Presented to:Prof. JAYANT BOSE

Internal Analysis: Assessing Strengths and Weaknesses

Strategic Management

INTRODUCTIONINTRODUCTION

Nestlé is aSwiss company,founded in 1866by Henri Nestle.

Brands of Nestle…

Did you know …

Nestlé markets its products in 130 countries across the world

Nestlé manufactures around 10000 different products and employs some 250000 people

Nestlé sells over a billion products everyday

People, products,brands

What makes Nestlé the world’s largest food

companyare the millions of

consumers across the globe who

put their trust in its products, bite after

bite, sip aftersip, day after day.

a subsidiary of Nestle S.A. of Switzerland

Incepted in 1962

manufactures a variety of food products such as infant food, milk products, beverages, prepared dishes & cooking aids, and chocolates & confectionary

Presently the world's largest and most diversified food company

Nestle India

Being the best in everything they touch & handle

VISION

Continuously excel to achieve and maintain leadership position in the chosen businesses; and delight all stakeholders by making economic value additions in all corporate functions

MISSION

A pool of qualified suppliers that understand and support Nestlé’s commitment to excellence.

A pool of qualified suppliers that are directly aligned with underrepresented and emerging communities and can promote positive relationships with our customers

Better quality goods and services at a lower price as a result of increased competition and an extended supply base

Access to new capabilities and innovations A competitive advantage as we seek government

contracts, and assurance that we are in compliance with the diversity expectations of our public sector contracts.

Competitive advantages

Major Competitors

AMUL

BRU

CADBURY

The Internal Assessment

Nestlé describes itself as a food, nutrition, health, and wellness company. Recently they created Nestlé Nutrition, a global business organization designed to strengthen the focus on their core nutrition business. They believe strengthening their leadership in this market is the key element of their corporate strategy.

In order to reinforce their competitive advantage in this area, Nestlé created Nestlé Nutrition as an autonomous global business unit within the organization, and charged it with the operational and profit and loss responsibility for the claim-based business of Infant Nutrition, HealthCare Nutrition, and Performance Nutrition.

The Corporate Wellness Unit was designed to integrate nutritional value-added in their food and beverage businesses. This unit is responsible for coordinating horizontal, cross-business projects that address current customer concerns as well as anticipating future consumer trends.

Nestlé’s competitive strategies are associated mainly with foreign direct investment in dairy and other food businesses. Nestlé aims to balance sales between low risk but low growth countries of the developed world and high risk and potentially high growth markets of Africa and Latin America.

When operating in a developed market, Nestlé strives to grow and gain economies of scale through foreign direct investment in big companies.In the developing markets, Nestlé grows by manipulating ingredients or processing technology for local conditions, and employ the appropriate brand.

Another strategy that has been successful for Nestlé involves striking strategic partnerships with other large companies. In the early 1990s, Nestlé entered into an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca Cola’s worldwide bottling system and expertise in prepared beverages.

In Asia, Nestlé’s strategy hasbeen to acquire local companies in order to form a group of autonomous regional managers who know more about the culture of the local markets than Americans or Europeans.Nestlé’s strong cash flow and comfortable debt-equity ratio leave it with ample muscle for takeovers.

Marketing

Target Market Male and Female;

Have many brands and products to meat the taste of each

type of consumers.

Have high allocation of advertising budget for endorser

contract, TVC, print ads, and sponsorship activities.

Have top endorsers who have a good image in the soap

industry.

Distribution

Nestle has worldwide distribution line

Nestle has good distribution line to retailer

Nestle has new ordering system, named Futures Ordering

Program

strong support from its parent company the world’s largest processed food and

beverage company a presence in almost every country strong brands like Nescafe, Maggi and

Cerelac continuously introducing new products for

its Indian patrons on a frequent basis, thus expanding its product offerings

STRENGTHS

complex supply chain managementWEAKNESSES

Expansion- potential to expand to smaller towns and other geographies

Product offerings- The company has the option to expand its product folio by introducing more brands

Global hub- Cheaper manufacturing facility at India than in other parts of the world

 OPPORTUNITIES

Competition- immense competition from the organised as well as the unorganised sectors

Changing consumer trends- increased consumer spendings on consumer durables resulting in lower spendings on FMCG products

Sectoral woes- Rising prices of raw materials and fuels, and inturn, increasing packaging and manufacturing costs

Special thanks from: NIKHIL MUNJAL(43) AMIT KUMAR GUPTA(08) RACHIT KHANNA(59) SHYAM TRIVEDI( )