Nestle's Competitive Advantage and Growth Strategies

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Strategic Management
Infographic and Presentation Transcript
Executive Summary:
This research has been prepared to analyze and discuss the evaluate the objectives, aims and the
primary aspects of a strategic plan while taking into account the vision and mission of the
organization. Also the purpose of this report is to evaluate the processes and forces that influence
the strategic decision making process in relation to business strategy. It will also explain the
significance of strategy as a means of identifying and realizing opportunities of growth. At the end it
the discussion of the project will be to analyze the managerial, planning and procedural tasks
associated with implementing and executing organizational strategies and identify the key risks
associated with this process.
Introduction:
Strategy Management has been determined as it is the process of evaluation, planning and
implementation of competitive advantage with improvement and by maintaining design. Evaluation
and execution of planning is to be done with analyzing the external and internal environment. The
planning of strategic management includes business models, corporate direction, international
strategies etc. The implementation process includes organizational structure, Management structure
development and handling the organization through ethical corporate governance. The result of
strategic management activities are to be seen in the change in revenues, company’s market shares ,
profits and returns etc.
(https://www.researchgate.net/publication/272352897_Strategic_Management)
Preparation of infographic:
Company’s Name- Nestle
Mission:
The world’s leading nutrition, health and wellness company. Our mission of ‘’Good Food, Good Life’’
is to provide consumers with the tasting , most nutritious choices in a wide range of food and
beverage categories and eating occasions , from morning to night.
(https://www.strategicmanagementinsight.com/mission-statements/nestle-mission-statement.html)
Vision:

To bring consumers foods that are safe , of high quality and providing optimal nutrition to meet
physiological needs. In addition to Nutrition, health and wellness, Nestle products bring consumers
the vital ingredients of taste and pleasure.
Historic Performance:

BSE LIVE
16:00 | 17-05-2019
10452.60
NSE LIVE
15:55 | 17-05-2019
10465.65
The Yearly Results page of Nestle India Ltd. presents the key annual result items, its comparison with the sector
peers and its Annual Results for the last five years.
TOTAL INCOME
13.39%
Rs11,551.19Cr.
PEER RANGE
-3.86
11,551.19
EBIT
31.57%
Rs2,540.90Cr.
PEER RANGE
-825.98
2,540.90
PAT
31.15%
Rs1,606.93Cr.
PEER RANGE
-1,088.40
1,606.93

Yearly - Nestle India Ltd.
Rs (in Crores)
Dec'18 Dec'17 Dec'16 Dec'15 Dec'14
INCOME
Net Sales Turnover 11292.27 10009.60 9223.80 8175.31 9854.84
Other Income 258.92 176.92 149.39 110.09 87.32
Total Income 11551.19 10186.52 9373.19 8285.40 9942.16
EXPENSES
Stock Adjustments -6.01 -79.56 -10.78 11.97 -67.43
Raw Material Consumed 4365.68 4231.66 3775.09 3358.87 4482.54
Power and Fuel .00 .00 .00 .00 .00
Employee Expenses 1124.15 1017.45 985.96 837.43 819.74
Administration and Selling Expenses .00 .00 .00 .00 .00
Research and Development Expenses .00 .00 .00 .00 .00
Expenses Capitalised .00 .00 .00 .00 .00
Other Expenses 3128.63 2705.16 2506.24 2252.72 2526.81
Provisions Made 62.17 38.36 41.80 33.31 61.38
TOTAL EXPENSES 8674.62 7913.07 7298.31 6494.30 7823.04
Operating Profit 2617.65 2096.53 1925.49 1681.01 2031.80
EBITDA 2876.57 2273.45 2074.88 1791.10 2119.12
Depreciation 335.67 342.25 353.62 347.26 337.54
EBIT 2540.90 1931.20 1721.26 1443.84 1781.58
Interest 111.95 91.90 3.51 3.29 14.23
EBT 2428.95 1839.30 1717.75 1440.55 1767.35
Taxes 822.02 614.11 515.00 250.36 589.66
Profit and Loss for the Year 1606.93 1225.19 1202.75 1190.19 1177.69
Extraordinary Items .00 .00 .00 .00 .00
Prior Year Adjustment .00 .00 .00 .00 .00
Other Adjustment .00 .00 .00 .00 .00
Reported PAT 1606.93 1225.19 926.54 563.27 1184.69

KEY ITEMS
Reserves Written Back .00 .00 .00 .00 .00
Equity Capital 96.42 96.42 96.42 96.42 96.42
Reserves and Surplus 3577.32 3324.17 2917.28 2721.42 2740.79
Equity Dividend Rate 1150.00 .00 630.00 300.00 630.00
Agg. Non-Promoter Share(Lakhs) .00 .00 .00 .00 359.01
Agg. Non-Promoter Holding(%) .00 .00 .00 .00 37.24
Government Share .00 .00 .00 .00 .00
Capital Adequacy Ratio .00 .00 .00 .00 .00
EPS(Rs.) NaN NaN NaN NaN 122.89
Rs (in Crores)
(https://economictimes.indiatimes.com/nestle-india-ltd/yearly/companyid-13330.cms)
Evaluation of its internal and external environment:

