MGMT1101: Research & Analysis Paper on Nestle Canada's Management

This report provides a comprehensive analysis of Nestle Canada's management practices, aligning with the MGMT1101 course requirements. It begins with an overview of the organization, including its customer base, mission, vision, and core values. The report then delves into corporate-level strategies, examining growth and retrenchment strategies, and business-level strategies, including low-cost leadership and differentiation. A detailed SWOT analysis is presented, highlighting the company's strengths, weaknesses, opportunities, and threats. The report also examines the company's research and development capabilities, geographic presence, and brand portfolio. It also addresses the criticisms regarding water usage and child labor, contaminated food recalls, and competitive threats. The analysis incorporates relevant references to support the findings and conclusions, offering a well-structured examination of Nestle Canada's strategic management.

Introduction to management

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Table of Contents
Summary of organization................................................................................................................1
Customer Base.................................................................................................................................1
Mission and Core Values.................................................................................................................2
Vision...............................................................................................................................................2
Corporate level strategies................................................................................................................3
 Growth strategies..................................................................................................................3
 Retrenchment strategies........................................................................................................3
Business level strategies..................................................................................................................3
 Low cost leadership strategy................................................................................................3
 Differentiation strategy.........................................................................................................4
SWOT ANALYSIS.........................................................................................................................4
Strength........................................................................................................................................4
Weakness.....................................................................................................................................5
Opportunities................................................................................................................................5
Threats..........................................................................................................................................6
References........................................................................................................................................7
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Summary of organization
Nestle is the biggest company in food and beverage sector It offers 2000 more brands on
the global network and the presence is more than 190 countries. In 1867, Pharmacist Henri
Nestle created the famous infant food in Vevey, Switzerland. In 1918, the company purchased
the first Canadian milk plant in Chester-ville and started the activities as the Maple leaf
condensed milk company. In 1922, Nestle Canada is originated officially. In 2012, company
acquired PFIZER nutrition which is Canada consist of Materna as pre and post natal
multivitamins (Nestle, 2019).
Nestle purpose is to boost standard of living by contributing towards positive lifestyle.
The company employs approximately 3,500 workers in 20 manufacturing, sales and distribution
sites on the global platform. In 2014, the annual sales of the company were $2.3 Billion. There
are many products that are offered by the company such as favorite chocolate bars such as Kit
Kat, Coffee crisp and Aero. There are also boxed chocolates such as turtles, after eight and also
Quality Street. In the Coffee and beverages the products that are provided in the market are
Coffee mate, Nestle iced tea and Nescafe Dolce Gusto. In 189 countries, the Nestle is present
and covers a large market area. The popular products of the company are Milo, Maggi and Kit
Kat. The value of the company relates with the principles in which the company acts legally and
honestly (Nestle, 2019).
Customer Base
It has been observed that Nestle Canada offers the products for all the age groups such as
from kids to old age people. From lower class to middle class the people are targeted as it helps
in boosting the sales of the products and services among the customers. The targeting is done by
the company on the basis of the products provided to the customers in the market (Nestle, 2019).
For Nescafe, the major target has been the youth mainly the people who are studying in
the universities. Also, one of the examples is of tea in which the target market is from 6 year old
kid to 70 year old age group individuals. By examining the present scenario, there is a strategic
mindset at Nestle with the products being targeted towards the masses. Now the target of the
company has shifted from the young kids to adult to everyone. Therefore, it can be said that the
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company has targeted the people of all age groups as the products are provided to satisfy the
needs from Kids to old age individual (Nestle, 2019).
Mission and Core Values
The mission statement of Nestle Canada is related to the concept of “Good Food, Good
life”. The mission is to offer the customers with the good taste and also most nutritious range of
food and beverages is provided to the customers in different categories. The purpose of the
company is to maintain the living standards of the people and also to focus on creating a good
life. It can be examined that Nestle Canada also enhances the quality of life by contributing
towards the healthier future. The company tries to make a positive difference in relation to the
individuals, communities and planet. The corporate culture of the company is maintained by
offering rewards and development programs to attain the individual and business goals. This has
driven the overall alignment in a clear way and also ensured that the workers are aware of the
overall working structure (Nestle, 2019).
The corporate culture of the company has the open door policy in which the workers are
encouraged to speak in an open manner with their higher authorities about the overall
