Case Study

Nestlé Case Study 1. Nestlé Case Study Lauren and Florian 2. Mission“To provide consumers withthe est tastin!" mostnutritious choices in a wideran!e o# #ood and evera!ecate!ories and eatin!occasions" #rom mornin! toni!ht.$ %. Nestlé &verview' Nestlé S.(. is a Swiss company" estalished in 1)*+' The company started with condensed mil, and in#ant #ormula' Now Nestlé sells ay #ood" ottled water" cereal" chocolate and other con#ections" #ro-en #ood" dairy" drin,s" #ood service" health and sports nutrition" pet care" and wei!ht mana!ement products . /rie# Summary o# Case' Nestlé was in a !ood position" ut needed to !row internally' The company was ale to increase its competitive advanta!e y continuin! to innovate or renovate products" ac0uire rms that t its rand" and divest itsel# o# lines that were not contriutin! to earnin!s +. Core Competencies as llustrated in the Case' 3loal mar,et share and rand reco!nition' nnovation and mar,et predictions' (ility to ac0uire new rms and divest itsel# o# unprotale lines in order to stren!then randin! and earnin!s' Success#ul pro!rams to increase e4ciency 5. S6&T (nalysis /ased on Case Facts' Stren!ths7 8iversied !loal #ood company" scale and mar,et reach" ,nowled!e o# !loal mar,ets" !reatly improved operatin! e4ciency" 9:8 and innovation' 6ea,nesses7 n the past the rm;s revenue was <*= in mar,ets with limited potential #or !rowth" wea, protaility protaility due to some o# its ac0uisitions" some low>mar!in low>mar!in products' &pportunities7 3oal o# = new or!anic internal !rowth" improved e4ciency" health #ood industry" maintain momentum' Threats7 Fierce competition" #ood> producin! rivals had improved operatin! e4ciency" possile rand overe?tension <. 8evelopments Since 2**<' Current C@& is Aaul /ulc,e' The company continued to ac0uire and divest itsel# o# product lines and rands' 3loal economic downturn' nvests in countries where raw materials are produced' ncreased emphasis on environmental awareness and #ree trade and sustainale #armin! techni0ues in developin! countries B. Nestlé;s Current Aosition' Stron! sales" operatin! cash ow" and returns to shareholders' Continued momentum" ut with volatile currency values and raw material prices' Consumer condence sha,y" ut alanced y emer!in! mar,ets' 2*11 !oal o# +>5= or!anic !rowth and @/T mar!in improvement' Focus on #unctional #oods with hi!her mar!in" which means increased spendin! in 9:8 ). Competitive (dvanta!es and 3rowth 8riversNestlé;s !rowth drivers are7'Nutrition" health" and wellness'@mer!in! mar,ets'&ut>o#>home consumption'Aremiumi-ationCompetitive (dvanta!es

1*. Financial n#ormation' The 3roup achieved or!anic !rowth o# 5.2= in 2*1*' Sales 3roup 2*1*7 CDF1*).< n EBB.B nG' @/T 2*1*7 CDF 15.2 n E1%.1  nG' Net prot 2*1*7 CDF %.2 n E2<"<  nG' 8ividend in 2*1* was CDF 1.B+ E1.) G per share to shareholders Ean increase o# 1+.5= compared to 2**)G 11. 9ecommendations 3eneral' Continued #ocus on sales in emer!in! mar,ets such (sia" (#rica" and Latin (merica' Aerhaps raw materials can e sourced #rom some o# these emer!in! mar,ets" provided there is staility' Follow throu!h with constant streamlinin! o# operatin! processes to increase e4ciency' ncreased advertisin!7 due to Nestlés stron! position it can aHord to advertise when their competitors mi!ht not e ale to" at the same level 12. 9ecommendations Specic' Continue to stren!then presence in #ro-en and convenience #ood industry" as well as the area etween health #ood and pharmaceuticals' Stren!then the connection to Nestlé;s commitment to I!reen; movement and sustainale #armin! to rands' Ti!hten up rand cohesionJ may e necessary to continue to divest product lines that are not a !ood t #or the company 1%. Conclusion' Throu!h smart strate!ic mana!ement decisions Nestle succeeded and ecame a multinational' Today" Nestle is still the lar!est #ood and nutrition company in the world in terms o# sales EK2 Fortunes in 2*1*G 1. Sources' Course te?t;s Nestle case' www.nestle.com' Nestle 2*1* (nnual 9eport' http7www.economist.comnode1<)B2' www.hoovers.com