A Study on Nestle: Cost Improvement and Revenue Impact

This report analyzes the impact of cost improvement techniques on the revenue and growth of Nestle, a leading food and beverage company. The study aims to identify the influence of cost improvement techniques, assess their significance, and determine effective strategies adopted by Nestle to reduce costs and enhance market revenue. The research employs a descriptive research design, utilizing both primary and secondary data through questionnaires and literature review. It examines various cost reduction methods such as just-in-time, target costing, and benchmarking, and their effects on Nestle's profitability, competitive advantage, and overall business performance. The report investigates specific business challenges, including increasing competition and higher production costs, and offers recommendations for improving Nestle's financial outcomes and market position. The findings suggest that cost improvement techniques significantly impact Nestle's revenue and growth, enabling the company to enhance profit margins and gain a competitive edge.

To analyse the impact of costs improvement
techniques on the revenue or growth of the
company – A study on Nestle

TABLE OF CONTENTS
Part a................................................................................................................................................3
1.0 title OF PROJECT.....................................................................................................................3
2.0 TERMS OF REFERENCES......................................................................................................3
2.1 Purpose...................................................................................................................................3
2.2 Methods.................................................................................................................................3
Type of investigation...................................................................................................................3
Research design...........................................................................................................................4
Research approach.......................................................................................................................4
Data collection.............................................................................................................................4
Primary and secondary data.........................................................................................................4
Primary data................................................................................................................................4
Primary data.................................................................................................................................5
Sampling......................................................................................................................................5
2.3 Expected outcome..................................................................................................................5
PART B............................................................................................................................................6
1.0 Title of project............................................................................................................................6
2.0 Background and context............................................................................................................6
2.1 General business content of problem.....................................................................................6
2.2 Specific business content of problem ...................................................................................6
references.........................................................................................................................................8
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PART A
1.0 TITLE OF PROJECT
To analyze the impact of costs improvement technique on the revenue or growth of the
company: A study on Nestle
Research aim and objectives
Aim: To identify the impact of costs improvement technique on the revenue or growth of the
company
Objectives
 To assess the significance of cost improvement techniques in modern era
 To determine the influence of cost improvement technique on revenue of Nestle
 To identify the effective ways adopted by Nestle to reduce overall cost
 To recommend ways through which Nestle can enhance its market revenue
2.0 TERMS OF REFERENCES
2.1 Purpose
The main purpose of the present research is to determine the impact of cost improvement
technique on revenue or growth of the business. Further, for conducting research Nestle has been
chosen as one of the organization which is considered as leader in the food and beverage
industry. Reducing overall cost has become necessary for the business and this has become
possible through adoption of various tools by business. Cost reduction increases profit margin
and in turn provides growth opportunities to company in the market where operations are being
carried out. Apart from this, it allows firm to become leader in the market.
2.2 Methods
Research methodology is the most important part of study which consists of different
procedure to complete the study effectively (Crowther and Lancaster, 2012). Here, following
methodology are used to accomplish research aim and objectives-
Type of investigation
There are two types of research investigations such as qualitative and quantitative.
Present study will be based on qualitative and quantitative type of investigation where research
will shed light on theoretical aspect (Fiegen, 2010). By using qualitative type of investigation
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research will gather huge amount of information pertaining to study so as to fulfill purpose of
current investigation (Modell and Humphrey, 2008). In addition to this, quantitative techniques
will be applied through frequency table while doing data analysis.
Research design
There are several research design such as exploratory, explanatory and descriptive. The
current study will be based on descriptive research design wherein researcher will focus upon
population being studied (Grafton, Lillis and Mahama, 2011). It will enables scholar to present
the outcome of study in right manner in order to clarify readers regarding research outcome.
Research approach
Basic research approaches are deductive and inductive where the former on begins with
specific observation. However, present study will be based on inductive research approach which
starts with generalization of topic and then researcher move towards general aspect (Graham,
Davey, Evans and Toon, 2012). It proves to be effective in collecting enough information for
meeting aim of the study.
