Strategic Management Report: An Analysis of the Nestle Company

This report provides a comprehensive strategic management analysis of Nestle, a global leader in the food and beverage industry. It begins with an executive summary, followed by an introduction that highlights the benefits of strategic planning within the company. The report delves into both internal and external environmental analyses, utilizing PESTLE and SWOT frameworks to assess political, economic, social, technological, legal, and environmental factors, as well as the company's strengths, weaknesses, opportunities, and threats. The analysis includes discussions on Nestle's competitive advantages, risk management strategies, and the role of strategic planning in achieving organizational goals. The report concludes with recommendations for future strategic direction, aiming to enhance market share and address quality concerns, supported by the findings from the SWOT analysis. The importance of adapting to changing consumer behaviors and maintaining a strong public image through quality offerings is emphasized throughout the analysis. This report is a valuable resource for students and professionals seeking to understand the strategic landscape of a major multinational corporation, and can be found on Desklib, a platform providing AI-based study tools.

Running Head: Strategic management
Strategic Management

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Executive summary
Nestle is one of the largest food and beverage industry in the world. There are more than
2000 brands across 191 countries. In this report, the discussion will be made on the
environmental analysis by taking into consideration SWOT analysis. To enhance the market
share Nestle should take into consideration proper strategic planning so that the activities can
be conducted smoothly. It is analyzed that quality has been a major issue for Nestle and has
a lot of negative publicity for the same. The company should cater various techniques so that
public image can be enhanced. The public image can only be enhanced if there is proper
quality offered to the customers.
The main aim of the report is to emphasize on the organizational analysis. In the last
phase, Recommendations are made by analyzing internal and external analysis of the
company so that success can be achieved in future.

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Table of Contents
Executive summary.....................................................................................................................................1
Introduction.................................................................................................................................................1
Benefits of Strategic planning in Nestle.......................................................................................................1
Role of environmental analysis as a part of a strategic planning process....................................................3
Internal Analysis......................................................................................................................................3
External analysis......................................................................................................................................4
Internal Environmental analysis..................................................................................................................4
Pestle Analysis.........................................................................................................................................4
External Environmental analysis..................................................................................................................6
SWOT analysis.........................................................................................................................................6
Findings via a SWOT Analysis.......................................................................................................................7
Recommendations.......................................................................................................................................8
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
Introduction
The report takes into consideration the analysis of the Nestle Company. Nestle was
established by Henri Nestle in 1866 in Switzerland. Nestle is considered as a leader in this

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industry because there are many innovative products that are introduced by the company.
For example: Maggi was first introduced by Nestle and then other competitors also launched
the products like Yippee or instant noodles. Also, the organization has specialization in many
products like baby food and drinks (Moura et al., 2015).
The report would begin with the benefits of Strategic planning in Nestle will be
discussed. In the next phase, the internal and external analysis will be discussed of the
company. In this report the last phase will reflect the findings by taking into consideration
SWOT analysis and also recommendations will be made on the future direction of the firm in
the next 3 to 5 years.
Benefits of Strategic planning in Nestle
Strategic planning plays a great role in conducting the activities of the organization. If
there is proper strategic planning in Nestle then it can help to achieve overall goals and
objectives in an effective manner. Strategic planning gives benefit to the company in
following ways:
a.) Efficient use of resources: Each and every organization has limited resources. The
process of planning offers information to the top managers so that proper decisions can
be made and also it helps to achieve overall goals and objectives (Adhikari and Roy,
2017).It is seen that if proper strategic planning is there in Nestle then it can be easy to
maximize the productivity and profitability effectively.
b.) Manage Risk: Strategic planning also helps to manage the risks that are prevailing in the
organization. Planning helps to encourage the change and also helps to adjust the
strategies according to the changing conditions. Risks that arise in the Nestle Company
can be managed by taking into consideration strategic planning. It will also help to
achieve success in the competitive environment (Appiah-Adu and Amoako, 2016).
c.) Team building: Planning promotes cooperation and if it is taken into consideration by
Nestle then it can be easy to capture large market share. If the large market share is
attained then profitability can also be enhanced effectively. It is important for the
organization to communicate the plan with its employees as they will conduct the
activities accordingly (Hollensen, 2015).

