Nestle Sa - Nutrition, Health and Wellness Strategy [PDF]

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Case Analysis Nestle SA: Nutrition, Health and Wellness Strategy Strategic Management MBA

I. SUMMARY One of the biggest and largest food and beverage industry in the world from US and well known from other countries. Nestle was became the role model of other competitors to be like or to be with the company ambitious vision and strategy by offering Nutritious, Healthier, and Wellness products and services to the people around the world. With the initiative of CEO and Chairman Peter Brabeck the Nestle Company became stronger foundation in market competition through the acquisitions of some leading industries that offered products inline to their NHW strategy and with continue investing in Research and Development for betterment of the products and services to customers. In 2007 Nestle announced the positioned or role for CEO and Chairman should be split, having achieved its strategic goal and becoming the foremost nutrition company in the world. That Mr. Paul Bulcke, a long-time Nestle employee and former head of Nestle American Business appointed to be the CEO while Mr. Peter Brabeck retained as chairman. There are many changes and innovative decision made with the management of the two personnel in continue growing of the company vision. II. PROBLEM STATEMENT How can the Nestle Company engage the long term strategy after achieving the NHW strategy with the increased competition in food and beverage industry?

III. OBJECTIVES 1. To support the long term strategy of the Nestle Company. 2. To sustain current market positioning of the Nestle Company. 3. To come up new innovative decision or strategy of the Nestle Company. 4. To increase the profit margin of the Nestle Company.

IV. AREAS OF CONSIDERATION

STRENGTHS  

The world’s largest food company in terms of sales with $116.62 billion in 2010 They have employed 280,000 people and marketed products in 130 countries

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They have manufactured over 10,000 different products Its largest 29 brands, each generating at least $ 1 billion in revenue, drove 70% of the firm’s sales in 2010 Research and Development Departments are well-funded and supported by the management in developing new nutrition technology. Strong conviction and focus in providing nutrition, wellness and health to its customer.

WEAKNESSES     

Expensive cost for launching their product brands Costly for Research and Development for the company Timely for getting information from their customers Uncontrollable supplies in the market with the high in demand products Some consumer thinks that the company is contradicting its vison by having significant holdings in some “indulgence” categories.

OPPORTUNITIES     

Acquiring other competitive company that offered NHW products and services Coordination with the government health agencies Expansion of the market location to some country with potential markets Engage to online company or e-business company for selling their products Be the first company to provide its customers a product that could help prevent or even threat some chronic ailments.

THREATS    

Increasing number of competition in the beverage and food industries Increasing the price of raw materials/ingredients in the market (Inflation Rate) Government intervention in increasing the tax rate for the goods Government intervention in terms of rules and regulations in other country

V. ALTERNATIVE COURSES OF ACTION ACA 1: The Nestle Company should continue adopting their current strategy for NHW and by acquiring more leading food and beverage company that are inline to their vision and mission and deeper their investment for Research and development PROS:  Increase the profit margin of the company  Growing the company profile

   CONS:      

Maintain the standing of the company portfolio Expanding the needs of the market for NHW Continuous improvement of the company without shifting its visions. Competitors are slowly adopting their product in the health and nutrition needs of the consumers Not all leading company have the same firm stand about NHW Other company demanding higher payments or amount for the acquisition Some company might be same strategy offered but contradict with other aspects in terms of the co mpany vision and mission Costly for the company to launching new brands No assurance the market positive accept the new products in the market place

ACA 2: The Nestle Company should improve more their company Vision as to be the leading NHW food and beverages in the world rather by offering best products, safe, quality and optimal nutrition in addition to NHW. PROS:  The company become more effective for having wider vision to achieve  The company can fit more their vision to some leading company offer other products but the same strategy on NHW  The company would engage more on innovation to have better vision and mission toward their strategy CONS:   

It takes time for the company to think for the best vision considering other factors affected on it Sometimes the company contradicting with their current products and services offered Timely for the company to adjust and make changes with other products just to fit for their vision

ACA 3: The Nestle Company should improve more their marketing strategy by giving clear information to their customers about the NHW of their products and keep on innovating their products offered in the market PROS:  Increase consumer awareness on the benefits does Nestle products has to offers.  Increase the Value of their products and the company profile  Give more competence to the company to penetrate the wide market value chain CONS: 

Additional expense for the company in investing in expensive marketing strategy

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Some of the customer might be switching to other products because of the high pricing Increasing the price of the goods in the market due to additional expense in marketing No assurance if the market wants the new products offered in different market with their culture

VI. RECOMMENDATION Nowadays, consumers are far more concerned about everything from food ingredients, genetically modified food to organic foods than previous generations. Indeed, an obsession with healthy and clean eating seems to be the order of the day, this is why we recommend ACA 1 as the best course of action, that the Nestle Company should continue adopting their current strategy for NHW and by acquiring more leading food and beverage company that are inline to their vision and mission. With the current standing of the Nestle Company they really performing well in terms of profit margin and positioning in the marketplace for being the leading NHW food and beverage company in the world. However, they would not limit/stop their acquisition to some leading companies but they still need to acquire more reputable companies that are offering other products but with almost the same strategy for NHW. In order the Nestle Company grow more and offer more products to customers with the safe, quality, and optimal nutrition in addition to NHW. VII. ACTION PLAN PARTICULAR

PERSON INVOLVES

TIME FRAME

Review the current company market positioning in the marketplace and financial standing

Management Dept., Marketing Dept., and Treasury Accounting Dept. All department head representative, CEO, Chairman, Board Directors and members, and the President CEO and Chairman

1 to 2 weeks

Conduct meeting for the updates of company portfolio, market share, and other importance matter in connection with the current company strategy NHW Discuss the present and future plan for the company in continue adopting the NHW strategy and deepen investing for the Research and Development Seeking for budget approval for some expenses to be use on achieving the company plans Survey potential food and beverages company can be acquire or partnership

Marketing Dept. and Treasury Accounting.

1 to 2 weeks

3 to 5 days 3 to 5 days

Head of the marketing 2 to 3 weeks Department and colleagues Proposed the potential competitive company in food Marketing 2 to 3 days and beverages with their different products offered in Department Head, the market that can acquire by the Nestle Company CEO, and Chairman align with their strategy NHW

Make an agreement between the acquisition company with the agreed policies of the Nestle Company Undergo process for identifying and research development for the acquired company that can passed the standard of Nestle Company with their strategy NHW Launching the new brand acquired by the Nestle in the public and dispose the different products in the marketplace Monitoring and enhancement the performance of the new acquired products by Nestle Company in the marketplace

CEO, Chairman, and Head of the Compant

3 to 5 days

Research and Development Department

2 to 3 weeks

CEO, Chairman, 3 to 5 days President, and Head of the Marketing Dept. Management dept., Upon implementation Marketing Dept., and Treasury Acctg. Dept.

VIII. POTENTIAL PROBLEM ARISING The Nestle Company might be find difficulty in looking for some leading businesses that offered same strategy NHW and they cannot easily make closing deal immediately considering to the demand of pricing for their brands of the company. And due to the rapid increase of companies that offers a nutritious and healthy products considerable percentage of consumers are less than convinced that the food health information they receive is accurate.