Strategic Analysis of Thumbs Up UK: Models, Theories, and Applications

This report provides a comprehensive analysis of the business strategies, impact, models, and environment for Thumbs Up UK. It begins by examining the macro environment, including political, cultural, economic, and technological factors, and delves into market segmentation, target marketing, and the marketing mix. The report assesses the organization’s internal environment and capabilities using the Ansoff Matrix and PESTLE analysis. It evaluates the market sector using Porter’s Five Forces model and applies various models, theories, and concepts such as SWOT analysis and the BCG approach to understand strategic directions available to the organization. The analysis covers advertising strategies, industry analysis, organizational culture, corporate strategy, and differentiation strategies, including acquisitions and joint ventures. The report also looks into the micro-environment, suppliers, marketing intermediaries, customers, and competitors, providing a thorough understanding of Thumbs Up UK's strategic landscape. Desklib offers a wealth of similar solved assignments and study resources for students.

Business strategies, impact, models and environment for thumbs up in UK

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Contents
Introduction......................................................................................................................................2
LO1-Analyze the impact and influence which the macro environment has on an organization and
its business strategies.......................................................................................................................3
Marketing Environment-Macro Environment.............................................................................3
Market Segmentation...................................................................................................................3
Target Marketing..........................................................................................................................4
Marketing Mix.............................................................................................................................4
Strategies......................................................................................................................................6
LO2-Assessing an organization’s internal environment and capabilities......................................11
Marketing Environment-Micro Environment............................................................................11
Ansoff Matrix.............................................................................................................................12
PESTLE Analysis......................................................................................................................12
LO3- Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a
given market sector........................................................................................................................14
Porter's Value Chain Analysis of Nestle....................................................................................14
Porter's Five Force Analysis......................................................................................................14
LO4-Application of models, theories and concepts to assist with the understanding and
interpretation of strategic directions available to an organization.................................................16
SWOT Analysis.........................................................................................................................16
BCG Approach...........................................................................................................................20
Conclusion.....................................................................................................................................23
Bibliography..................................................................................................................................24
References......................................................................................................................................25
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Introduction
Nestle Company founded in 1867 and the person was Henri nestle. It was listed as the number
one company in the Global 500 companies list. It has a market capitalization of $200 million.
There are 449 factories in 86 countries with the total staff to be more than 328000.The main
products are chocolate, milk, coffee, tea, mineral water, baby food, breakfast cereals,
confectionery items, dairy products, food for senior dogs in Australia, etc. It falls under the
category of food and beverage company. The headquarters is based out of Switzerland. The logo
has its own history. The timeline has exhibited that the first product was milk based baby food in
1866. Slowly the company entered into acquisitions and partnered with some companies to
introduce more new products in the market like chocolates, Maggi noodles, etc.
Organizational Chart Logo Evolution
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LO1-Analyze the impact and influence which the macro environment has on an
organization and its business strategies.
Marketing Environment-Macro Environment
The Macro-Environment is made up of the following:
1. Political Environment - Nestle has strong networking channels due to which the rapport has
been built very well with the political leaders of the countries. It is due to these networking lines
that the company is successful in maintaining the business relationships and associations across
the countries.
2. Cultural Environment - The Company is very closely working and researching upon the tastes
of the local societies and communities. Thus, it has been successful in launching new and
innovative products across the globe (Pride, Ferrell, Lukas, Schembri & Niininen, 2015).
3. Economic Environment - The economic conditions of a country play a very important role or
Nestle. This is one of the main threats for the company.
4. Technological Environment - The strong supply chain and networking presence is solely due
to the good technological skills and apt usage of the technology by the company
Market Segmentation
The Market Segmentation has been divided into 4 broad areas viz.
1. Geographic - This constituent the production and launching of the products as per the
particular geographic conditions. For example, the product "Nescafe Ice" is a summer product,
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where as "Nescafe Classic" is a winter one. Moreover, depending upon the location of the city,
Nestle is launching products as per the tastes of the individuals. Like in India, it has different
flavors of Maggi Noodles (Plummer, 2014).
2. Demographic - According to the age, Nestle has different products like "Lectogen" for babies
less than 7 months, Lectogen 3 for babies under 12 months, "Cerelac" for the baby under 1 year
and "Nido" for children of 2 years. Now recently, Nestle has launched food for the senior pet
dogs in Australia. Similarly, "Nestle Classic" is meant for those who really work hard and the
markets are visible with the further segmentations of Nestle based upon the earnings of the
customers (Marcus, 2009).
3. Psychographic - There are products from nestle which match according to the lifestyle and
