Comprehensive review of Big and Small firms 1

Comprehensive Review of Big and Small firms

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Comprehensive review of Big and Small firms 2

Introduction:

Today, the world we live in is continuously changing according to the needs of modern

times. Centuries ago, people were not very advanced; hence life was a tough challenge as well.

Now, the contemporary world has made life comfortable for everyone. Different businesses have

played an essential role in human development. The necessity and importance of business

companies have increased over time. The world is becoming a business hub with numerous small

and big companies operating in different regions of the world. The business also plays a vital

role in GDP development in many countries. Every day millions of companies for various

businesses register themselves worldwide. China is one of the fastest economically growing

countries, and every day almost ten to eleven thousand enterprises are registered in China

(Tradingeconomics 2020). Companies vary from size to size. Companies' success depends on the

company representatives' decisions and strategies and continuous advancements and innovations.

Large size companies offer more opportunities to people of society in contrast to small ones.

Whereas, small firms carry an advantage as they adopt change and innovations more rapidly and

are more beneficial than big ones. This paper's primary purpose is to comprehensively review

companies' strengths and weaknesses in their innovative activities.

Topic Review

The level of innovation and advancements in any company depends upon the size of the

company. Any company development is dependent on the workplace environment. This gives

the employees motivation to work with their best latent capabilities for the success of the

company. The company development is necessary as it works parallel to the country's

development. More the successful companies in the country, the more the opportunities,
Comprehensive review of Big and Small firms 3

ultimately resulting in more significant revenue generation. According to different surveys, the

United Kingdom alone has forty-one million two hundred and forty-eight thousand officially

registered companies operating in other locations (Tradingeconomics 2020).

Continuous Growth and advancements are among the main focuses of large and small

firms after their establishment. The small firms try to get more prominent, and large companies

make efforts to be enormous (UKEssays 2018). Companies can be classified into large and small

firms based on different factors, such as the employee count, turnover, and total balance sheet.

Innovation and advancement are essential for the company to keep shining like never before.

Innovation in any company is entirely dependent on its size and scale of operation. The

innovational input increases with the company's scale, as it takes a long time for big companies

to adopt new ways and techniques in the interest of being more productive. There can be

multiple issues regarding innovation of any business, e.g., firm-specific, methodology,

contingencies, etc. (Plehn-Dujowich 2009). 

This essay's primary research purpose is to review large and small companies' strengths

and weaknesses comprehensively. The big companies have considerable benefits and strengths

regarding their innovation activities. The big companies struggle to adopt any change or

innovation in their company. In large corporation companies, professional managers control

complex organizations through various corporate technology strategies. The large companies are

observed and managed by risk-averse accountants, while managers become bureaucrats.  There

are particular strengths and weaknesses of large companies in their innovation activities.  

One of the main strengths of large companies regarding innovation is their management

board is filled with skilled and experienced persons. They have specific formal management
Comprehensive review of Big and Small firms 4

skills required to implement any change or any innovative idea. Large companies usually attract

and hire professional people and provide many more opportunities than small ones. One of the

main strengths of large firms is that they can open new research and development Laboratories

on a large scale. The research and development laboratory can help big firms to take advantage

of economic scales in the R&D sector. Large companies have skilled employees who can adopt

any change regarding work strategies and cope with the modern world's needs. Large companies

have the time and resources to spend on innovations and new products. One of the vital strengths

that large companies carry is that they have a reputation attached to their name because of their

already existing products in the market. Any new innovative product will not face significant

acceptance challenges because of the brand name. Furthermore, big firms' innovation enables

them to remove any entry barrier that they might have and improve their company name in the

market (Vossen 1998).

Big firms have many strengths that may leverage the innovation, but they also carry

weaknesses that may affect the company name in the market. Sometimes innovation can have

absurd effects in large firms, e.g., it can spread risk over a vast portfolio of products.