Data collection
There are two types of data collected for research such as primary and secondary. Current
investigation will also use both primary and secondary research. On the other hand, secondary
data will be collected through journals, books, newspaper and online articles.
Objective 1: To assess the significance of cost improvement techniques in modern era
Primary and secondary data
For meeting objective one both primary and secondary data will be required. Owing to
this, primary data will be collected from journals and online articles. Furthermore, questionnaire
method will be used for gathering primary information thereby respondents will provide
information related to significance of cost improvement techniques.
Objective 2:To determine the influence of cost improvement technique on revenue of Nestle
Primary data
For collecting primary data questionnaire will be developed wherein views of
respondents will be taken in influence of cost improvement techniques of select organization
(Jackson, 2010).
Objective 3: To identify the effective ways adopted by Nestle to reduce overall cost
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Primary data
Third objectives will be fulfilled through collection of primary information from targeted
population. At this juncture, respondents will provide detail information related to different ways
for reducing cost of production for selected corporation.
Sampling
Sampling is process of selecting targeted population for research. Basically probability
and non-probability sampling techniques are used. The current research will apply non-
probability sampling because of selection of managers for providing data (Johnson and
Christensen, 2010). In this regard, 5 managers will be selected on the basis of purposive
sampling. This will assists researcher to gather in-depth information regarding cost improvement
tools employed by Nestle through which revenue of company increases.
2.3 Expected outcome
From the entire study it is expected to find out that Nestle has employed different cost
improvement tools through which business is growing in the market (Kayed, 2012). Further,
through adoption of different tools it is possible to enhance profit margin and in turn it allows
business in gaining competitive advantage.
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PART B
1.0 TITLE OF PROJECT
To analyze the impact of costs improvement technique on the revenue or growth of the
company: A study on Nestle
2.0 BACKGROUND AND CONTEXT
Nestle is Swiss transnational food and beverage company. Nestle, the UK based
corporation considered largest food company in the world in term of revenue. It provides
services and products across the world through franchising and different other corporate
strategies. The product range includes by organization are; coffee, baby food,confectionery and
bottled water as well as ice cream and many more (Nestle, 2016). Furthermore, it consists of
different products such as baby food, medical food and coffee as well as tea. Similarly, frozen,
pet foods and snacks are offered by organization. Its 29 brands has sales turnover of 1.1 billion
US dollar. These major brand consists of Vittel, Maggi, Kit Kat and Smarties. At present
company has 447 factories with 194 countries. Also, Nestle is one of the main shareholders of
world's largest cosmetic company, L'Oreal.
2.1 General business context of problem
Higher cost of production is the critical issues in retail sector and several other sectors. It
affect operation of firm by lowering down overall profitability. This aspect create need to revise
cost strategies for enhance overall rate of return. Similarly, higher cost of production has direct
impact on competitive edge of the firm as it become unable to meet expectations of buyers
related to low price strategy.
2.2 Specific business content of problem
The increasing competition in retail sector affect operation of Nestle which has direct
impact on its consistent growth. The scenario of higher cost of production lower down overall
revenuer of Nestle. Owing to this, current study will be conducted to address issues by studying
different techniques of cost reduction. It proves to be effective in enhancing overall rate of return
for company.
2.3 Purpose of proposed study
2.3.2 Research question
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What is the impact of costs improvement technique on the revenue or growth of the Nestle
2.3.1 Research aim
To identify the impact of costs improvement technique on the revenue or growth of the company
2.3.3 Subsidiary research questions
▪ What is the significance of cost improvement techniques in modern era?
 What is the influence of cost improvement technique on revenue of Nestle?
 What are different ways to reduce overall cost for Nestle?
 What are different suggestions to enhance market revenue of Nestle?
