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UNIVERSITY OF MUMBAI

SUBJECT: STRATEGIC MANAGEMENT

PROJECT TOPIC:
“SELECT A COMPANY AND EXPLAIN THE
CONCEPT, BENEFITS AND RISKS OF STRATEGIC
MANAGEMENT”.

Class: F.Y. M.COM BUSINESS MANAGEMENT (SEM II)

ACADEMIC YEAR: 2021-2022

SUBMITTED BY
ARNAV BOTHRA
ROLL NO – 015
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Table of Contents

Topic Page number

Chapter 1: Executive Summary 3
Chapter 2: Introduction 3
Chapter 3: Company Profile 4
3.1 History of Nestle 4
3.2 Nestle’s Mission & Vision 6
Chapter 4: Macro Environmental Analysis 6
Chapter 5: Industry Analysis: Porter’s Five Forces 8
Model
Chapter 6: SWOT Analysis 9
Chapter 7: Critical Success Factors of Nestle 11
Chapter 8: Evaluation of Nestle’s Business Strategy 12
8.1 Nestle’s roadmap to Good Food, Good Life 12
8.2 Business Principles 13
8.3 Sustainability of Competitive Advantage 14
Chapter 9: Major Strategic Issues Faced by Nestle 16
Chapter 10: Recommendation 17
Chapter 11: Conclusion 17
Chapter 12: Bibliography 18
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1. Nestle’s Executive Summary

This report is prepared to analyse the strategy of the Nestle Company 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.
It also aims to identify marketplace opportunities and threats in the external environment and
to decide how to use their resources, capabilities, and core competencies in the firm’s internal
environment to pursue opportunities and overcome threats. To strengthen this assignment
about Nestle, there are several methods of gathering data has been conducted, such as
PESTLED analysis, Porter’s 5 forces model and SWOT analysis.
By the end of this assignment, future strategy, and my recommendations are mentioned about
Nestle that will fit into strategic orientation to perform better in their business world.

2. Introduction

Nestle has been serving this world for over one hundred and thirty years. It has differentiated
itself through its high-quality product mix and positioned itself as health and Nutrition
Company while targeting the health-conscious people throughout the world.
The most important thing for a business company is an understanding of their successful
performance among the other competitors in marketplace. For some parties, like
shareholders, it is essential for company to make a profit and gain above-average returns. In
this assignment, I will discuss furthermore about Nestle’s external environment in all aspects
such as their general environment, industry environment, competitive environment, and scan
the opportunities and threats of the company. And I am going to explain briefly about their
internal environment includes their resources, type of their resources, company’s capabilities,
evaluate their core competencies and so on.
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3. Company Profile
Nestlé - the world's largest nutrition, health, and wellness company, not only in terms of its
sales but also in terms of its product range and its geographical presence: Nestlé covers
nearly every field of nutrition and food business: infant formula, baby food, milk products,
chocolate and confectionery, instant coffee, ice-cream, culinary products, frozen ready-made
meals, mineral water etc. Nestle is also a major producer of pet food. In most of these product
groups and in most markets, Nestlé is the leader or at least a strong number two. Nestle is a
much-focused Company, with more than 94 percent of the sales coming from the food and
beverage sector.
Nestle is present around the globe, on all continents, with around 230,000 people working in
more than in 84 countries with 466 factories and with sales representatives in at least another
70 countries. Many of their brand names are familiar to almost everyone: NESCAFE, NIDO,
MAGGI, POLO, MILO, KITKAT, KOKO KRUNCH Some of their products have broken
records: 3000 cups of Nescafe are consumed every second. And Kit Kat merited an entry in
the Guinness Book of World Records as the world's best-selling chocolate bar with418 Kit
Kat fingers eaten every second around the world!

3.1 History of Nestle

1866-1905
In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable to
breastfeed. His first success was a premature infant who could not tolerate his mother's milk
or any of the usual substitutes. People quickly recognized the value of the new product, after
Nestlé's new formula saved the child’s life, and soon, Farine Lactée Henri Nestlé was being
sold in much of Europe.

1905-1918
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s,
the company was operating factories in the United States, Britain, Germany, and Spain.
World War I created new demand for dairy products in the form of government contracts. By
the end of the war, Nestlé's production had been doubled.

1918-1938
After the war Government contracts dried up and consumers switched back to fresh milk.
However, Nestlé's management responded quickly, streamlining operations, and reducing
debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the
Company's second most important activity.

