Strategic Overview of Nestle: Analysis, Recommendations, and Impact

This report provides a comprehensive strategic overview of Nestle, a leading food and beverage company. It begins with an introduction to Nestle, followed by an outline of its strategic aims and objectives, emphasizing its focus on nutrition and consumer health. The report then discusses the strategic importance and impact of Nestle, highlighting its contribution to consumer well-being and its strong research and development capabilities. A competitive analysis is conducted using Porter's 5 Forces, examining competitive rivalry, threats of new entry and substitution, and the bargaining power of customers and suppliers. The report concludes with recommendations for Nestle to enhance its growth and expansion, such as increased corporate social responsibility and a stronger social media presence. The report references various academic sources to support its analysis and findings.

Running head: STRATEGIC OVERVIEW OF NESTLE
Strategic Overview of Nestle
Name of the Student
Name of the University
Author Note

1STRATEGIC OVERVIEW OF NESTLE
Table of Contents
1. Introduction..............................................................................................................................2
2. Strategic Aims and Objectives of Nestle..................................................................................2
3. Strategic Importance of Nestle.................................................................................................3
4. Strategic Impact of Nestle........................................................................................................3
5. Nestle Strategies.......................................................................................................................4
6. Competitive Analysis and Evaluation......................................................................................4
6.1. Porters 5 Forces Analysis of Nestle..................................................................................4
7. Conclusion and Recommendations..........................................................................................5
References........................................................................................................................................6

2STRATEGIC OVERVIEW OF NESTLE
1. Introduction
Nestle is the largest and most well-known food and beverage company in the whole
world. It is headquartered in Switzerland and runs branch operations across different parts of the
globe. Nestle is particularly known for the high quality of its dairy or milk products, and has
managed to acquire an excellent name for itself in the production of nutritious food and drink for
customers of every age group.1 This assignment engages in a strategic evaluation of the Nestle
Company. The strategic aims and objectives of the Nestle Group are outlined, the strategic
importance of the company is discussed and the competitive analysis of the company is carried
out using tools such as Porter’s 5 Forces. The report concludes with a number of effective
recommendations that the company can take into consideration in order to grow and expand
adequately and at the strategic level in the near future.
2. Strategic Aims and Objectives of Nestle
The strategic aims and objectives of Nestle are as follows –
 Nestle believes that good nutrition holds the key to healthy living and hence devotes its
energies to the production of healthy and nutritious foods for customers of all age groups
 Consumer health care products are offered by Nestle so that people are able to meet all of
their health related aims or goals in a smooth and hassle free manner
1 Akpoviroro, Kowo Solomon, Akinbola Olufemi Amos, and Akinriola Oladipupo Olalekan. "Exploring the Link
Between Competitive Strategies and Organizational Performance in Beverage Industry.(A case of Nestle PLC)."
(2019).

3STRATEGIC OVERVIEW OF NESTLE
 Nestle intends on always being one of the leading names in the world when it comes to
manufacture of nutritious and healthy food and beverages2
3. Strategic Importance of Nestle
“Good Food, Good Life” is the tagline that guides the activities and operations of the
Nestle Company. The strategic importance of Nestle lies in the fact that it provides its customers
with an extensive range of food choices. As a consequence, Nestle makes a direct contribution to
the quality of living for its customers as it puts its target audience in a position to carve out a
healthy life for themselves through the consumption of nutritious food and beverage as offered
by Nestle. 3
4. Strategic Impact of Nestle
Nestle is able to ensure a sound strategic impact in the industry in which it operates. The
research and development capabilities of the Nestle Company are very strong, and it has an
entire team of experts to guide it in the production of nutritious food and beverage that is likely
to be well received by its target audience in each and every part of the world. Through its
commitment towards the production of healthy food and beverage, Nestle has been able to create
a long standing impression in the health industry and its products are widely coveted by
customers worldwide. 4
2 Desai, Pranav. "Predicament Management During Product Recall of Maggi." IBMRD's Journal of Management &
Research 5, no. 2 (2016): 21-26.
3 Ibid
4 Desai, Pranav. "Predicament Management During Product Recall of Maggi." IBMRD's Journal of Management &
Research 5, no. 2 (2016): 21-26.

