Nestle: An In-Depth Analysis of its External and Internal Environment

Managing Strategy
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Word Count: 3792
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Table of Contents
Introduction................................................................................................................................3
Current Strategic Position..........................................................................................................4
PESTEL Analysis...................................................................................................................4
Porter’s Five Forces Analysis.................................................................................................6
VRIO Analysis........................................................................................................................7
Current Strategic Options...........................................................................................................8
TOWS Analysis......................................................................................................................8
ANSOFF Matrix.....................................................................................................................9
SAF Framework...................................................................................................................10
Contemporary Strategic Management Thinking......................................................................10
Critical Self-Reflection and Progression..................................................................................12
Gibbs Reflective Cycle.........................................................................................................12
References................................................................................................................................14
Appendix..................................................................................................................................17
Appendices 1: PESTEL Analysis.........................................................................................17
Appendices 2: Porters Five Forces Analysis........................................................................17
Appendices 3: VRIO Framework.........................................................................................18
Appendices 4: Ansoff Matrix...............................................................................................18
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Introduction
The company selected for the current report is Nestle, which is a Swiss multinational food
and drinks company with its headquarters in Vaud. It is one of the biggest publicly held food
companies in the global market as per its revenue. The organisation manufactures a
significant number of products including baby food, breakfast cereals, medical food, pet food,
dairy products, and frozen foods among others. There is a massive array of brands that
operate under Nestle such as Vittel, Nespresso, Kit Kat, and Maggi among others. The net
sales of Nestle amount to more than $93 billion and its employees more than 276,000 around
the world (Statista, 2022). However, Nestle has also been the subject of a large number of
controversies and criticism along with boycotts from customers related to its marketing
formula of using baby formulae rather than breastfeeding in developing countries.
Furthermore, its promotion of bottled water and child labour in cocoa production has also
been a subject of major controversies and criticism.
Fig: Financial figures of 10 selected FMCG companies worldwide 2021; Statista, (2022)
The report in this regard will primarily conduct an external and internal analysis of Nestle
and will discuss the impact of different factors on its business operations such as legal
aspects, which resulted in banning its product 'Maggi' in India. The report will also conduct a
TOWS analysis and will find that one of the major strengths of Nestle comes in the form of
global presence and diversification of products. The three major strategies that the report will
suggest for the future are sustainability, e-commerce, and venturing with small-food start-ups.
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Current Strategic Position
PESTEL Analysis
Political factors
The aspect of political factors impacting the operations of international organisations has
enhanced significantly. Nestle operates in more than 190 countries and hence, political factors
prove to be an important phenomenon that impacts their work such as trade policies,
government rules towards sustainability, and trade barriers among others. The growing
tension in the international landscape has also managed to impact the operations of Nestle.
The US is one of the biggest markets of the company, however, their focus towards Asian-
pacific countries such as China has also enhanced significantly (Statista, 2022). However, the
trade relationship between China and the US has been in disarray and it has negatively
impacted the working of the organisation. Though, India is one such country that has
attracted the organisation through its policies in which lower tax rates and other benefits were
provided to attract the organisation to invest in forms of new factories and stores all around
the country.
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