1938-1944
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Nestlé felt the effects of World War II immediately. Profits dropped from $20million in 1938
to $6 million in 1939. Factories were established in developing countries, particularly Latin
America. Ironically, the war helped with the introduction of the Company's newest product,
Nescafe, which was a staple drink of the US military. Nestlé's production and sales rose in
the wartime economy.

1944-1975
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth
accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings
and soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and
Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974.

1975-1981
Nestlé's growth in the developing world partially offset a slowdown in the Company’s
traditional markets. Nestlé made its second venture outside the food industry by acquiring
Alcon Laboratories Inc.

1981-1995
Nestlé divested several businesses 1980 / 1984. In 1984, Nestlé's improved bottom line
allowed the Company to launch a new round of acquisitions, the most important being
American food giant Carnation.

1996-2002
The first half of the 1990s proved to be favourable for Nestlé: trade barriers crumbled, and
world markets developed into integrated trading areas. Since 1996, there have been
acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina
(2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé
merged its U.S. ice-cream business into Dreyer's, and in August, a USD 2.6bn acquisition
was announced of Chef America, Inc.

2003 +
The year 2003 started well with the acquisition of Mövenpick Ice Cream, enhancing Nestlé's
position as one of the world market leaders in this product category. In 2006, Jenny Craig and
Uncle Toby's were added to the Nestlé portfolio and 2007 saw Novartis Medical Nutrition,
Gerber and Henniez join the Company.
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3.2 Nestle’s Mission & Vision

Corporate Mission:
At Nestlé, we believe that research can help us make better food so that people live a better
life. As consumers continue to make choices regarding foods and beverages they consume,
Nestlé helps provide selections for all individual taste and lifestyle preferences. Research is a
key part of our heritage at Nestlé and an essential element of our future. We know there is
still much to discover about health, wellness, and the role of food in our lives, and we
continue to search for answers to bring consumers Good Food for Good Life.

Corporate Vision:
Nestlé has an aim to meet the various needs of the consumer every day by marketing and
selling food of a consistently high quality. Good Food is the primary source of Good Health
throughout life. We strive to bring consumers foods that are safe, of high quality and provide
optimal nutrition to meet physiological needs. In addition to Nutrition, Health and Wellness,
Nestlé products bring consumers the vital ingredients of taste and pleasure. Confidence that
consumers have in our respected brands, is a result of our company’s many years of
knowledge in marketing, research, and development, as well as continuity – consumers relate
to this and feel they can trust our products. The objectives are to deliver the very best quality
in everything we do, from primary produce, choice of suppliers and transport, to recipes and
packaging materials.

4. Macro Environmental Analysis

Political/Legal Environment:
Political factors are important especially in food industry. The company policies are affected,
and its budget is also affected. Nestlé provide food assurance to provide assurance to the
consumers that Nestle’s products are manufactured, imported, and distributed under the
strictest hygienic and sanitary condition. Besides that, to ensure that consumers do not buy
any fake products, Nestle’s products are always come with the seal of guarantee. By having
the seal of guarantees, consumers are now more confident and trust of Nestle’s products.
Strict quality control played a role in political factor too. It means that Nestle’s products
quality will not be different with other countries. Consumers are guarantees with full
satisfaction of the products all over the world.

Economic Environment 
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Although Nestlé is leading food industry, it shares its knowledge and expertise with local
small and medium companies. It helps entrepreneurs to compete in the new free trade
environment which will ultimately benefit the industry and the economy by making
the market growth. Besides that, Nestlé also collaborates with local government to provide
technical assistance to farmers in planting and harvesting crops. The farmer will get income
and Nestlé will get to purchase good and fresh raw materials to produce their food. By having
own local productions, Nestlé should no longer needs to import any raw materials from other
country where they will save much more money. It will also benefit the consumers whereby
consumers could enjoy the local productions with low price. More consumers will use this
product and therefore Nestlé will gain more profit from that.

Socio-Cultural Environment:
A good diet and adequate food supply, the central for promoting health and well-being is the
focus of every person even these days; whether people tend to value products that incorporate
with them healthy benefits. Obviously, these types of goods are preferred more than that of
junk foods and its relative products. Moreover, generation Y cohorts, those born from 1980s-
2000s, possess characteristics such as acceptance to change and being technologically savvy.
These kinds of characteristics should coincide to the firm’s aggressiveness of using
technology especially that this is also the tie of the influx of technology in Europe.