Shareholders can put pressure on short term profits from products, which can be an obstacle in

achieving the long-run benefits of innovation. The innovation needs to be effective to become

the necessity of modern times; otherwise, it will end up spending a massive amount of money on

something unfruitful. Sometimes there can be no guarantee on investment return because

everything needs to be precisely accurate in making the new product successful in the market. If

anything goes wrong during innovation, it can cost large companies a colossal downfall as they

spend many resources and time on it(Vossen 1998). 

Comprehensive review of Big and Small firms 5

In contrast, small companies possess many strengths and few weaknesses in innovation

activities. Small companies have little bureaucracy in their workplace, and they can make quick

decisions as most of the decisions are made by a single individual, i.e., the owner. If the owner

finds the need for innovation and improvement in the company, he can make a quick decision

and implement new changes and plans without facing much problems. Another utter strength of

small companies in innovation activities is that the employees are incredibly motivated to make

their company prominent for generating significant revenue. Innovation in small companies can

give them the advantage of dominating narrow niches markets. They have little risk on their

existing products, and new product designs can attract shareholders to invest money for the

company's future. One significant strength of small firms is that they can adopt new strategies

and change swiftly because of the remote dedicated workforce (Vossen 1998).

Small companies carry many strength factors, but they also have some obstacles in

adopting innovation. Small firms have fewer and limited resources to spend on new products and

innovation. They often have no or a limited number of shareholders with limited money

resources to spend on new products. One of the weaknesses of small firms is that if new

innovative products fail to succeed in the market, it can result in the company's end. Small firms

lack the research and development sector to design the new product according to modern world

needs. By coping with its shortcomings, small companies can make a big difference in small

niches market and economy(Vossen 1998)

Critical Analysis

Innovation in any company depends on the management strategies that leverage the

company's strengths and weaknesses. Many companies worldwide try to adopt change, but they
Comprehensive review of Big and Small firms 6

fail miserably because of poor experience and management strategies. Large companies have the

opportunity to redesign themselves to bring something new to the market. Because of the

existing products in the market, they carry an advantage in innovation. Large firms also provide

an inviting opportunity for professionals around the globe to work on their new ideas with proper

resources without any decrement.

Nestle is a multinational company operating worldwide. It is famously known for its

largest food and beverage chain around the globe. Nestle is currently working in one-hundred

and eighty-seven countries with two hundred and ninety-one thousand workforces. Nestle is

committed to unlocking the power of food to enhance the quality of life for everyone. Nestle

uses a shared value approach to face challenges during its operation. The shared value approach

creates a positive impact for shareholders and society around the globe. Today, nestle is the

world's largest, most diversified food and beverage organization. Nestle has earned the trust of its

potential customer market by delivering sustainable products with industry-leading financial

performance(Nestlé 2018).

Multinational companies like Nestle provide professionals with an excellent opportunity

to redesign the company or product in new ways. Nestle realizes that the world is changing, and

so are customer needs. With the small, fast-moving start-up opening, it has become a challenge

for Nestle to stay alive and lead the market. Nestle has got an edge because of its one-hundred

and fifty-year-old history filled with success and achievements because of their ability to

anticipate consumer trends while strategically innovating for the future. The innovation

management strategies of Nestle have enabled them to thrive in the market with high-quality

products. Nestle has been subjected to innovation over the course of many years. It identifies
Comprehensive review of Big and Small firms 7

customers' needs and potential customer market and targets the market with the required product

(Nestlé Global 2019).

One of Nestle's primary reasons for its rapid market growth is its ability to develop

innovative management strategies concerning its research and development capabilities. Nestle

invests 1.7 billion U.S. dollars every year in the research and development section to boost its

growth with new high-quality products. The total amount invested in research and development

gave them the advantage of bringing new products according to their needs and an edge over

their competitors. None of Nestle's competitors spend this much revenue on R&D, and this is

why Nestle always lands in the market with a new and useful product for everyone. Nestle uses

different marketing environment strategies to figure out various factors associated with the

product's success that is to be launched. Another factor that leverages Nestle's strength is that

they have around five thousand people working on global research to develop innovative

management strategies. Nestle's strength in spending a huge amount of money on the research

and development sector enables them to build innovation management strategies by creating a

new mindset with the help of internal start-ups. This internal start-up allows the scientist to think

like people in business and entrepreneurs to explore novel ideas that lead to groundbreaking

discoveries. Nestle collaborates with different organizations, start-ups, and innovation partners

across the globe to make their innovations successful and strengthen their abilities to develop

various management strategies (Nestlé Global 2019).

