Costs Improvement Technique in Nestle : Report

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To analyze the impact of costs improvementtechniques on the revenue of manufacturingcompany: A study on Nestle1
TABLE OF CONTENTSTABLE OF CONTENTS......................................................................................................................2CHAPTER 1: INTRODUCTION.........................................................................................................31.1 Background of the study.............................................................................................................31.2 Aims and objectives of the research...........................................................................................31.3 Research questions......................................................................................................................41.4 Rationale of the study.................................................................................................................41.5 Significance of the study............................................................................................................41.6 Dissertation structure..................................................................................................................5Conclusion........................................................................................................................................6Chapter 2: Literature review.................................................................................................................72.1 Introduction................................................................................................................................72.2 Meaning and types of cost improvement techniques..................................................................72.3 Significance of the cost improvement techniques......................................................................92.4 Impact of cost improvement techniques on firm's revenue and growth...................................102.5 To recommend ways through which Nestle can enhance its market revenue...........................112.6 Impact of cost control methods on the revenue sold................................................................112.6 Impact of cost control methods on financials of business firm................................................12Conclusion......................................................................................................................................12Chapter 3: research methodology.......................................................................................................143.1 Introduction..............................................................................................................................143.2 Research approach....................................................................................................................143.3 Research philosophy.................................................................................................................143.6 Data analysis.............................................................................................................................153.7 Ethical consideration................................................................................................................153.8 Reliability and validity.............................................................................................................16Conclusion......................................................................................................................................16chapter 4: Data analysis......................................................................................................................17Theme 1..........................................................................................................................................17Theme 2..........................................................................................................................................18Theme 3..........................................................................................................................................18Theme 4..........................................................................................................................................19Theme 5..........................................................................................................................................19Conclusion......................................................................................................................................25chapter 5: Discussion..........................................................................................................................26Conclusion......................................................................................................................................28chapter 6: CONCLUSION AND RECOMNDATION.......................................................................29references............................................................................................................................................31APPENDIX........................................................................................................................................332
ABSTRACTCost improvement methods are usually used by the firms in their business. Time to time manyresearches are conducted on cost improvement techniques. In the current research study detailanalysis of Nestle is done in respect to cost control methods and its impact on the business firm.Ratio analysis of Nestle is done in the report and it is identified that cost control methods proveeffective for the mentioned firm as it successfully maintain control on its cost. Hence, it can be saidthat if cost control methods will be implemented in proper manner at the workplace then firm willobserve positive results in its business.In order to conduct research on the Nestle secondary data iscollected from the available database. On the basis of collected secondary data literature reviewsection is prepared in the research report. Under this articles that are prepared by varied intellectualpeople are reviewed. On analysis of literature it is identified that there