Technological Environment:
Internet and Mobile Technology is currently growing so rapidly in the market where almost
all of the people nowadays will get contact with it. Nestlé could use this advantage to benefit
them by using technology to promote their products over those advanced technology.
Customer could get any information from their site. Nestle’s employees could use this
internet service to connect to its industry in other country such as Australia, Singapore, U.K
and more. They did research and development by using the technology to find more
information to satisfy the local tastes and cultural flavours in each country market. By
understanding what each country asks for, Nestlé could market difference product according
to the customer demand in difference country. It is already proven that the technology factors
are important for Nestlé Company.

Global Environment:
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Nestlé Company improves their operational efficiency by integrating the company’s

businesses on a global scale. They are now transitioning to become a genuinely global food
company, to behave as one. Nestlé has a dynamic global network of Nestlé R&D centres
working on scientific research and product development. They have the world’s largest food
and nutrition research organisation, with about 5000 involve in R&D. Nestle’s global R&D is
applied locally to meet different consumer needs and preferences through over 300
Application Groups worldwide.

Demographic Environment:
Nestle’s product is for everyone. People from any area, any culture, any age, and income will
drink water. It is not any luxury item which is used by specific people. Nearly all age from
young to old people can produce Nestlé. And all six continents are their customer. For
instance, Nestlé segment into different of age. For baby, they have Nestlé baby foods while
young people can drink Milo, Nescafe or eat ice cream, chocolate, and cookies. In Vietnam,
Nestle has the Maggi brand with many kinds of Asia sauce, but Maggi do not exist in
England because of the different in the geographical taste.
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5. Industry Analysis: Porter’s Five Forces Model

The intensity of industry competition and an industry’s profit potential are functions of five
forces of competition. Porter’s Five Forces Model was created to act as a framework for
industry analysis and business strategy development. Porter singled out five different forces
that impact competitive intensity which portrays an image of the overall attractiveness and
profitability of a market.

Threats of New Entrants:

The food processing industry is very large and competitive. It is uncommon for firms within
the industry to do quite well. As a result, many companies enter the market every year to gain
a portion of the profitable market. For Nestle, the company luckily has been around for over a
century and boasts a long history of quality products and consumer satisfaction, which has
allowed the company to obtain a considerable share of the market. As a result, new entrants
into the industry must attempt to seize a portion of Nestle’s market share to survive.
Essentially, Nestlé is constantly a target, and so the threat of new entrants is moderate.

Threats of Substitute Products:

Due to the nature of the industry, Nestlé is afflicted with the threat of substitute goods.
Ranging from ice cream, frozen foods, and confectionaries to pet food, there are arrays of
similar products that compete directly with Nestlé. It is vital for Nestlé to continuously find
new ways to improve its products and generate new sources of growth for the company’s
future expansion because competition is so violent. In recent years, Nestlé has focused on the
health and wellness aspects of its products to maintain its edge in the market.

Bargaining Power of Supplier:

Nestlé prides itself on creating and maintaining positive relationships with its suppliers all
over the world. Due to the large purchasing power of Nestlé, and because the suppliers of
agricultural commodities offer a product that is far from unique, Nestlé holds more
bargaining power than its suppliers. Aside from this, Nestlé prefers to create and preserve
long term relationships with its suppliers as this helps to ensure the quality of the raw
materials being purchased. In addition, Nestlé also offers useful advice to its suppliers on
how to perform more efficiently to minimize unnecessary costs.

Bargaining Power of Buyer:

Customers have a large amount of bargaining power regarding to their consumption of Nestlé
products. There are close substitutes for Nestlé products which allows for the preferences of
the customer to be very influential. Nestlé understands the power of the customer and has
taken specific steps to meet the needs of its products consumers. Specifically, Nestlé is
incorporating health and wellness into the creation of its products as society has started
becoming more health conscious.
Intensity of Rivalry Among Competitors:
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Nestle is powerhouse in the food processing industry but so are Kraft, Masterfoods, and
Unilever, Nestle was also facing strong competition at the national and regional level. These
companies, among others, are in a constant and continuous battle to outperform one another.
Nestle was increasingly facing fierce competition as many food producing rivals had
achieved significant improvements in their operating efficiency. Rivalry is fierce in the food
processing industry, and this is a good thing for consumers. If these companies continue
striving to one up one another, consumers will continue to enjoy ever-improving product
lines.

