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Lincoln school of business

MSc International Business

Module Title : Understanding International Bussiness

Module Code : BUS9032M

Module Coordinator

Dr. Mahfuzur Rehman

Assessment one

Nestle - Company Analysis

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Name: Hafiz Abdullah Tariq

ID : 28821496

Submission date:

Word Count: 1000

Nestlé S.A. is the world’s leading nutrition, health, and Wellness Company
based in Switzerland. It is the largest food and beverage company measured

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by revenue generating. Nestle sells 2000 different brands over 7 food and
beverage categories. The company’s main products are powdered and liquid
beverages; milk products, ice cream; confectionary, and pet care products. It
owns several major consumer brands such as Nescafé, Nestea, Nestle,
Purina, Kit Kat, and Vital, including many other prominent brands, and
according to Nestlé's mission statement, from dawn to dusk, our objective of
"Good Food, Good Life" is to provide customers with the greatest quality.

The company started from Junction as a milk company specializing

in child formula products and condensed milk products and has since
grown to be one of the largest transnational food companies and the clear
global leader in the sector in terms of earnings and profitability.

Nestle is one of the largest companies i in the fast-moving consumer

goods( FMCG) sector and is the request leader in several of the sector’s
requests, especially with earnings in consideration. The FMCG sector is
presently dominated by companies in the snacks, food, and potables
assiduity (Consultancy. UK, 2015). The company has seven verticals
including liquid and powdered potables, confectionary and eyefuls, ready-set
and braised foods, dairy products, chocolate, drinking water, and pet care.

For the company to succeed in such a largely competitive sector, it must

borrow effective marketing practices (Pride, Ferrell, Lukas, Schembri, &
Ninnies, 2015). Among the stiffest challengers facing Nestle are Procter &
Gamble, Kraft Heinz, Coca-Cola, Unilever, Kellogg’s, Danone and PepsiCo.

Nestle is a star, enjoying a large request share and a great occasion for
growth. In the pet care perpendicular, it's a question mark since Nestle has a
small request share of a high growth request while the water perpendicular is
a canine due to a low request share of a largely logged request that features
both transnational and original players in each of their target requests.

Nestle has a wide range of products in its colorful verticals in different stages
of the product channel (Immonen & Saaksvuori, 2008). In the liquid and
pulverized potables sector, Nestle has two main products in the powdered
potables request, Nescafe and Nespresso, with Nescafe being a cash cow
and Nespresso being a star. In ready-set and braised foods, the Maggi brand,
especially Maggi polls, is a cash cow while in the billions and dried food, the
Maggi brand is a star, with its major competition being the Knorr brand from
Unilever. In the chocolate perpendicular, tackle Kat and Munch are the main
products from Nestle falling in the star order given that although the

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competition is stiff, the request member has huge growth eventuality and
the company is in a position to increase both request share and profit.

The knowledge and sapience from BCG analysis are used in determining how
colorful external factors that can affect a business are to be handled to
minimize business pitfalls, influence arising openings, and gain better
sapience into the business terrain cost-effectively (Campbell, 2015).

The Nestlé Maggi controversy refers to a food safety issue that emerged
in India in 2015, when the popular instant noodle brand Maggi was found to
contain excessive levels of lead and MSG (monosodium glutamate), a flavor
enhancer, in some samples. The controversy caused significant damage to
Nestlé’s reputation and business in India. The company faced multiple
lawsuits, investigations, and fines. Nestlé also had to destroy thousands of
tons of Maggi noodles, and its sales and profits took a hit.

Legal factors have a veritably important bearing on the operations of

any business since it determines at the veritably least if a business can carry
out its operations in a given governance. Similar factors include licensing,
carrying colorful needed permits, auditing, and compliance with colorful
norms. also, businesses in the food assiduity not only have to misbehave
with rules and regulations that affect other businesses but also misbehave
with regulations set by other governmental and controlling bodies like food
and health safety laws and regulations.

Environmental factors can also be favorable or mischievous to a

business’s operations. Some of the factors like extreme rainfall conditions
can have an impact on several areas of business operations by making
inputs or transportation costs more precious, environmental regulations
affecting business operations for illustration in packaging, or affecting deals
as client preferences change with the rainfall.