are varied methods of thecost control like process reengineering and EOQ etc. All these things help one in controlling variedsort of expenses in the business. Organizations can use single or multiple cost control methods atthe workplace in order to control cost in the business. In order to measure the extent to which firmcontrol its direct and indirect expenses ratio analysis is done and varied ratios are computed. Bydoing so various areas in respect to cost are evaluated in proper manner. Meaningful conclusionsare derived from ratio analysis and it is identified that varied sort of cost are controlled by thebusiness firm at its premises. Nestle in proper manner implement cost control methods at theworkplace. Thus, it can be said that prudent application of cost control method lead to strongcontrol on elevation of expenses of the business. Firm successfully control its direct and indirectexpenses. Thus, both sort of expenses are effectively controlled by the business firm. Ratio analysisis selected as method to evaluate business firm. This is done because by using ratios firmperformance in terms of cost control can be measured in better way. By using ratios firmperformance in varied areas like assets, inventory, and direct and indirect expenses control areeasily measured. Ratios results reflects the extent to which Nestle is performing its internaloperations in better way. In the current research study deductive approach is selected andinterpretivism philosophy is used. The main reason due to which mentioned philosophy used inresearch is that current research study is not scientific in nature. Deductive approach is selected forthe present study because by doing so entire research can be carried out in better way. On the basisof overall analysis of secondary data and literatures it is identified that cost control methods proveeffective for the business firms. After implementation of cost control methods at the workplacesignificant decline is observed in the operating and non-operating expenses of the business.3
CHAPTER 1: INTRODUCTION1.1 Background of the studyIn the present era, there are several companies which are facing problem in relation tomaintenance of the cost level. Moreover, cost which is incurred by the firm in relation to themanufacturing of products has high level of influence on the price and revenue. In addition to this,rising cost level also acts a barrier in the organizational growth and development (Banerjee, Hezarand Ding, 2015). Moreover, business unit can expand the business operations and functions onlywhen they have enough amount of fund or profit margin. In this, regard by using the costimprovement techniques companies can make improvement in the profit level to the large extent(McIvor, 2016). Hence, there are several techniques such Kaizen, asset utilization and performanceimprovement technique business organization can make significant improvement in the cost level.The present report is based on Nestle which is Swiss manufacturing company that offerswide range of food and beverages to the customers.This is the reason due to which it is at leadingposition in the industry(Ioannou and Sun, 2012).Mentioned firm is following a process re-engineering process in order to curtail its cost. In this regard it take help of Dematic equipmentmanagement system whose system interface is established with Nestle warehouse managementsystem. In this way in the firm USA Indiana branch cost declined by 35%(Gandhi and et.al., 2010).Such company has attained leading position in UK in terms of revenue. It offers variety of food andbeverages to the customers namely tea, coffee, snacks etc. In this, present dissertation will describethe extent to which Nestle has attained success in making improvement in cost level. In this regarddetail analysis of cost improvement methods will be done in the present study. Further, it will alsoshed light on the extent to which cost improvement techniques influence the revenue and growthlevel of firm.1.2 Aims and objectives of the researchAim of the study is to assess the impact of cost improvement technique on the revenue ofNestle.Objectives of the studyTo evaluate relevance of the cost improvement techniques available to manufacturer.To assess the significance ofnewcost improvement techniques in modern era.To determine the influence of cost improvement technique on revenue of Nestle.To recommend ways through which Nestle can enhance its market revenue.NoteThere is no need to measure financial revenue because value of same is already given in the firm4
annual report. In order to measure revenue annual reports are taken in to consideration and by usingsame ratios are computed which are compared with each other.1.3 Research questions`In order to conduct study in the right direction researcher is required to frame questionswhich are as follows:Q.1 what is the significance of cost improvement techniques in the modern era?Q.2 Is cost improvement techniques have influence on the revenue level of Nestle?Q.3 Which kind of methods used by Nestle to reduce the overall cost?1.4 Rationale of the studyThe reason behind selection of such topic is rising in the cost of manufacturing company isone of the significant issue that have high level of impact on the growth aspect of the firm (Ellis andChristofides, 2014). It is the issue because if business unit does not have enough amount of fundthen they are not able to offer high level of dividend to the shareholders. In this way, such aspecthas high level of impact on the growth and performance of the firm (Lanke, Ghodrati and Lundberg,2016). Hence, researcher conducts study on such topic by doing survey on the professionals ofNestle. In this way, research study will shed on the extent to which cost improvement techniqueshave influence on the growth and profit level of Nestle. This in turn provides Nestle and otherscholars with the effectual framework for decision making.1.5 Significance of the studyStudy which is conducted by the scholar is highly significant for the manufacturingcompanies including Nestle.This is because there is a significance of the cost control methods forthe business firms. By using cost control methods stiff control is maintained on elevation of cost.This reduce cost of production and elevate profitability for the business firm(Bhatt, S. and et.al.,2013).Nestle is selected for the present research because it is the company that produce widevariety of products that have huge demand in the general public. Mentioned firm make use of costcontrol methods at the workplace in order to control cost of production. Nestle was selected for thepresent research because by conducting research on same it can be identified the extent to whichcost control methods prove effective for the business firm.Hence, on this basis it can be said that there is a great importance of the cost control methodsfor the business firm. Moreover, outcome of this study will provide deeper insight to the firm aboutthe ways through which they can control the cost level (Agyapong-Kodua, Wahid and Weston, R.H.,2011).Moreover, cost is one of the main factors which have high level of impact on the growth andprofit margin of the manufacturing companies. Along with this, Nestle can also assess the5