6. SWOT Analysis

Strengths:
 Have a very long history over 140 years
 Company’s name Nestle signifies the quality image high standard and quality
product.
 Loyalty from customers is also the major strength for the company
 Operated factories in 77 countries in all six continents, a truly global company
 Considered the innovation leader in the global food and nutrition sector with 3500
scientists in company R&D network
 Offering thousands of local products, research and development capabilities.
 Company can compete in a dynamic environment.
 Company always adapts the new technology.
 Has a very strong workforce.

Weaknesses:
 Less consumer research in few areas.
 Increasing instances of product recalls hampering brand equity.
 Entering markets that are already mature and can give a tough competition to new
entrants.
 The distribution cost is high as compared to the competition in the local market.
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Opportunities:
 Well-known company and strong brand name.
 Health reliant products are becoming more popular in the world, including United
States.
 Ranked first in nearly all the product segments in which it operated (market leader)
 Company is trying to open stores in universities.
 They can provide incentives to retailers to increase sales volume.

Threats:
 Some markets they are entering are already mature.
 Global competitors
 Increasing price of raw materials
 Highly competitive market, multinational companies are very organised and
financially strong
 Company like Cadbury is giving more discounts to retailers as compared to
distributors due to which retailers prefer its products for sale
 Existing companies are increasing their product lines that can prove to be a threat in
the coming years.
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7. Critical Success Factors of Nestle

Localization amidst globalization

Successfully achieving localization in the increasingly globalized food industry, Product
planning, production, marketing, and services form a strategy of successful localization of a
global company. Nestle has 2 organizations that focused on leveraging its global reach to
achieve operational efficiencies: GLOBE and GNBS provide the process, organization, and
technology infrastructure to allow Nestlé to leverage its global size GNBS will enable Nestlé
to leverage its scale to increase the efficiency and effectiveness of its "back office" whilst
enabling the markets and businesses to focus on demand generation and profitable growth.
Nestle’s Swiss sales is only 2% of their total global sales.

Global brand strategy

Nestle has products that resonate all over the world under a unified brand. These brands are
unified under the Nestle banner, which delivered a value and reputation of a “global food
company” while the products delivered its own specific attributes. The global corporate brand
was the brand platform for delivering localized products and brand. Nestle has built global
brands such as Nescafe, Nesquik, Nestea, Taster’s Choice, Haagen-Dazs.

Successful M&A
Nestle has grown through organic growth but really through successful M&A. Nestle has
acquired to enter both emerging and developed markets, and new product categories. Clear
strategic focus: Food & Beverages, Nutrition, Health & Wellness, adjacencies to existing
core businesses. Within these strategic focuses, 12 of their brands represent 70% of sales,
most are #1 or #2 in Market Share (4 of these brands are billion-dollar brands) Clear criteria
for transactions: Enhancing key metrics, strong market positions, brands, capabilities, ease of
integration(culture) Global scope but focus on bolt-ons: both emerging and developed
markets. M&A drives profitable growth thru competitive advantages, growth drivers, and
operational pillars.
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8. Evaluation of Nestle’s Business Strategy

8.1 Nestle Roadmap to Good Food, Good Life
Nestlé has around 468 factories, operates in 86 countries around the world, and employs
around 330000 people. It is one of the main shareholders of L’Oréal, the world’s largest
cosmetics company (Nestlé). The mission of Nestlé nowadays – “Good Food, Good Life” –
 is to provide consumers with the best tasting, most nutritious choices in a wide range of food
and beverage categories and eating occasions and to put a strong emphasize that leadership is
not just about size; it is also about behaviour and trust earned over a long period of time by
consistently delivering on promises.
It is quite important to present Nestle’s internal resources when analysing company’s
strategic position – the key strengths and weaknesses. Nestle’s Chairman and CEO Paul
Bulcke had set Nestlé on the path of achieving worldwide sustainable competitiveness
through the following strategic “pillars” such as low-cost, highly efficient operations;
renovation and innovation of the Nestle product line; universal availability and ability to
customize products to the local market conditions; improved communication with consumers
through better branding; research and development capabilities with a focus on meeting
today’s needs without compromising the ability of future generations to meet their needs, and
to do so in a way which will ensure profitable growth year after year and a high level of
returns for shareholders and society at large over the long-term. The company has the largest
R&D network of any food company in the world; with 32 R&D centres and over
5,000 people directly involved in R&D.
Nestle’s long-term corporate objectives are to be recognized as the world’s largest and best
branded food manufacturer and leader in Nutrition, Health and Wellness, trusted by all its
stakeholders, whilst ensuring that the Nestlé name is synonymous with products of the
highest quality as well as achieving the status of “Nestlé Model”, a term which referred to
Nestle’s objectives of organic growth between 4% and 6% each year; continued year-after-
hear improvements in earnings before interest and tax. In recent years, the company has
pursued a policy of expansion and diversification (brands diversified into specific product
groups like baby foods, bottled water, coffee, drinks, food service, sport nutrition and weight
management etc.) through acquisition and divestment to achieve a more balanced structure to
the business (as an example, Nestle’s 2012 acquisition of Pfizer Nutrition, enhancing its
position in global infant nutrition).
To stay ahead of the competition, Nestlé centralizes expertise in the system technology.
Nestlé has recently marked the official opening of a new System Technology Centre (STC) in
Switzerland that brings together on one site the expertise used to combine products, capsules
and machines such as those used in its Nespresso and Nescafé Dolce Gusto beverage systems
what will significantly affect the company’s profits in the future. The company has also set
up a new institute to combine nutritional and biomedical research, in the hope of creating
foods that provide a medicinal benefit. Nestle is examining its entire portfolio to make sure
its products are healthier and tastier than those of its direct competitors.
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8.2 Business Principles