The company has a wide presence in numerous countries and

regions, which means they have formerly been exposed to different
political, legal, and environmental factors of the regions they formerly
served. The company has shown its ingeniousness in dealing with
different profitable factors in colorful regions by offering small quilting in
lower-middle-income countries and combining both prestigious brands that
can command high prices with brands that contend on price depending on
request conditions.

Nestle competes in the highly competitive consumer food sector.

Nettle’s rivals include Kraft Foods and Group Danone. Kellogg’s, for example,

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is a strong rival in some items, such as morning cereal. Notwithstanding
being one of the industry’s largest firms with over 120 years of expertise,
Nestle faces competition from these brands. They have a substantial
market share (Dooley, 1997). The release of new merchandise is a major
occasion for all of these companies. All businesses in the industry must
battle to maintain market share. Nestle is up against some formidable rivals.

Buyers have a lot of negotiating power due to fierce competition. Nestle or

any other brand tries to influence the market or hike pricing.
Consumers have a cheap switching cost. Several firms offer comparable
items. Nestle appreciates the power of the buyer and seeks to keep its
customers happy. These features have helped Nestle gain consumer loyalty.
While investors and shareholders alike would hope that the company has
learned from its past mistakes and will remain scandal-free, this is unlikely.
Future controversies and potential litigation are quite damaging to the
company’s reputation and may be one of the most significant threats to the
business's continued success.

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Appendix 1

Strengths: Weakness:

 Nestle is one of the  The company has two

largest companies in the major weaknesses; legal
fast- moving consumer issues and Environmental
goods. issues.
 Child formula products  Increased prices due to an
and condensed milk inflationary environment.
products.  Maggi noodle’s
 Nestle has a wide range controversy.
of products in its  Social criticism.
colourful verticals in
different stages.
 Highly efficient and wide
distribution network.

Opportunity: Threats:
 Several opportunities can  High-level competition.
help Nestle increase its  They have a substantial
market share, revenue, market share (Dooley,
and in general business 1997).
operations.  High Bargaining Power of
 The company has a wide Buyers.
presence in numerous  Future Scandals.
countries and regions.
 The company has shown
its ingeniousness in
dealing with different
profitable factors in
colourful regions.

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  Partnership.

Appendix 2

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References:

https://strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis/

Aerk, D. A. (2009). Brand portfolio strategy: Creating relevance,

differentiation, energy, leverage, and clarity.

https://www.edrawmind.com/article/nestle-mission-and-vision-statement-
analysis.htm.

Campbell, P. (2015). Pestle analysis in a day. Create Space Independent

Publishing Platform.

https://medium.com/@david.kabii/nestle-market-analysis-and-marketing-
strategy-8bd2ffbd8acb

Consultancy.uk. (2015, August 17). 50 largest consumer goods / FMCG firms

of the globe. Retrieved from https://www.consultancy.uk/news/2453/50-
largest-consumer-goods-fmcg-firms-of-the-globe

Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive

analysis: Effective application of new and classic methods.

Immonen, A., & Saaksvuori, A. (2008). Product lifecycle management.

Pride, W. M., Ferrell, O. C., Lukas, B. A., Schembri, S., & Niininen, O. (2015).
Marketing principles.

Pruschkowski, M. (2018). The BCG matrix and its support of management

decision making.

Statista. (2018). Nestlé: sales worldwide by product category, 2017 |

Statistic. Retrieved from https://www.statista.com/statistics/413559/global-
sales-of-nestle-by-product-category

Dooley, L. (1997). Dynamics of business-government relationships: the case

of Nestle in Asia. In Government and the Food Industry: Economic and
Political Effects of Conflict and Co-Operation (pp. 345-353). Springer, Boston.
MA.

https://www.edrawmind.com/article2023/nestle-mission-vision-statement-
analysis/nestle-mission-and-vision-statement-analysis.emmx

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https://boardmix.com/analysis/bcg-matrix-of-nestle/

https://businessmodelanalyst.com/nestle-swot-analysis/

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