effectiveness of their cost improvement techniques and thereby its impact on growth level(Sivakumar and Sundaram, 2013). Further, by taking into consideration the recommendations'scholar can improve both revenue and growth level. In this way, study and its outcome will helpcompany in building and sustaining competitive edge over others by resolving the issue ofprofitability. Along with this, other scholars will also make use of such study who are going to doinvestigation on such topic. In this way, study will offer high level benefits to Nestle and othermanufacturing companies as well as scholars.1.6 Dissertation structureChapter 1: IntroductionResearcher presents background about the extent to which cost improvement techniqueshave high level of influence the growth and revenue aspect of the companies. Besides this, in thischapter researcher also mentions the significance and rationale of the study. Further, aims andobjectives are also developed by the scholar in this section to carry out the study in an appropriatemanner. Investigator also describes the level to which such study will help other scholar andcompanies in making improvement in their performance level.Chapter 2: Literature reviewIn this, researcher develops themes by taking into consideration the research questions.Thereafter, researcher has been evaluated the findings of other scholars who have presented theirviews regarding such topic. In this, by making assessment of both positive and negative aspects ofeach research question scholar would become able to gain in-depth understanding about the topic.Chapter 3: Research MethodologyThird chapter of dissertation entails the methodology or framework which has beenundertaken by the investigator for the purpose of data collection and analysis. In this, researchermakes selection of the approach and philosophy to carry out the whole investigation in the bestpossible way.Chapter 4: Data analysis and FindingsUnder this chapter, researcher evaluates data by using the effectual tools and techniques.This section of the dissertation is highly important which renders information about the extent towhich cost improvement techniques help in enhancing the sales revenue of Nestle. In this,researcher makes use of thesis to support the findings to the large extent.Chapter 5: Conclusion and RecommendationsIn the last chapter, researcher will conclude all the findings that directly address the aimsand objectives of investigation. Further, scholar will also give recommendations to Nestle on the6
basis of findings. This in turn helps company in making improvement in both cost and revenue.ConclusionIt is concluded that detail research will be carried out on secondary data which is related to thecompany. The main of the present study is to measure the effectiveness of cost control methods inrespect to improving organization performance. In this regard ratio analysis will be done.7
CHAPTER 2: LITERATURE REVIEW2.1 IntroductionIn the present research journals and books relevant to the research study will be reviewed inthe proper manner.In the current research report main focus is given on the cost control methodsthat are adopted by the Nestle in its practice. Main focus is given on the importance that cost controlmethods have on the business firms. Apart from this impact that cost control methods have on therevenue of the business firm will also identified. In this regard primary and secondary research willbe done in the report.This will help in understanding the various cost improvement methods thatare usually used by the business firms at then workplace in order to control cost of production at theworkplace. Detail research will be done on the advantages that firms usually obtained by makinguse of the methods like just in time, total quality management and process reengineering at theworkplace. This section also enables firm to prepare thesis for conducting the data analysis moreeffectively and efficiently.To develop understanding about the several cost improvement techniques which areavailable to manufacturer.To assess the significance of cost improvement techniques in modern era.To determine the influence of cost improvement technique on revenue of Nestle.To recommend ways through which Nestle can enhance its market revenue.2.2 Meaning and types of cost improvement techniquesTypes of cost improvement methodsAccording toGoetsch and Davis (2014),improving the cost is important for everyorganization because it increases the revenue and further results in growth.Cost effectiveness of thefirm is measured by using gross profit ratio. This is because when cost of production is reduced atthe workplace a time gross profit in the business get enhanced. Thus, it is a very powerful tool thatis used to measure firm performance in terms of control on cost.There are several costimprovement techniques which can be adopted by the organization to improve the cost incurred inmanufacturing the products. In case of Nestle, the firm can adopt businessprocess re-engineeringinwhich Nestle and improve the process which is involved in manufacturing the food products(Petrinand Train, 2010).The company makes the process simpler and introduce new ways through whichthe organization can reduce the cost (Ellis and Christofides, 2014).The new process assists in improving the quality and enhancing the customer satisfaction. Asit is one of the renowned organizations and have huge finance so that they can spend money on8
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