellness company. Our mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. We believe that leadership is about behaviour, and we recognise that trust is earned over a long period of time by consistently delivering on our promises. Nestl believes that it is only possible to create long-term sustainable value for our shareholders if our behaviour, strategies and operations also create value for the communities where we operate, for our business partners and of course, for our consumers. We call this 'creating shared value'. The Nestl Corporate Business Principles are at the basis of our companys culture, developed over 140 years, which reflects the ideas of fairness, honesty and long-term thinking. Nestl can trace its origins back to 1866, when the first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company. One year later, Henri Nestl, a trained pharmacist, launched one of the worlds first prepared infant cereals Farine lacte in Vevey, Switzerland. The two companies merged in 1905 to become the Nestl you know today, with headquarters still based in the Swiss town of Vevey. We employ around 280 000 people and have factories or operations in almost every country in the world. Nestl sales for 2010 were almost CHF 110 bn.

Strategies

Strengths, Weaknesses, Opportunities and Threats (SWOT)

TYPE OF FACTOR Location of Factor Favorable Unfavorable

Strengths Ability to leverage strong brand name to generate sales Ability to customize products to the local market conditions Strong global operations with diversified revenue base Research and development capabilities

Weaknesses

Internal

y y y y

y Increasing instances of product recalls

hampering brand equity

Opportunities Transition to a 'nutrition and well-being' company Focus on developing and emerging Economies Booming out of home eating market

Threats

External

y y y

y Compliance issue resulting in penalty

payments

y Macro economic factors y Allegations of unethical business activities

Strengths 1. Nestle logo is a significant part of the corpoarations corporate identity. The Nestle brand itself has participated key role int the corporations globalization efforts. 2. Nestle is the biggest consumer packaged goods corpoartion in the world and pioneer of many healthy procudts. 3. One of the most impertant strengths of the Nestle is its strong culture and human resource. Every one give emphasis to its internal growth, have cooitted to achieve higher volumes with strong R&D by refurbishing existing brands and innovating new ones. 4. Nestle fuctions in 86 countries all over the world and has nearly 283000 employees. 5. It is one of the oldest and most profitable corporations in the world and market leader in different brands. 6. Nestle is the worlds biggest ice cream product with a 17.5% market share. 7. Nestle has 6000 brands or products with a wide range of divesdfied and related diversified products across a number of markets. 8. Since the existence of nestle it is known for honesty intergrity full compliance with all applicable laws all applicable laws and fair dealing.

Weaknesses Nestle has some divisions which are successful in some countries and unsuccessful in other ones. This may be the result of less coordination between centre and divisions. Some products are positioned victimized and not understandable to consumer in many countries. It has extremely diversified portfolio due to which some divisions get lesser time than others. Nestle has complex supply chain management and the major problem for Nestle India is traceability. The split nature of the Indian market place obscures things more. Russia has been a very unstable market for Nestle. The general performance of nestle often obtains a hit due to this factor.

Opportunities 1. In South Asian countries such as India Paksitan Bangladesh majorities of the consumer are priceconscious rather than health concious. Similarly they have also higher birth rate. Nestle have to focus ont that segment too. 2. Currently the world is recovering from the worst economic recession therfore demand for the various products of Nestle will increase due to increase in the income of consumers. 3. Now day s consumer have become health concious. Therefore it is an important opportunity for nestle to come up with variety of health based products. 4. Thirty percent of the countries are developed and 70% are developing and have higher GDP. Nestle must have to focus on them.

Theats 1. Competition in consumer packaged goods is increasing due to global as well as local players. 2. Local players in many countries are also adapting latest technology to produce healthy products. 3. Devaluation of currencies against dollar can decrease the demand for nestle products. For example devaluation of the Pak rupee against dollar has increase the prices of the products in Pakistan by almost 60%. 4. Several markets nestle is entering are already mature. Poverty and food sercurity is increasing. 5. Developing countries are facing double burden such as: malnutrition and obesity.

Product Portfolio

Nestle BCG Matrix

H H i g
y y

g h

STARS
Bottled Water Drinks y y

QUESTION MARKS
Cereals Ice cream

Business Growth Rate

h CASH COWS L o w
y y Baby Foods Dairy y y y Healthcare nutrition Petcare Weight management

DOGS

Market Share

STARS The stars are the high relative market share and high market growth. Nestle beverages i.e. are somewhat the stars in their business, because with the high quality and new designs which comes every now and then makes them more popular among the customers, because customer with upper class wants the quality and nestle offers the best quality food items. CASH COWS The cash cows are their baby food items i.e. nestle cerelace and other baby food products. Company has to take measures to make these products as stars. DOGS The pharmaceutical products are nestle Dog, because it has low-share business with low growth market especially when we talk about Pakistani market. The company has to think on what it can do by improving the low share and growth market. QUESTION MARKS The question marks are the breakfast cereals. They have high market growth but low market share. The company has to decide about which question mark they should try to build into the stars and which one of these should be phased out.

RECOMMENDATION
y y y y y y y There are few r ecommendations t hat are r ecommended if the pr oject is to be conduct ed again infuture. Employees should be trained according to the changing standards of the organization. Company should conduct survey fr om time to time t o accor ding t o which changes ca n beintroduced in the organization to stay updated in the market. They should intr oduce creativit y into the work, so that the employees ca n do t heir wor k active mindedly. Employees should be given compensation in order to keep them loyal. Employees should be more involved in decision making to become more differentiated. Company should provide incentives to shop keepers.