Nestlé is committed to the following Business Principles in all countries, considering local
legislation, cultural and religious practices:

1. Nutrition, Health, and Wellness

Our core aim is to enhance the quality of consumers lives every day, everywhere by offering
tastier and healthier food and beverage choices and encouraging a healthy lifestyle. We
express this via our corporate proposition “Good Food, GoodLife”. Nestlé Nutritional
Profiling System 

2. Quality Assurance and product safety

Everywhere in the world, the Nestlé name represents a promise to the consumer that the
product is safe and of high standard. Nestlé Quality Policy

3. Consumer Communication
We are committed to responsible, reliable consumer communication that empowers
consumers to exercise their right to informed choice and promotes healthier diets. We respect
consumer privacy. Nestlé Consumer Communications Principles Nestlé Policy and
Instructions for Implementation of the WHO International Code of Marketing of Breast-milk
Substitutes

4. Human rights in our business activities

We fully support the United Nations Global Compact’s (UNGC) guiding principles
on human rights and labour and aim to provide an example of good human rights and labour
practices throughout our business activities. International Labour Organisation

5. Leadership and personal responsibility

Our success is based on our people. We treat each other with respect and dignity and expect
everyone to promote a sense of personal responsibility. We recruit competent and motivated
people who respect our values, provide equal opportunities for their development and
advancement, protect their privacy, and do not tolerate any form of harassment or
discrimination. Nestlé Management and Leadership Principles and Nestlé Code of Business
Conduct

6. Safety and health at work

We are committed to preventing accidents, injuries and illness related to work, and to protect
employees, contractors and others involved along the value chain. Nestle Policy on Health
and Safety at Work

7. Supplier and customer relations

We require our suppliers, agents, subcontractors, and their employees to demonstrate
honesty, integrity, and fairness, and to adhere to our non-negotiable standards. In the same
way, we are committed towards our own customers. Nestle Supplier Code

8. Agriculture and rural development

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We contribute to improvements in agricultural production, the social and economic status of

farmers, rural communities and in production systems to make them more environmentally
sustainable. Nestlé Policy on Environmental Sustainability

9. Environmental sustainability
We commit ourselves to environmentally sustainable business practices. At all stages of the
product life cycle, we strive to use natural resources efficiently, favour the use of sustainably
managed renewable resources, and target zero waste. Nestlé Policy on Environmental
Sustainability

10. Water
We are committed to the sustainable use of water and continuous improvement in water
management. We recognise that the world faces a growing water challenge and that
responsible management of the world’s resources by all water users are an absolute necessity.
Nestlé Water report Nestle continues to maintain its commitment to follow and respect all
applicable local laws in each of its markets.

8.3 Sustainability of Competitive Advantage

Nestle’s Competitive advantages:

 Unmatched product and brand portfolio
 Unmatched R&D capability
 Unmatched geographic presence
 People, culture, values, and attitude

True competitive advantage comes from a combination of hard-to-copy advantages

throughout the value chain, built up over decades. There are inherent links between great
products and strong R&D, between the broadest geographic presence and an entrepreneurial
spirit, between great people and strong values.