Nestle believes that innovation is the key to leadership. Being able to realize the

importance of innovation, nestle reorganizes its research and development capabilities to

strengthen its innovation abilities further. The company plans to integrate its two research units,

i.e., Nestle research center and Nestle Institute of health sciences, into one to build a more
Comprehensive review of Big and Small firms 8

powerful and impactful organization. The new Nestle's research center consists of three research

centers. The combing of these research centers will take the Nestle R&D section to another level

and will be beneficial for the company in the long run. The new combined research center will

push innovation to maximum boundaries by researching the complicated relationship between

nutrition and health and converting it into business terms to earn a maximum profit while

enhancing the quality of food and life for everyone. The primary focus of recent Nestle's

innovation drives included reducing sugar, salt, and saturated fat content and increasing positive

potential nutrients to improve food quality (Askew 2018). By embracing innovation and

developing a new research center, Nestle increases its annual sales. The sales report of 2019

quoted Nestle made $94.6 billion from the total sales of the year 2019 (Tyler 2020).

Another factor that leverages Nestle's strength is its ability to transform ideas into useful

products and items swiftly using fast prototyping. Nestle develop different strategies to increase

their speed in the development sector. The idea of a new product is great, but the most important
Comprehensive review of Big and Small firms 9

thing is the opportunity to convert dreams into reality and how fast the work is done to provide

the market with something new. Nestle has developed different innovative management

strategies to cope with the production time of new products. It uses a fast prototype strategy to

launch new products quickly. The fast prototyping strategy also focuses on maintaining the

product's quality as Nestle is known for its high-quality food items. The fast prototyping strategy

helps Nestle bring new products quickly into the market and leverages its size and scale for quick

in-market testing. The innovative production time management strategy has helped Nestle

introduce more than fifteen-hundred new products globally over a time period of a year. Nestle is

famous for coffee worldwide, and Nestle's skilled staff launched the new Nescafé Azera Nitro in

less than fifteen months. Later, by using different technologies like 3d printing, certain

improvements and advancements were made in the product. This new fast prototype strategy

addresses Nestle's strength as it has enabled Nestle to stand out in the market with high-quality

products (Nestlé Global 2019). The rapid production of high-quality products empowers Nestle

to strengthen its position in its competitors' global market.

Nestle's 2019 organic growth across various product categories(Tyler 2020).

Comprehensive review of Big and Small firms 10

Over the past few years, nestle has established its name in the market by gaining the trust

of millions of its customers worldwide. Nestle always stand up-front for understanding the

customers' needs and trends. Nestle uses different innovative strategies to understand customers'

needs and tastes before anyone else and adjust its portfolio accordingly. By understanding

customers' new needs, nestle invests in new brands to offer different products in different regions

of the world. Nestle's approach to the market is different from its competitors; it continuously

changes the innovation model to reach its customers quicker (Nestlé Global 2019).

Another successful building point of Nestle is its innovative value creation model that

helps straighten the company's strategies. Nestle believes in the good food good life motto and

aligns its procedure according to it. Nestle aims to offer a vast range of portfolio of products that

evolve with customer's needs. The innovative value creation model reveals its strengths to

operate on a large scale and lead the market with high-quality products. The innovative value

creation strategy has enabled Nestle to expand its business in many other start-ups too. Nestle

invests in high growth categories and geographies. The strategic plan includes investing in many

different business sectors like E-business, Premiumization, and Direct-to-consumer. The

innovative strategy to invest in these businesses proved a fruitful point for Nestle as it was able

to increase its sales by up to 18.5%. The sale increase proved beneficial for Nestle as now they

stand at the higher end for the food and beverage industry. The premium offerings represented a

total of 26% of sales and increased by 7.4% in 2019. The direct to consumer service helped

Nestle increase its sales by 4.6% by the end of the year(Nestlé Global 2019). This explains that

the company is taking many advantages from innovation in strategies, and it also explains the

company's ultimate strengths. The E-business of Nestle has helped it generate a great source of
Comprehensive review of Big and Small firms 11

revenue by increasing the sales share over the past few years, which can be analyzed with the

help of graph states (Statista 2019).

