Case Study on Nestlé Assignment

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Strategic Review Report – Nestlé
A Report by
M. Ahamed Afridi
(SAB/BSc/2017/B/01)
Course: MGT 30625 Strategic Management
Prof. Bandara Wanninayake
Year III Semester I
School of Accounting and Business
The Institute of Chartered Accountants of Sri Lanka
3rd of July 2021

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Acknowledgement
At the successful completion of this report, I would like to thank the people that supported me
throughout while giving immense courage.
First, I would like to express my sincere gratitude to our Strategic management lecturer Dr.
Bandara Wanninayake who gave us the valuable opportunity of working on this report. His
guidance, support, instructions, and suggestions were the major influence behind the successful
completion of this report.
Next, I would like to thank my family and friends who helped me with their knowledge, and
provided moral support.
Finally, I would like to say that I have gained valuable knowledge during this process of
completing this report and would really like to thank everyone once again.

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Table of Contents 1. Abstract ................................................................................................................................................ 5
2. Introduction ......................................................................................................................................... 6
3. Internal Capability Analysis by Using Resource-Based View Strategy ......................................... 7
3.1 Threshold capabilities of Nestlé .......................................................................................................... 7
Threshold resources .............................................................................................................................. 7
Threshold competencies ........................................................................................................................ 7
3.2 Unique Capabilities of Nestlé ............................................................................................................. 7
Unique resources ................................................................................................................................... 7
Core competencies ................................................................................................................................ 8
4. Value Chain Model ............................................................................................................................. 9
4.1 Primary activities in Nestlé Value Chain ............................................................................................ 9
4.1.1 Inbound logistics ........................................................................................................................ 9
4.1.2 Operations .................................................................................................................................. 9
4.1.3 Outbound Logistics .................................................................................................................. 10
4.1.4 Sales and Marketing ................................................................................................................ 10
4.1.5 After Sales (Services) ............................................................................................................... 10
4.2 Supporting Activities ........................................................................................................................ 11
4.2.1 Procurement ............................................................................................................................. 11
4.2.2 Infrastructure ........................................................................................................................... 11
4.2.3 Technology ................................................................................................................................ 11
4.2.4 Human Resource ...................................................................................................................... 11
5. External Environment Analysis ....................................................................................................... 12
5.1 Political Environment ....................................................................................................................... 12
5.2 Economic Environment .................................................................................................................... 12
5.3 Socio – Cultural Environment........................................................................................................... 13
5.4 Technological Environment .............................................................................................................. 13
5.5 Demographic Environment ............................................................................................................... 14
5.6 Natural Environment ......................................................................................................................... 14
6. Industry Analysis Based On 5 Forces Model .................................................................................. 15
6.1 Porter's Five Forces Analysis ......................................................................................................... 15
6.1.1 Threat of New Entrants - Low ................................................................................................... 15

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6.1.2 Threat of Substitute - High ......................................................................................................... 15
6.1.3 Competitive Rivalry - High ........................................................................................................ 15
6.1.4 Bargaining Power of Buyers - High ........................................................................................... 16
6.1.5 Bargaining Power of Supplier - Low ......................................................................................... 16
7. Conclusion ......................................................................................................................................... 17
References .................................................................................................................................................. 18