According to Porter, a country can create competitive advantage for itself rather than merely
relying on natural endowments. Keeping Nestle in mind, Switzerland has created a global
recognition for itself based on this huge multinational giant’s image. Factor conditions talk
about the country creating its own factors of production. Japan for instance does not have any
local metal or steel however it has become synonymous with the manufacturing of metal cars.
Similarly, factor conditions include building up on a country’s skilled resources and putting
them to best use such as Nestle has done by acquiring raw materials from other parts of the
world and treating them through innovative processes to suit its own needs.

Demand conditions mean that when the demand of a certain product is high locally, the
company can focus on it and build that as its competitive advantage. The demand for healthy
food was very high in Switzerland and taking that demand, Nestle built its company and has
now succeeded in creating such a global giant. Because Nestles’ related and supporting
industries are also thriving and are the competition with each other, this gives Nestle the
opportunity to build on its cost advantage and focus on its innovation so that it can continue
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its differentiation strategy in the market. The local conditions affect the firm strategy and
culture. Within Switzerland, there was high focus on doing things after thorough research and
therefore the same ideas were inherent since the inception of Nestle.

The Nestlé Roadmap

9. Major Strategic Issues Faced by Nestle:

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Nestlé boycott:
A boycott was launched in the United States on July 7, 1977, against the Swiss-based Nestle
corporation. It spread in the United States and expanded into Europe in the early 1980s. It
was prompted by concern about Nestle’s “Aggressive Marketing” of breast milk substitutes,
particularly in less economically developed countries (LEDCs), largely among the poor. The
boycott has been cancelled and renewed based upon scrutiny of the business practices of
Nestle and other substitute manufacturers monitored by the International Baby Food Action
Network (IBFAN). Organizers of the boycott claim that the use of substitutes represent a
health risk for infants and encourage the practice of new-born nutrition via natural breast
milk. As of 2013, the Nestle boycott is coordinated by the International Nestle Boycott
Committee, the secretariat for which is the UK group Baby Milk Action.

Palm Oil Controversy:

Nestlé is fighting a PR battle with Greenpeace over claims that it is continuing to source palm
oil from Sinar Mas, the Indonesian company accused of illegal deforestation and peatland
clearance. Nestlé, maker of Kit Kat, uses palm oil from companies that are trashing
Indonesian rainforests, threatening the livelihoods of local people and pushing orang-utans
towards extinction.

Raw Materials Problem:

Nestle is facing an unexpected customer demand for their products which lead to increased
demand for raw materials. But suppliers fail to deliver the raw materials timely due to bad
weather, natural disaster, political instability and for many other reasons. Inaccuracy of
orders received in inventory or stocks in hand also contribute to this problem.

Restructuring the Organization:

Nestlé identified significant problems with the pyramidal model and developed
the “Nestlé on the Move” program. Nestlé had to change the way managers seek out
contributions from their staff, Change the way managers led their people. Top-down
approach may serve an organization well but not suitable for uneducated and uninformed
employees who need supervisors to manage them carefully.

Child Labour Issue:

A significant number of children work in the cocoa production sector in Nestle. This act
violates the child labour law. Human rights organisations are continually protesting the use of
child labour by Nestle.

10. Recommendation
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Nestle has a very established setup of both its operations and marketing. What the company
should however invest in is building its public image as a corporately responsible company as
well. As it has already been pointed out above Nestle is one of the world’s most boycotted
companies because of a certain perception that it commits corporate crimes when coming to
environmental practices. The company needs to make sure that that image is altered. Also,
the products of Nestle which are not doing so well in certain markets should be pulled out
rather than constantly spending more on them to turn their value around. Some products are
difficult to sell because of the culture of the market that Nestle operates in and therefore
should be avoided to ensure sunk costs do not occur.

11. Conclusion

In conclusion it is safe to say that Nestle has a lot of positive attributes backing its larger-
than-life product portfolio and therefore the company has managed to sustain its position in
the list of the fortune five hundred companies. The company by efficient management
procedures, innovation, capital infusion and research and development continue to expand its
portfolio and serves as an example of not just an exceptional food and nutrition providing
company but also a real multinational corporation. There are many lawsuits against the
company, and it is also generally considered to be one of the world’s most boycotted
companies and despite all off that the revenues of the company have hardly slumped since its
inception. That is a testament to their value chain creation and streamlined processes that
ensure that nestle becomes a part of the livelihood of the people of the 130 countries it serves.

12. Bibliography
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