development plans. The core values of the company is concerned with biggest, Nutrition, Health
and Wellness offering enhancement in the overall value of the shareholder by giving preference
to the corporate citizen, preferred suppliers and employers ( Nestle, 2019).
Vision
The individuals have proper understanding that only food is considered as the source of
nourishment and satisfaction and the choice in relation to food can affect the overall quality of
the living standards that affect the lives of the people. The Vision is to provide quality products
so that it could enhance the living standards of the people. To improve the standard of living, the
company has set up the biggest private food and nutrition company that involves 5000
individuals located in 30 R&D facilities on the global platform (Nestle, 2019).
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Corporate level strategies Growth strategies
It has been examined that Nestle Canada is largest companies in food and beverage
sector. It has enhanced its functional activities in 130 counties with more than 500 production
units. To manage the entire operations there are many business associates, investors and partners.
Nestle has grabbed the large market area in the different area network. The recent strategies
related to growth are divided into the horizontal growth and also in vertical growth strategies.
The Horizontal strategy related to growth help in enhancing the business activities across the
target network, geographical locations and also brand extensions. The vertical growth strategies
boosted the overall activities by focusing on improving the supply chain, distribution and also in
promotional activities. Nestle also considers diversification strategy to enhance the range of
portfolio products and to compete with the competitors (Galalae & George, 2017). Retrenchment strategies
The company focuses on the retrenchment strategies as it helps in ridding with the low
services and products, performance and also with different units that are not emphasizing on the
success ratio. The company is also attaining the large market share from marketing budget, R&D
efforts and also focusing on managing the quality.
Business level strategies Low cost leadership strategy
The company acquires high quality of the raw materials from different suppliers present
in the vast area network. So, production costs are high as compared to small scale and low
product manufacturing. Just because of the high range of production, the company is not able
accomplish the low cost leadership strategy. The business level objective of Nestle emphasizes
on attaining goals by cost efficient activities and also by managing the entire inventory in the
workplace. The present strategy is to maintain the operations by buying good quality ingredients
and also raw material from the suppliers. Differentiation strategy
This strategy is considered by the company to create a good brand value among the
consumers. Nestle manufacturers are providing 10,000 products under 8, 5000 brand names.
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There are many goods that are differentiated easily in relation to the competitors on the basis of
quality, product pricing and labeling. The differentiation strategy is related with the quality that
is provided by the company as they never compromise with the overall quality provided in the
market (Kent & Pauzé, 2018).
SWOT ANALYSIS
(SOURCE: Ceta, 2019).
Strength
 Unmatched research and development capability
The company has attained the competitive advantage only because of research and
development capabilities. Nestle has spent CHF 1.678 Billion on R&D in 2015. This has also
accounted for the total revenue of 1.89%. The company has 5000 individuals located in 30 R&D
facilities on the global platform ( Nestle, 2019).
 Large geographic presence with diversified revenue sources
The company operates and sells the products in 189 countries. Nestle has divided into the
different operating segments into 3 geographic areas such as Americans, Europe, Middle East
and North Africa. By having presence in the different countries, the company has attained the
large market share (Nestle, 2019).
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 Large brand portfolio
The company has the large brand portfolio and provides over 2000 product varieties in
different categories such as Powered and liquid beverages, milk and ice cream products, Nestle
nutrition, PetCare, Confectionary items such as Maggi and chef. So, it can be said that the
product portfolio is wide that satisfy the customer’s needs.
Weakness
 Criticism related to high water usage and forced child labor
The Nestle was critiqued for the unethical marketing practice related to baby formula, in
which the demand is made of the debt payment, anti-unionism and also for misleading labeling.
These are the factors which has affected the overall image and lost customer confidence in
relation to the products offered in the market.
 Contaminated food recalls
The company has recalled its products in the different market. In 2014, 37,000 tons of the
contaminated Maggi Noodles has been recalled. The outcome relates to the huge loss of the
company and also affected the brand image in the market.
Opportunities
 Vibrant and correct labeling
It has been analyzed in the Delloitte study, that the customers purchase the products that
have clear labeling, 62% of the customers chose products that are not harmful. Nestle has the
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history of offering misleading nutritional information so it can be improved by considering
proper labeling method.
Threats
 High competition level
The rivalries are the threats that affect operational functions of business. The beverage
and food sector has high competition and there are many companies that are offering the
different variety of products in the market. The food and beverage sector are flourishing in the
market and it is also affecting the growth of the Nestle Company. The competitors of the Nestle
are Unilever, Danone, Heinz and also Kraft Foods (Vergeer, Vanderlee, Potvin Kent, Mulligan
& L’Abbé, 2018).
References
Ceta, N. (2019). SWOT analysis. Retrieved from: https://tallyfy.com/swot-analysis/
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Galalae, C., & George, S. (2017). Case Study 1: Nestle in Mexico: The Good Food Versus The
Good Life Dilemma. In Strategic Marketing Cases in Emerging Markets (pp. 1-10).
Springer, Cham.
Kent, M. P., & Pauzé, E. (2018). The Frequency and Healthfulness of Food and Beverages
Advertised on Adolescents' Preferred Web Sites in Canada. Journal of Adolescent
Health, 63(1), 102-107.
Nestle. (2019).About us.Retrieved from : https://www.corporate.nestle.ca/en/aboutus
Nestle. (2019).Mission.Retrieved from : https://www.nestle.co.za/aboutus/missionvision
Nestle. (2019).Vision.Retrieved from : https://www.nestle.com/randd/ourvision
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