personalities of the individuals like "KITKAT" and "Nescafe 3".
4. Behavioral - The best product under this category is "Cerelac" wherein the customers really
behave according to the benefits and the presence of the nutrients which are good for the health.
Target Marketing
The target marketing analysis reveals that Nestle has three main points
1. Undifferentiated Target marketing with products launched like "Nescafe 3 in 1, Maggi
Noodles, and kitkat".
2. Differentiated Target marketing wherein the products are "Koko Krunch, Nesquick, Chocolate
milk".
3. Concentrated Target Marketing with products like baby foods.
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Marketing Mix
Under the Positioning Strategy, there are two cases
1. Product Differentiation-nestle has launched various products for targeting different kinds of
the customers. For example, Nido has 25 types of minerals and is exclusively meant for the
children (Statista, 2018).
2. Channel Differentiation-The strong supply chain management has helped nestle to reach out to
the customers very easily.
Under the same category, there are still three more differentiations viz.
1. Image Differentiation - The brand name of each one of its products and the logo sets Nestle
apart from the rest of the competitors in the market and for the customers.
2. People Differentiation - The Company is known for recruiting and hiring a large number of
employees for varied services.
3. Service Differentiation - The Company believes in serving better for the customers rather than
the competition. The company operates on the lines of 24 hours’ hotline services for the
customers (Fleisher & Bensoussan, 2015).
The marketing mix strategy used by the company is on the lines of the
1. Products - Nestle has diversified products different from country to country.
2. Price - There is no negotiation with respect to the price. This allows it to maintain the brand
name.
3. Place - The place matters a lot to Nestle as it helps them to design their products and launch
them in the market.
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1. Promotion - The CSR is the weakest area for Nestle. However, in terms of advertising, it
has not gone back and promotes itself with the latest trends in the markets.
The Transnational Strategy adopted by the company was based on the low cost, introducing
different products, expanding the businesses to different markets and receiving high local
responsiveness.
The localization Strategy was echoing the brand name of the Nestle in both local markets and
this was due to the cultural differences discovered in different parts of the countries.
The Customization Strategy was introduced to satisfy the customers with their specific needs and
delivering the goods according to their wishes and desires. For example, the company is known
for establishing 85% of the market for instant coffee in Mexico, 66% for the powdered milk in
Philippines, etc.
Strategies
Advertising Strategy
The main strategy may be understood on the lines that the company used the same symbols
across the world and these symbols were not at all changed at any cost. Their motto was "think
globally and act locally". The product was designed in such a manner that it was well adjusted
and suited to all the cultural differences. The products were very innovative by nature and
covered all age groups like children, senior citizens, women, men and animals also. The products
were also redesigned as per the taste of the country like "Ghar ka Swad" in India. The strategies
for the advertisements were designed according to the age and attracted the children and the
youth more.
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Industry Analysis
If one observes the industry and analyzes it, it is very clearly observed that Nestle is a food
processing industry and is classified under the following categories viz:
1. Cannery
2. Meat processing
3. Packaging (Aerk, 2009).
On the other hand, it was also into
1. Selling products from raw to processed food
2. Giving good storage
3. Increased shelf life
4. maintained the hygiene and health standards
The competition was always present for Nestle from:
a. In the large market segments
b. Major competitors from both global countries and local cities
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Apart from this, the company was also known for
i. Increasing dieting and obesity cases
ii. Allergens
iii. Using quality ingredients
iv. Increase in the demand for the organize and health products
The working and operating strategy involved the following steps for Nestle.
1. Products were sold to both the whole sellers and retailers for further distribution cases
2. End consumers consisted of mainly the individuals
3. The good advantage of them was based on the economics of scale
4. The core competency and punch line for nestle is “Health, Nutrition and Wellness-Good food
good life"
5. It is the largest food and beverage company in the world.
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Nestle Culture
The Nestle Culture may be understood in 8 ways viz.
1. Flexibility in terms of the products and selling the products
2. Stability of the product in the markets
3. Focusing on the external markets also
4. Nestle believes in clan family type of culture i.e. collaborative by nature
5. It advocates more on the creative aspect of the product
6. The hierarchy in the management reveals the controlling power vested in each and every level
7. Presence of the competitive markets and still surviving
8. Maintaining the brand name in the market
The creative culture focuses more on the less functional and operational barriers, strong team
working, risk taking, motivating and encouraging the production of innovative and flexible
products in the market, taking initiatives and moving ahead in the market and being open and
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transparent towards the different market trends taking place due to the demands and needs of the
customers (Varadarajan & Menon, 2009).
Corporate Strategy
The Corporate strategy for Nestle covers the expectations and needs of the customers and effects
their business strategy and overall operations from time to time. The main and key element for
their focused strategy was based on the powerful and strengthening leadership at various
locations across the world. The company, moreover, opened many and large numbers of strategic
business units according to the geography and product that they had designed and launched in
the markets (Morris, 2005). They believe in the policy of "creating shared value".
Differentiation Strategy
Another strategy used from the side of Nestle is based on the differentiation in launching the
products (Aerk, 2009). They started off with the infant formula called "Farine Lactee". Secondly,
they launched spread chocolate called "Chokella". The third product was instant coffee called
"Nescafe".next was the chocolate powder drink called "Nesquik", followed by coffee creamer
"Coffee mate" and coffee mix called "Nescafe 3 in 1".
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Acquisitions and Joint Ventures
Nestle acquired other companies and entered into alliances with Coco Cola and two Chines
Companies in 1993, joint ventures with L'Oreal in 2009 and another venture with Colgate-
Palmolive Company in 2003.
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