Group share sales of Nestlé's e-commerce worldwide from 2012 to 2019 (Statista 2019).

Nestle endorses innovation and tries to redesign its strategies in every way possible. The

reason behind Nestle's years of success is its price-related strategies. The company has developed

various strategies related to cost management while keeping the efficiencies to maximum levels.

The method enables Nestle to mark the reasonable price for a certain product and reinvest in its

innovation and brand name building. The cost management strategy enables Nestle to design the

entire structure of a new product from the production and distribution phase with a reduced price

and increased operational efficiency and performance. The cost management strategy explains

the company's strength to introduce new high-quality products with a reasonable price range to

entertain its customers (Nestlé Global 2019).

Comprehensive review of Big and Small firms 12

The value plan of Nestle focuses on to allocate capital prudently. Nestle invests in

products that have long-term profits and development chances. This increases shareholder

returns on investments and establishes their trust in the brand name. Nestle's management and

innovation strategies enable it to develop new products to expand its business in food, beverage,

and other nutritional health products. The capital allocation strategy of Nestle allows it to invest

in growth drivers. One of Nestle's creation plans' primary focus is to return cash to shareholders

to strengthen the bond between the shareholders and the company. Finally, the ultimate goal of

creating a value plan is to enable people to live a healthy and happy life by developing powerful

communities with strong supply chain networks(Nestlé Global 2019).

Nestle continuously go through product evolution, innovation, acquisition, and

partnership to shine in the market like never before. Nestle has been successfully performing in

the market and is especially known for its baby products. Nestle's growth strategy is different

from its competitors. It uses three basic growth strategies, i.e., transnational, localization, and

customization. Nestle possesses many strengths that are addressed through innovation

management strategies in the competitor's market. The strengths and weaknesses of Nestle

regarding their innovation activities can also be analyzed by SWOT analysis. Nestle's dominant

geographical presence in the world is an utter strength of the company as it contains broadened

revenue sources. Nestle is known for introducing new products without much gap between them,

and it has become an exceptional strength of the company. There are many reasons behind

Nestle's success of one-hundred and fifty years, and the prominent factor behind success is their

efforts for environmental sustainability. But there are some weaknesses of the company as well

because nothing is entirely perfect in this world. Nestle has faced criticism from the world for

using water in huge amounts. The company has often been accused of selling contaminated
Comprehensive review of Big and Small firms 13

products as well, and rumors are there that Nestle uses ethical practices for building the brand

name. The company has been involved in the Maggi controversy a few years back and has faced

legal and consumer issues regarding many products (Jurevicius 2017). Still, Nestle has coped

with every critical situation to stay alive in the market and has gained the trust of millions of

people across different regions of the world. The diversity of food has bought a massive change

in the market, and Nestle stands among those providing high-quality food to its customers to

improve life quality.

Conclusion

A business's success depends on its representatives' ability to make certain decisions in

the time of need and develop the company workplace environment to build up its strengths and

remove its flaws. Innovation can be very hand in the competitive world as the new product often

attracts new potential customers(‌UKEssays 2018). Nestle's innovation plans have opened up

many opportunities for many people worldwide and have helped the brand grow swiftly. Small

firms can take greater advantages of innovation. Without change, it is impossible to survive in

this modern world, and the market leaders know the importance of innovation in the workplace.

So, every business needs to develop innovative strategies to stay alive in a thrilling business

market.
Comprehensive review of Big and Small firms 14

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Comprehensive review of Big and Small firms 15

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