SMART research objectives (Qualitative research)
 To assess the significance of cost improvement techniques in modern era till 2016
SMART research objectives (Quantitative research)
 To determine the influence of cost improvement technique on revenue of Nestle in 2016
 To identify the effective ways adopted by Nestle to reduce overall cost to 20%
 To recommend ways through which Nestle can enhance its market revenue to 25%
2.4 Significance of proposed study
The current study on identifying the impact of costs improvement technique on the
revenue or growth is significant. This is because cost structure of any organization has direct
impact on growth and performance of business. It will help management to resolve issues related
to lower profitability. Not only this but current study will also be helpful in creating competitive
edge of retail organization and ensure their long run expansion with implementation of cost
effective strategies.
3.0 LITERATURE REVIEW
Significance of cost improvement techniques in modern era
Cost reduction strategies or techniques are very important for corporations. This aspect
tends to support corporation by increasing overall rate of return. According to Andersen,
Samset and Welde (2016) low cost of production provide chance to organization for improving
performance of employees. This is because company can easily focus on motivation of personnel
by offering them good reward. At the same time, in modern era cost improvement techniques
prove to be effective for retention of workforce as well as customers. This is because if cost of
production will be reduced then company become able to lower done price charged.
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Boussabaine, Sliteen and Catarina (2012) asserted that implementation of cost improvement
techniques gives upward trend.
Influence of cost improvement technique on revenue of Nestle
The cost improvement techniques has direct impact on revenue of Nestle as it tends to
affect profitability of firm to a great extent. For example, just in time is effective method for
reducing additional expenditure (Broughton and et. al., 2013). It will have direct impact on
corporation's overall rate of return and initial investment of firm will be recovered relatively in
short time span. Furthermore, management audit is another effective method whereby
organization directly interact with internal environment or managers which proves to be effective
in finding appropriate solution for business. For instance, if organization uses low cost strategy
then drastic changes will be seen in sales turnover.
Effective ways adopted by Nestle to reduce overall cost
According to Mandal (2012) there are number of techniques of cost reduction such as just
in time, target costing and life cycle costing. Along with that, Kaizen costing as well as activity
based management are some of the most effective strategies which leads to control cost. Here,
just in time is effective method through which organization keep control over inventory. This
aspect help management in reducing cost incur on storage of raw material. This is because most
of the time issues related to purchase proves to be costly. Especially perishable items create more
cost for organization because of delay use of products and services (Au-Yong, Ali and Ahmad,
2014). On the other hand, Bench marketing is most effective method where company set target
for future cost and accordingly balance is brought for accomplishment of long as well as short
term objectives.
4.0 METHODOLOGY
4.1 Introduction
Research methodology is very important in any study because it facilitates scholar to
conduct study in an appropriate manner (Crowther and Lancaster, 2012). It consists of different
methodologies like research design, sampling and data collection methods. These are explained
as follows-
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4.2 Research design
Research design is helpful in presenting layout of overall report. The present research of
impact costs improvement technique on the revenue or growth of the company will be based on
descriptive research design. It assists scholar to gather large amount of information for meeting
research aim and objectives. Apart from this, rationale behind selecting descriptive research
design is to give explanation regarding population being studied (Brønn, 2012). It will enable
scholar to present the outcome of research in an effective manner. It will be fruitful for collection
of primary data also thereby researcher can easily elaborate importance of financial planning and
franchising in reducing financial hindrances.
4.3 Data collection, analysis and presentation of results
Data collection is another important aspect of study which basically consists primary and
secondary data (Fiegen, 2010). The current research will be based on both primary and
secondary data.
4.3.1 Objective 1: To assess the significance of cost improvement techniques in modern era
4.3.1.1 Secondary data
Secondary data will be emphasized more for gathering information related to objective
one.
4.3.1.1.1 Data collection
For collection of secondary data different sources like journals, books and online article
will be referred.
4.3.1.1.2 Data analysis
For analysis of both primary and secondary data research will use frequency table and
thematic analysis. Hence, researcher will be using both of qualitative and quantitative data
analysis method.