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d.) Creating competitive advantage: Strategic planning helps the organization to get a view
of their current strength and weakness which are related to the competitors. It is analyzed
that many a time the management team evaluate the areas where the competitors may be
vulnerable and then make strategies to compete in the market. Strategic planning can help
the company to create a competitive advantage by analyzing the weakness of the
competitors (Cassidy, 2016).
e.) Establish goals: The key aspect of the planning process is to enhance the performance of
the employees. Proper strategic planning also reduces duplication of work and enhances
the productivity of the employees. Nestle can achieve success if goals and standards are
established in a proper manner (Peck et al., 2013). It is seen that company can also
maintain a good image in the market if proper strategic planning is taken into
consideration. Also, the process of goal setting helps to compare forecast results with
actual results (Haines, 2016). So, if goals and objectives are set with proper planning
then it can be easy for the company to achieve success and growth in the market (Payaud,
2014).
Role of environmental analysis as a part of a strategic planning process
Internal Analysis
Internal analysis plays a great role in the process of strategic planning. Planning is an
important part of every organization. Internal analysis is related to the competencies and
competitive viability of the company. To conduct internal analysis SWOT Analysis is
considered and it is related to the strength, weakness, opportunities, and threats to the
organization. The information that is collected through internal analysis is important as it
helps to develop strategic planning objectives which can assist the organization to sustain in
the market (Saluja and Mahajan, 2017).
It is seen that internal analysis is an important measure that determines the level of
strength and competency of the organization. Nestle uses latest technology system and
equipment so that work can be accomplished. At the time of using the latest technology, it is
seen that strategic planning is done so that right decision can be taken to conduct the
activities of the organization (Piercy, 2016). Also in the internal analysis, the financial goals

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and strategic planning objectives of the company are accomplished. Strong identity of the
company can be built if there is proper strategic planning in the organization. The proper
strategic planning adopted by the organization helps to maintain the good image in the
market.
It is also seen that if there is no proper strategic planning then it can be difficult for the
organization to adopt proper technologies so that productivity can be enhanced. If the
company does not consider updated technology than negative impact is seen in the overall
productivity. If the weakness of the company is analyzed then it can be easy to revise the
strategic planning so that failed objectives can be addressed or weakness can be eliminated
(Prince, 2015).
If the company want to enter the market than internal analysis is important to be considered
so that success can be attained. To evaluate the market each and every step is taken by taking
into consideration strategic planning. It is essential for the organization to be aware of the
changes that take place like technology, economy and the activities of the competitors. The
internal analysis offers important information that can assist to build strength and it can only
be done by strategic planning.
External analysis
The external analysis also plays an important role in the process of strategic planning. It
is seen that through this analysis business can survive in the competitive environment. It also
helps the managers to adjust the strategies so that the operations of the business can be
conducted smoothly. If there is proper strategic planning in the organization then it can be
easy for the employees to work according to the strategies of the competitors. The external
analysis is the strategy that is used at the time of starting the review process of the strategies
related to the organization. If Nestle considers proper strategic analysis than a company can
easily analyze the competitors prevailing in the market and can take effective strategies to
compete effectively (Qiao et al., 2017).

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Internal Environmental analysis
Pestle Analysis
Political Factors
It is seen that Nestle is operating their routine activities in a diversified community and
there are various changes in the policies and procedures that are faced at the time of
conducting the operations. There are many products that are given by the organization but
because of various reasons, the products are not given in various countries. The company
has shown stability in various economies like for example in China and India. Nestle has to
take into consideration many political changes in developing countries so that the operations
can be conducted easily (Zeng, 2017). Also, the activities of the company are affected by the
risks that occur due to the government instability.
Economic Factors
The company has emphasized on the research and development and also introduced
innovative products in the market. Due to the economic changes in various countries the
company has to face the issue in supplying its products to the customers (Laforet, 2015).It is
analyzed that consumers also have the knowledge of the change in inflation and economic
growth. Target segments are also set by taking into consideration the economic policies. To
take accurate decisions related to price, inflation rate and buying power it is important to
target the market. To promote economic worth of the farmers the organization emphasizes on
a proper contribution of the products so that satisfaction level of the customers can be
increased.
Social Factors
The operations of the company are influenced by sharing the thoughts and beliefs of the
customers. Culture and lifestyle of the customers are considered by the company that induces
the company to provide appropriate product to the right segment. Social perspective is also
the factor that is considered by the Nestle Company. The company focuses on the changing
attitude of the customers so that according to their demand product can be introduced in the
market. In the recent scenario, people take care of their health and consume those products

