Nestle Corporation: Strategic Audit in the Areas of Strategy Analysis Formulation and Implementation

Nestle, an international recognized multinational corporation is the world’s leading nutrition, Health and Wellness Company. Nestlé’s mission of “Good Food, Good Life” aims at providing customers with the finest quality of nutritional choices within a wide range of food and beverage classifications (NESTLÉ - Vassos Eliades. (n.d.). Retrieved from http://www.vassoseliades.com/consumer-goods/nestle.html, para. 1). The merger in 1905 between Nestle and the Anglo-Swiss Milk Company created the Nestle we know today. Nestle is one of the world’s largest suppliers of food and nutritional products operating with 461 factories in 83 countries, with 328,000 employees worldwide (Fries, Lorin, Goldberg, Ray, 2012. Nestle: Agricultural Material

The first and the foremost thing that Nestle should do is to educate the audience about what wrong has been done through television and newspaper advertisements and active communication with the consumers through media. They can’t remain conservative at this point and need to reply to media. Only through this can they salvage their image.

As aforementioned, Nestlé is the leading company in nutrition, healthcare and wellness, offering nutritious products for every moment and age. It is the largest food and beverages conglomerate in the world, with a portfolio covering almost every food and beverage category, providing consumers a multitude of products to choose from.

Here are some the common challenges which all the organizations face around the world and Nestle Bangladesh Ltd is also facing all of these challenges more or less.

This section presents a SWOT analysis to review the micro environment of the firm reflecting specifically upon the strengths and weaknesses of Nestlé and the opportunities and threats the firm must respond to through an alignment of firm strengths to such forces. A SWOT analysis is often used, as a strategic tool to allow a presentation of the firm’s resources and capabilities, which can be further, developed to aid competitive advantage. A SWOT analysis therefore underpins the development of future strategic options.

Over 700 products renovated or innovated in the past five years, with wellness in mind.

Since then the company has continued to flourish; mergers and acquisitions, global investment and product innovation have seen Nestlé position itself as a “global leader in Nutrition, Health and Wellness” (Nestlé, 2015) and, according to Forbes (2016), it is the largest company within the food industry and the 33rd ranked company on the Global 2000 (Forbes, 2016). Whilst renowned for chocolate, it did not become a global leader on the strength of one product. Its portfolio includes, baby food, beverages, frozen food, prepared dishes and healthcare nutrition. Food and beverages in particular have been prevalent in the aggrandizement of the corporation.

Resources are the source of the firm’s capabilities. Resources are bundled to create organisational capabilities. Some of a firm’s resources are tangible and intangible. Tangible resources are assets that can be seen and quantified. Intangible resources include assets that typically are rooted deeply in the firm’s history and have accumulated over time. Intangible resources are relatively difficult for competitors to analyse and imitate. The four types of tangible resources are financial, organisational, physical and technological. And the three types of intangible resources are human, innovation and reputational (Hanson, D., Hitt, M., Ireland, R. D., & Hoskisson, R. E., 2011, pp. 75-78).

Rob Carpenter senior manager at a prestigious accounting firm, recently transferred to the international division of acquisition and mergers. Mr. Carpenter was recently asked to make a recommendation regarding Nestle. Mr. Carpenter unfamiliar with the accounting in Switzerland has realized substantial differences between Swiss and U.S. accounting standards. Surprisingly, there are many “unnecessary” details in

Nestle is a swiss multinational food and beverages company. Its headquarters is located at vevey, Switzerland. In terms of revenue it is largest food company in world. Nestle produces the portified products such as baby food ,bottled water ,breakfast cereals ,coffee ,tea ,dairy products ,ice cream ,frozen food ,pet foods ,and snacks .Nestle provided 167 billion servings of fortified products .Among them 29 brands of Nestle are getting turnover of $US1.1 billions. Nestle is one of main shareholders of L’OREAL company, the worlds largest cosmetic company.

Value Chain Analysis describes the activities that take place in a business and related to the business core competencies. It can classify by primary activities and supporting activities.

According to me Nestle have only focus on the economic responsibilities and has been concern about the shareholders acceptations than the society. There is a wide space for improvement in the company’s policies towards society and environment.

The articles have been focused on Nestlé’s performance for its different kinds of products that have been declined its target profits. Therefore, Nestle has set up a margin goal that will help the world’s largest food package company to regain its expecting profits. It is mentioned that, the company has slowed down its growth in the different marketplace in which some products need to improve its performance according to analysis from various sources, such as RBC analyst James Edwardes Jones, and UBS analyst Pinar Ergun. According to the articles, the investors are arguing for a change of their investment for nestling in which the new CEO Mark Schneider must act

The purpose of this report is to evaluate Nestle Company industry based on the case study and comprehend how the company develop strategic intent for their business organisations following the analysis of external and internal business environments. I will analyse the strategic management process as firm used to achieve strategic competitiveness and earn above-average returns. I will discuss the strategy formulation that includes business-level strategy and corporate-level strategy.

Thomas M. Idzorek, CFA Director of Research Ibbotson Associates 225 North Michigan Avenue Suite 700 Chicago, Illinois 60601-7676 312-616-1620 (Main) 312-616-0404 (Fax) tidzorek@ibbotson.com