Strategic Management for Nestle in Sri Lanka

Running head: STRATEGIC MANAGEMENT
Strategic management
Name of student
Name of University
Author note

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Executive summary
The report was prepared to focus on the various aspects of strategic management
considering the business organization Nestle in Sri Lanka. The value chain represented the
various activities associated with the operations of the organization within the food and beverage
industry for delivering unmatchable value based products and services to the customers. The
Porter’s value chain analysis focused more on the systems and the inputs provided to deliver a
great output that should be provided to the end users. There were various political, economic,
social issues along with the threats posed by the new entrants in the market, substitute products
and services and even due to competitive rivalries in business. Nestle had managed to
successfully deal with these threats by maintaining a sustainable position through creation of
shared value and managing innovation to diversify the products in the market for ease access by
the customers. The international and distribution strategy implemented helped in managing a
social status, furthermore ensured global expansion by aligning with the organizational policies
and meeting the quality standards too. The Board of Directors conducted the audits and
forecasted the market conditions to become successful in the future as well. Therefore, it could
be stated that Nestle, Sri Lanka maintained a good sustainable position and achieved competitive
advantage in business.

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Table of Content
s
Portfolio 1........................................................................................................................................3
Introduction..................................................................................................................................3
Organizational vision and mission...............................................................................................3
Application of Porter’s value chain.............................................................................................4
Analysis of macro environment...................................................................................................6
Porter’s five forces.......................................................................................................................9
Conclusion.................................................................................................................................11
References......................................................................................................................................12
Portfolio 2......................................................................................................................................15
Introduction................................................................................................................................15
Assessment of strategies............................................................................................................15
Corporate governance................................................................................................................17
Nestlé’s ethical business............................................................................................................18
Conclusion.....................................................................................................................................19
References......................................................................................................................................20

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Portfolio 1
Introduction
The topic introduces the concepts of strategic management considering a popular and
well established business organization named Nestle in Sri Lanka. Nestle is considered as the
largest food and beverage company in the whole world that consists of more than 2000 brands
and are global icons and even favorites among the local people in Sri Lanka. The company offers
good quality food and beverage items including drinks that are quite popular within the market
segments and have generated good amounts of revenue in business as well (Robson 2015). The
portfolio is presented to discuss about the strategies implemented by the company to analyze the
internal and external environment and at the same time, deal with the key issues and challenges
to build a good environment for business at Nestle (nestle.lk 2018).
Organizational vision and mission
Nestle’s vision to become a leading, competitive, nutrition, health and wellness company
in Sri Lanka has helped in delivering improved value to the shareholders and work as a good
corporate citizen, effective employer as well as individuals who supplies raw materials and
resources to cater the needs of people. The vision and values also include bringing consumers the
food that are safe to consume and are of high quality to provide maximum nutrition value for
fulfilling the physiological needs of people (Cohen and Roussel 2013). The company has brought
major ingredients to enrich the taste and bring pleasure for them during consumption.
The mission of the organization is to make better food and improve the lives of people by
staying healthy and safe. The company’s mission is “Good Food, Good Life” that is apt
considering the strategies and operations managed to deliver the customers with the best quality

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and tasting food items (Jarzabkowski and Kaplan 2015). The food and beverage items provided
are nutritious choices that are consumable from the morning till late at night. The wide range of
products available makes it more convenient for the customers to make choices and fulfill their
nutritional needs by remaining safe and healthy (Hill, Jones and Schilling 2014).
Application of Porter’s value chain
The value chain framework proposed by Porter is applied for understanding the strategic
abilities and formulates processes for understanding the market conditions as well as reaches the
customers to influence their buying behaviors. The values of Nestle are reflected in the way
business is conducted and by following all the legal laws, rules, regulations and policies to
support people and the community. The chain of values of Nestlé includes the most important
business activities and support activities where the various inbound, outbound logistics,
marketing, sales, HRM activities and procurement strategies are managed to deliver products that
can provide value to the customers (Hitt and Duane Ireland 2017).

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Figure: Porter’s value chain (Hitt and Duane Ireland 2017)
The primary activities of the organization include the various business operations,
inbound and outbound logistics, marketing and sales along with services delivery. The inbound
and outbound logistics of Nestle have helped in storing the supplies and raw materials properly,
which has stabilized the relationships with the suppliers, which created convenience in
collecting, storing and distribution of products and services properly in the market (Wheelen et
al. 2017). The value chain analysis is based on the value proposition, which allows for creating
shared value and manage the supply chain activities properly through creation of value to self
assessment and monitoring the processes of manufacturing and production. It has facilitated the
marketing activities and the company has gained a sustainable position in the market to deliver
the best quality products to the customers (Armstrong et al. 2015). The inbound and outbound
logistics operations are managed by Nestle through purchase of raw materials, i.e., the coffee
from the farmers and Government agencies for controlling the coffee trade properly. After