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that are beneficial for their health. Good image of the company is also maintained by
evaluating the behavior of the customers. To maintain the quality the production of the
product is done locally so that customers can be satisfied with the quality offered by the
company (Olavarrieta, 2015).
Technological Factors
Technology provides many opportunities to the organization so that development of new
products takes place in a better way. Nestle consider the latest technology so that proper
information can be maintained and gathered with the help of latest software. Social media
has also reduced the gap between the consumers and the organization. Nestle take into
consideration latest technology so that according to the demand products can be produced.
Legal factors
The company has to face issue related to labor in which the wages are fixed and provision
of law is considered. It is analyzed that organization has to follow the laws related to
promotion as it helps the company to achieve success in the market. The company considers
foreign trade regulations so that the products that are introduced can be distributed properly.
Also, the changes that are made in the international market should be considered by taking
into consideration global regulations.
Environmental factors
In the present scenario, it is seen that the company emphasizes on a clean environment.
It is important for the company to consider proper rules and regulations so that environment-
friendly activities can be adopted. There are many countries in which rules are different so it
is important to create proper acceptance in the market. Nestle focuses on contributing
socially so that the problems concerned with packaging and recycling can be resolved
properly.

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External Environmental analysis
SWOT analysis
This section reflects a SWOT analysis of the Nestle Company. SWOT analysis is
considered to analyze the resources and capabilities that have developed a competitive
advantage. There are also threats and opportunities in the current scenario that is faced by the
organization and also it has given direct impact on the overall operations of the organization.
Strength
Strength is one of the assets of the organization. It is seen that company is one of the
biggest and renowned brands. Nestle emphasizes on individual branding that helps the
company to create awareness in the food brands. It is seen that company has a large
distribution channel system. The company also penetrated in urban and in rural markets
(Krafft et al., 2015). The company has adopted the method of proper distribution by door to
door services that help the company to make the product visible in the market. Also, Nestle
has a large workforce that helps to conduct the activities in a smooth manner (Dabholkar,
2015).
Weakness
It is analyzed that the organization has many brands under the same group so it is difficult
to handle individual brands in a proper manner. There are various legal and consumer issues
that are seen in the market. Also, many controversies have taken place in the market due to
the quality of the product. Also, it is important to lower the fixed cost and to attain a high
share of the market (Orel and Kara, 2014).
Threats
It is evaluated that the buyer in this industry is high and the loyalty is low if the
comparison is made with other competitors. The major threat to the company is related to the
change in the technology. As it is important that latest technology should be taken into
consideration so that activities can be conducted smoothly. There are many substitutes
available in the market for every product that is offered by the company. There is large
competition level in the food industry (Sa Vinhas and Heide, 2014). For instance: Cadbury.

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Opportunities
Nestle has the opportunity to reach the target market and also enhance the business in the
international market. Distribution of products should also be done by considering proper
distribution channel. It is evaluated that there are many startups that are looking to merge
their business so the company has the opportunity to enhance the activities on a large scale
(Galalae and George, 2017).
Findings via a SWOT Analysis
By conducting a SWOT analysis it is seen that the company is a popular brand in the
market. So, it is easy for the company to enhance its market share in the international market
also. By having a good image in the market the company has enhanced the overall
satisfaction level of the customers. The major strength of the company is good distribution
channel that helps to distribute the products in the market. The controversies that have taken
place in the market are related to baby formula boycott and child labor. It has given negative
impact on the customers and also on the image of the company. Also, the weakness of the
company is related to fixed cost so the company should minimize the high cost and focus on
achieving large market share.
The risk is related to change in the technology. The company should focus on adopting latest
technology so that productivity can be enhanced.
Recommendations
By evaluating the four cells it is seen that Nestle should focus on introducing innovative
products that are different from their competitors so that in future success and large market
share can be achieved. It is seen that the company has the opportunity to enhance the share in
the international market. So by analyzing the demand of the customers, the products should
be introduced in the market.
Nestle should also focus on maintaining good quality product as it will help to enhance
the goodwill in the market. Also, there should be proper management of the activities of the
organization so that it can be completed effectively. The company can be one of the best
companies in the next 3 to 5 years if proper resources are maintained.

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Conclusion
In this report, it is analyzed that proper measures to achieve growth should be considered
like effective promotional techniques. Nestle should emphasize on the weakness so that
profits can be attained properly. If customers are satisfied with the quality of products offered
then it can be easy to enhance its market share. It is also evaluated that the company should
introduce more innovative products with good quality so that goals and objectives can be
attained easily.
References
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Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.
Dabholkar, P.A., 2015. How to improve perceived service quality by increasing customer
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