SWOT Analysis:

SWOT Analysis:
Strength:
1.The strength of Nestle company includes strong cultural values, commitments to their
stakeholders.
2. It is positioned by three key areas that are quality leadership, customer satisfaction and
sustainability.
3. It has strong commitment quality with social responsibility.
Weakness:
1. Many a times the products of Nestle have faced criticism with their nutritional value in the
product and for that government has taken initiative because it becomes the health
concern.
2. In the past the public relation with Nestle was not so good. Some of the scandals were also
published on this.
3. International demand and standardization is still need to be balanced with Nestle.
Opportunity:
1. Ability to reach new consumer market and in international market as well.
2. Development of intangible capabilities to aid competitive advantage .

3. Innovative creation of distribution channels.
Threat:
1. Variability in raw materials prices effects the firm’s ability to sustain prices
2. Change in the technology both in innovation and challenges associated with it.
3. Ageing population shifting the demographics of the workforce.
(https://www.ukessays.com/essays/marketing/swot-and-pestel-analysis-of-nestle-
marketing-essay.php)
PESTLE Analysis:
PESTLE Analysis is a tool used for industry dynamic via recognition of political, Economical, Social,
Technological, Legal and environmental forces.
Political :
1. This occurs change in the political activities and in the surrounding food standards.
2. Government stability in new economies.
Economical:
1. Awareness on change in the inflation, economic growth rates etc.
2. Change in the consumer’s budget , increase in the cost conscious consumer.
3. Increase in the price of raw material goods in relation to the need to source from sustainable
suppliers.
Social:
1. Change in the consumer’s attitude, they move towards healthier products in line with
government initiatives.
2. Change in the lifestyle of consumer.
3. The need to adapt to different cultures settings that is language, religion belief and family
settings.
Technological:
1. Consumers interaction with companies via social media and they are able to do so across a
range of platforms.
2. Innovation fuelled by technological development.
3. E-commerce as a platform for development.
Environmental:
1. Increased attention directed towards corporate social responsibility.
2. Environmental concerns including packaging and recycling etc.
Legal:
1. Change in the laws and regulation.
2. Change in the nature of regulation

3. Need to adhere to global regulations and changes across different international market.
(https://www.slideshare.net/sitirizkymardhani/strategic-management-19302837)
Preparation of presentation of Transcript:
Presentation on Nestle company
By CEO
About the company:
- Multinational and food and beverage company.
- Nestle is a Swiss German word which means Little Nest which is its trademark.
- Its is headquartered in Vevey, Switzerland.
- In terms of revenues it has been considered the largest food company.
- It has been ranked 72 on the Fortune Global 500 in 2014.
Inception:
- Formed in 1905 by the merger of the Anglo- Swiss Milk company and Farine Lactee Henri
Nestle.
- Farine Lactee Henri Nestle established in 1866 by Henri Nestle in Switzerland.
- It has began its sells by selling baby food.
- And Anglo Swiss condensed milk company had established in 1866 by brothers George Page
and Charles Page and it had started its operations from Cham, Switzerland.
- Anglo Swiss added milk based baby products in 1877, and the Nestle company added
condensed milk .
Brands and Products:
- Coffee
- Bottled water
- Breakfast cereals
- Infant foods
- Milkshakes and other beverages etc. (https://prezi.com/bdhxa3enivuc/presentation-on-
nestle/)
Nesltle current position:
-It has strong sales, operating cash flows and return of shareholders.
- Balanced emerging market.
- 5-6% organic growth and improvement in EBIT.
-Focussing on functional food with higher margin that means spending more in R & D.
Nestle growth Drivers are:
- Nutrition, Health and wellness.
- Emerging markets
- Premiumization

Financial Information:
- Achieved organic growth of 6.2% in 2010.
- EBIT- 16.2 bn (2010)
- Net profit- 34.2 bn(2010)
- Sales Group- 109.7 bn(2010)
Recommendation ( what should be done in near future):
As a CEO of this company I would like to tell you all that we need to focus these things for our
company listed below:
- Need to continue focus on sales in emerging market such as Asia, Africa, and Latin America.
- Raw materials could be brought from emerging markets because we need to provide
stability.
- For increase efficiency we need to follow constant streamlining of operating process.
- Need to increase advertisement. As Nestle is positioned in the market strongly, it can afford
to advertise when their competitors might not be able to, at the equal level.
- Need to strengthen presence in frozen and convenience food industry, and the area
between healthy food and pharmaceuticals as well.
BCG Matrix: