BUS 5116: OPERATIONS MANAGEMENT

Written Assignment Unit 1

Topic: Nestlé Swot Analysis

April 2022

Nestlé is a company grounded in Switzerland and innovated in 1866. It's a global leader in the

food and potables sector.

Strengths (Internal)
Nestlé’s Research and Development (R&D) department is upheld by the creation in product

development that the company demonstrates in the food and potables diligence, where they're

honored as holding the largest portfolio (seven sectors) of products. Away from this range,

through its R&D and operations functions, Nestlé is incessantly and constantly working to

perfect and optimize its processes. As such the company will probably stay competitive long

term in the request. Through its work in R&D, Nestlé not only increases its demand share in

being calls but it enables expansion into new demands, thereby perpetually enhancing its call

value. (Jallad, 2021).

The portfolio diversification at Nestlé is a strength that has seen it anchor its presence in

practically 200 countries. Organizationally, it has three geographic operations centres each of

which earns inferior to 50 of the company’s gross return. resembling structuring ensures that it

doesn't calculate on any single request to induce utmost of its profit and thereby protects it

against indigenous oscillations. Not only is this spread a buffer economically against implicit

indigenous profitable heads, but its global presence also enables Nestlé to optimally validate raw

paraphernalia and determine its product establishments in locales that enable it to maximize its

providence of scale (Jallad, 2021).

Weaknesses (Internal)
Nestlé’s crucial weaknesses involve its manpower repossession and working procedures, and its

social irresponsibility where it prioritizes profit over sustainability. It has been impeached for

acting against the interests of its workers and of reckoning on underage grunts in demands where

the government and laws don't prevent cognate practices. Secondly, Nestlé’s creation of its baby

formula products has been seen as socially reckless given sustainability principles, particularly in

requests where malnutrition at an early age is a primary concern. Some advocacy groups have

indicted the company of undermining child health in pursuit of profit ("Nestlé SWOT analysis -

SM insight," 2021).

Opportunities (External Forces)

The most important occasion in terms of profit capability in the food and drinkables diligence for

Nestlé is expansion into the global ready-to-drink (RTD) tea and coffee demand. It's a natural

expansion because Nestlé is formerly one of the largest coffee retailers broadly. Its living

distribution network is incomparable and can readily be abused to this end. In seizing this
occasion, Nestlé’s purchase of exclusive rights to request Starbucks coffees universally in 2018

has now rendered it the global leader in the RTD demand. ("Nestlé and Starbucks extend RTD

coffee partnership to new markets," 2021).

Threats (External Forces)

Two crucial threats related to sustainability and marketable social responsibility can compromise

Nestlé’s dominance in its requests. Both relate to its ethics in resource obtainment and

application. The company has been charged with not sourcing its raw paraphernalia in

environmentally sustainable ways, and not rehearsing fair trade principles in its work with

pastoral and marketable growers in numerous requests around the world. This failure is most

apparent in the company’s heavy operation of clean water in its product processing

manufactories truly though it locates these factories in water-scarce points (Laughman, 2020).

Because of its geographic spread, it has a world to choose from in locating its factories. Its

decision to prioritize profit indeed when it means compromising people’s access to water is a

questionable practice. The other dangerous factor is by investing in the development of its

suppliers through employing fair trade practices and proper manpower programs verily in venues

where the governments under which they're operating don't recognize these would boost the

company’s standing in any demand ("Nestlé SWOT analysis - SM insight," 2021)

My Conclusion
Nestlé’s primary strengths are in exploration and development, and its profit, product, and brand

diversification strategies. A crucial occasion for growth explored in this paper related to this

strength is its expansion into the fast- growing ready-to- drink tea and coffee request. When it
comes to its commercial social responsibility Nestlé has important remedial work to do,

particularly in its supposedly default position of prioritizing profit over its people. Its natural

resource governance practices have been indicated to be of particular concern, especially in

requests where governments aren't scrupulous in keeping their labor force from exploitation.

Related to these failings are the pitfalls represented by Nestlé’s practices in sourcing raw

materials.

References

Jallad, R. (2021, December 10). Council post: To convert more customers, focus on brand
awareness. Forbes. https://www.forbes.com/sites/forbesagencycouncil/2019/10/22/to-
convert-more-customers-focus-on-brand-awareness/

Laughman, C. (2020, August 21). The 2020 top 100 food and beverage companies. Food
Engineering | Covers the food and beverage processing industry.
https://www.foodengineeringmag.com/articles/99063-the-2020-top-100-food-and-
beverage-companies?v=preview

Nestlé and Starbucks extend RTD coffee partnership to new markets. (2021, July 27). FoodBev
Media. https://www.foodbev.com/news/nestle-and-starbucks-extend-rtd-coffee-
partnership-to-new-markets/

Nestlé SWOT analysis - SM insight. (2021, October 22). Strategic Management Insight.
https://www.strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis.html