Swot Analysis on Nestle - Free Sample @Myassignmenthelp.com

Question: Discuss about theNestle for a Situation Analysis. Answer: Introduction There are times when one has to analyze how the present business strategies in a company are operating, for evaluating these one needs to begin the study with an analysis of its strategies. Initially, in such a study one first gathers information about what is the competitive approach of the company. An example of a competitive approach can be whether the firm is striving to achieve low-cost leadership techniques, efforts are being made for standing out from its rivals or competitors or concentrating on specific niches or specific group of consumers. (Frank, 1990) Today here I am choosing Nestl, headquartered in Vevey Switzerland, Australia who is the worlds prominent packaged goods and beverage manufacturer and exporter. The organization founded by Henri Nestl today can be said to be the largest manufacturer of food products in the entire world. It operates in around 197 countries with the proud owner of over 2000 brands. (Anton, 2015) For the current fiscal year, Nestl reports to be fetching revenue of around $99.09 billion with approximate sales of $92.62 billion. The entire market capitalization of the organization is $245.71 billion as reported by various researches. As a matter of fact like any other company based on the US, Nestl is not required to report its value since it is based on Switzerland. (Anton, 2015) Industrial analysis and competitive analysis both can be calculated to find out the external performance of a company. Here we will today discuss how Nestl has used its strategic situation in an external environment in a SWOT analysis to hold its market strength. (Frank, 1990) External Analysis Nestle Industry analysis- Brands dealing with food processing industry deals in transforming finished food items from its raw ingredients and giving these products a long shelf life keeping the standards for health and hygiene in place. Intense competition is faced by companies in this industry like Nestl. The company has opted for a diversified competitive strategy by spreading out and adding new products similar to what already exists. One of the primary challenges faced by the company is price enhancements of raw materials, factors like health affecting the choice of food products, allergens, growth in interest for quality ingredients. (Nestl, 2013) Market analysis- Every business encompasses the four Ps product, price, placement and promotions for its strategic marketing and so does Nestl. Nestl is proud manufacturer of varied products like beverages, dairy products, chocolates, finished products and side dishes. Prices for these products are kept depending on what the market for these individual products demand. The company faces competitive pricing and hence one can often find its prices similar to other relevant brands. Placement is also made strategically by the company in a two way channel. Their channels are well known for marketing their products and sales. A unique feature about the promotional technique followed by Nestl is its tune which is popular all over the world. (Bhasin, 2011) Competitor analysis- Primarily, Nestl has tough competition from three brands Hershey, Cadbury and Unilever. The company however has numerous competitive advantages. Firstly it leads the market and has a significant scope and scale in marketing, manufacturing and administration of its products. The R D capabilities of the company have given birth to numerous innovative products. (Dutta, 2010) Customer analysis- Consumers prefer products which provides them and engaging, emotional and outstanding experience. Nestl has partnered itself strategically with Kanjoya who are famous for enhancing customer experience based on emotions. By carefully deciphering human emotions, expressions and expectations the company has successfully launched promotional campaigns and products that touch the hearts of users worldwide. (Altherr, 2014) Macro environment Nestls macro environment can be categorized into varied ways as follows: a) Social forces/Cultural forces- Safe raw materials and safe eco-friendly techniques are opted by Nestl for producing b) Technological environment- Due to the strong technical know-how the company uses it is competitively ahead of many others. c) Economical environment- Nestl Business Cycle can be affected by the inflation happening in Pakistan as per speculations. d) Political Forces/Legal forces- Proper measures are taken by the company ensuring protection of the environment. e) Demographic environment- Nestl has each and every person on this Earth in its target consumers scope. Internal Analysis Nestle Operational Analysis There are four factors which define the strong operational success of Nestl. These are: a) Innovation and Renovation in their thought process b) Their mantra of being wherever, whenever and however. c) Their strong consumer management d) Their strength in operational efficiency. (Barnay, 1991) Financial Analysis- With excellent managerial know how Nestl improves its financial reports like no one else. The EIS or executive information system of the company gathers information from its subsidiaries and provides the top managerial executives with all financial, operations and strategic information. It thus helps the company make forecasts, sensitive analysis, simulations and optimizations and then integrate financial practices for better revenue generation. (Oggier, 2005) Product Analysis - The strength of the brands Nestl has given it a competitive edge and a position which is unparalleled in the entire globe. The company has six primary corporate brands namely- Nestl, Nescafe, Nestea, Maggi, Buitoni and Friskies. Around 70% of the total sales is generated by the summation of these products. The Nestl brand itself contributes 40% solely. The consumers all over the world chooses Nestl as their first choice of products. Swot v/s Twos SWOT analysis is a traditional yet modernized way of analysis what are the strengths, weaknesses, opportunities and threats of anything. On the other hand the TWOS methodology is a very effective way in which one combines a) internal strong points with external threats and opportunities and b) internal weak points with external threats and opportunities for developing a strategy. Swot Analysis of Nestle Understanding Strength, Weaknesses, Opportunities and Threats Strength- Nestl is a company which has the capability of leveraging on its strong brand name and generates sales by personalizing its products based on local market conditions. By the various strength in its global operations the company has set up a diversified based for revenue generation. Its strong research team keeps presenting the world with innovative products. Weaknesses- Sometimes increased launches of product instances or closely connected hampers productivity and sales. Opportunities- Nestl has successfully grabbed the opportunity of being the most prominent nutritious and wellbeing supportive company focusing on making products that aids in good health. Threats- Some of the threats faced by the company are macro-economic factors, penalty payments due to compliance problems and allegations about non ethical business operational practices. (Bar, 2004) Technically, situation analysis not only just helps understanding an organizations strategic planning but also helps know what are the various internal and external factors that helps or hinders achieving the goals and objectives of an organization. One can gather information from wide perspectives using such methodologies. (Turner 2010) References Frank, T. (1990). The Strategic Planning Management Render. Retrieved from https://www.montana.edu/brester/agbe445/readings/Firm%20Evaluation.pdf Anton, D. (2015). SWOT analysis of Nestl. Retrieved from https://pestleanalysis.com/swot-analysis-Nestl/ Nestl, (2013). Nestl Health Science. Retrieved from https://blogs.baruch.cuny.edu/mgt4880Nestl/2013/04/03/Nestl-industry-analysis/ Bhasin, H.(2011). Marketing mix of Nestl. Retrieved from https://www.marketing91.com/marketing-mix-Nestl/ Dutta, M.(2010). Competitive Advantages of Nestl. Retrieved from https://www.scribd.com/doc/46511099/Competitive-Advantages-of-Nestl Altherr, T.(2014). Customer Experience Insights and Analytics. Retrieved from https://www.kanjoya.com/news_press/kanjoya_Nestl-press_release_2-29-14.pdf Bar, D.(2004). The Future in the Food Markets. Retrieved from https://www.rodenberg.nl/publications/publications/CI-NestlvsUnilever%20v3.00.pdf Turner, P.(2010). Strategy Skills. Retrieved from https://www.free-management-ebooks.com/dldebk-pdf/fme-swot-analysis.pdf Barnay, J.(1991). Journal of Management. Retrieved from https://imba.tjufe.edu.cn/kechengxuexi/suibi/renli.pdf Oggier, C.(2005). Nestl improves its financial reporting with Management Science. Retrieved from https://www.researchgate.net/publication/220249852_Nestl_Improves_Its_Financial_Reporting_with_Management_Science