4STRATEGIC OVERVIEW OF NESTLE
5. Nestle Strategies
The strategies that are followed by the Nestle Company for the production of food
and beverage are those that are aimed at accelerating growth and increasing efficiency among
other things. Nestles business strategies revolve around understanding as well as meeting the
varied needs and requirements of its customers as a consequence of which the portfolio of Nestle
is one that is positioned well enough for growth. Yet another effective strategy of Nestle is the
prudent allocation and use of capital along with the creation of shared value.5
6. Competitive Analysis and Evaluation
The competitive analysis and evaluation of Nestle will be conducted through the use of
tools such as Porter’s 5 Forces.
6.1. Porters 5 Forces Analysis of Nestle
Competitive Rivalry – Competitive rivalry is quite high for a company like Nestle. This is
because there are other well-known names in the food and beverage industry such as Group
Danone and Kraft Foods that offer similar or related food and beverage products at competitive
prices.6
Threat of New Entry – The threat of new entry is low for Nestle. This is largely due to the fact
that the food industry is so diverse.
5 Desai, Pranav. "Predicament Management During Product Recall of Maggi." IBMRD's Journal of Management &
Research 5, no. 2 (2016): 21-26.
6 Nastiti, Miranti. "Liquidity and operational risks relationship with the performance of Nestle Berhad." (2017).

5STRATEGIC OVERVIEW OF NESTLE
Bargaining Power of Customers – The bargaining power of customers is high for a company
like Nestle as its target audience can choose from similar products offered by rival and
competitor companies like Kraft Foods.
Bargaining Power of Suppliers – Bargaining power of suppliers is not high, but low as there is
an efficient distribution and supply Network that Nestle can count on for the supply of materials
needed for production.
Threat of Substitution – The threat of substitution is high for Nestle and its products like baby
food, pasteurized milk and bottled water already have been substitutes in the global market. 7
7. Conclusion and Recommendations
Nestle is definitely one of the most thriving food and beverage companies in the world.
The following recommendations can be taken into consideration by Nestle to grow and expand
adequately well in the future.
 Nestle should engage in more corporate social responsibility to win the respect of its
target audience
 Nestle must increase its social media presence to market its products as effectively as
possible to a wide global audience8
7 Nastiti, Miranti. "Liquidity and operational risks relationship with the performance of Nestle Berhad." (2017).
8 Varma, Gedela Rakesh, and Jaladi Ravi. "Strategic Analysis on FMCG Goods: A Case Study on Nestle." (2017).

6STRATEGIC OVERVIEW OF NESTLE
References
Akpoviroro, Kowo Solomon, Akinbola Olufemi Amos, and Akinriola Oladipupo Olalekan.
"Exploring the Link Between Competitive Strategies and Organizational Performance in
Beverage Industry.(A case of Nestle PLC)." (2019).
Desai, Pranav. "Predicament Management During Product Recall of Maggi." IBMRD's Journal
of Management & Research 5, no. 2 (2016): 21-26.
Dhanesh, Ganga S., and Krishnamurthy Sriramesh. "Culture and crisis communication: Nestle
India's Maggi noodles case." Journal of International Management 24, no. 3 (2018): 204-214
Galeshchuk, Svitlana. "Prediction of Trading Profit of Transnational Company Using Artificial
Neural Networks: A Case Study of Nestle in Europe." Journal of Global Economics,
Management and Business Research 7, no. 2 (2016): 96-102.
Nastiti, Miranti. "Liquidity and operational risks relationship with the performance of Nestle
Berhad." (2017).
Varma, Gedela Rakesh, and Jaladi Ravi. "Strategic Analysis on FMCG Goods: A Case Study on
Nestle." (2017).