4.3.1.1.3 Presentation of results
The collected data will be presented with the along with themes prepared in accordance
with research questions. Here, detail explanation will be given in the light of research aim and
objectives.
4.3.1.2 Primary data
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For meeting objective one both primary and secondary data will be required. For this
purpose questionnaire method will be used for gathering primary information thereby
respondents will provide information related to significance of cost improvement techniques
(Grafton, Lillis and Mahama, 2011).
4.3.1.2.1 Data collection
Questionnaire method will be used and distributed among respondents.
4.3.1.2.2 Population
All managers of Nestle will be considered as population for the study.
4.3.1.2.3 Sampling
Purposive sampling will be used for selecting five managers of select corporation.
4.3.1.2.4 Ethics
Confidentiality aspect will be considered and respondents will not be forced to participate
in study.
4.3.1.2.5 Data analysis
For analysis of primary data thematic analysis will be used.
4.3.1.2.6 Presentation of results
For presenting results frequency tables will be used showing percentage of responses.
4.3.2Objective 2:To determine the influence of cost improvement technique on revenue of
Nestle
4.3.2.1 Primary data
Collection of primary data for fulfilling research objectives will be ensured through
questionnaire method (Jackson, 2010).
4.3.2.2.1 Data collection
Questionnaire method will be applied for gathering primary information.
4.3.2.2.2 Population
Managers working in Nestle will be taken into account as population.
4.3.2.2.3 Sampling
Sample size will be kept 5 for gathering primary information. The methodology use for
sampling is purposive (non-probability).
4.3.2.2.4 Ethics
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All primary information will be removed after fulfilment of research aim and objectives.
4.3.2.2.5 Data analysis
The collected data will be analysed by thematic analysis wherein themes of each research
questions lies under second objectives will be presented (Kayed, 2012). It supports researcher in
drawing valid outcome.
4.3.2.2.6 Presentation of results
Tables will be presented along with different themes.
4.3.3 Objective 3: To identify the effective ways adopted by Nestle to reduce overall cost
4.3.3.1Primary data
The reason behind selecting primary data is to collect information from managers of
Nestle regarding different ways to reduce cost.
4.3.3.1.1 Data analysis
Third objectives will be fulfilled through collection of primary information from targeted
population (Modell and Humphrey, 2008).
4.3.3.1.2 Population
The population for study will be all managers working in different branches of Nestle.
These all people will be considered as population from which sample will be selected by
research for reaching at aim.
4.3.3.1.3 Sampling
Sampling refers to individual unit of population. The preset study will be based on non-
probability sampling because of selection of 5 managers from Nestle. Owing to this, purposive
sampling will be used for collecting appropriate information from respondents.
4.3.3.1.4 Research participant protection
The participants of study will be provided protection by storing their information with
confidentiality (Modell and Humphrey, 2008). No any third party will be provided personal
information of respondents. Similarly, managers of corporation will be communicated aim of the
study.
4.3.3.1.5 Data analysis
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The collected data for fulfilling third research objectives will be analysed with the help of
thematic analysis. Under this, specified themes will be explained in the light of relevant research
questions.
4.3.3.1.6 Presentation of results
The presentation of results will be done through frequency table and themes prepared.
5.0 PROJECT MANAGEMENT
5.1 Timing of major project event and process
The major project events consists of following activities. It depicts that proposal will be
required total 2 weeks whereas data analysis process will also be completed in the same time
frame-
Activities/time
1st
Wee
k
2nd
Week
3rd
&
4th
Wee
k
5th
&
6th
We
ek
7th
Wee
k
8th
Wee
k
9th
Wee
k
10th
Wee
k
11th
Week
12th
Wee
k
Research
Proposal
Research
Specification
Collecting
primary data
Secondary Data
collection
Interpretation of
collected data
Data Analysis
Conclusion and
Recommendation
s
Final Submission
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