(Subject Name: Entrepreneurship)

PGDM Batch 2021-23

Assignment – 01 Submission Date: 25.01.23

Submitted by: Submitted to:

Name: Khushboo Singh Dr. Piali Haldar

Admission No: PGDM 21034
 TABLE OF CONTENTS

S NO. CONTENT Page No.

1 Introduction to Company 3

2 Major Competitors 12

3 PESTEL Analysis 14

4 SWOT Analysis 18

5 References 25
 Chapter 1
Introduction to company

Our journey starts in 1866, with the establishment of the Anglo-Swiss Condensed Milk
Company. In 1867, Henri Nestle produces a breakthrough infant food, and in 1905, the firm he
created merged with Anglo-Swiss to form the Nestle Group. During this era, towns expand and
railways minimize item costs, resulting in greater international trade in consumer products.

1866
Charles and George Page, brothers from the United States, helped create the Anglo-Swiss
Condensed Milk Company in 1866. Using copious fresh milk supplies in Switzerland, they
employ knowledge obtained in their country to create Europe's first condensed milk production
factory in Cham. They begin delivering the product under the Milkmaid brand to Europe's
industrial cities, advertising it as a safe, long-life alternative to fresh milk.

1867

Henri Nestle, a German-born pharmacist, presents his 'Farine Lactee' ('flour with milk') in
Vevey, Switzerland. Nestle manufactures it for ingestion by newborns who cannot be breastfed
and blends cow's milk, wheat flour, and sugar to combat high mortality rates. Around this time,
he begins to use the now-iconic 'Nest' emblem.
.1904

Nestle sells chocolate for the first time when it acquires Peter & Kohler's overseas business. Nestle also
helps to pioneer milk chocolate in 1875, when he gives his Vevey neighbour Daniel Peter condensed
milk, which Peter uses to create the first commercial product in the 1880s.
1901–1989: Mergers

Henri Nestle and his heirs, together with the Peter, Kohler, and Cailler families, contributed to
the growth of the Swiss chocolate business in the late nineteenth and early twentieth centuries.
Daniel Peter and Charles-Amedee Kohler (son of Charles-Amedee Kohler, who started a
chocolate business in 1830) formed the Societe generale suisse des chocolats Peter et Kohler
reunis in 1904. The firm founded by Peter and Kohler amalgamated with Cailler in 1911.
Alexandre Cailler (grandson of François-Louis Cailler) established a chocolate plant at Broc in
1898, which is being utilised by Nestlé today, enabling large-scale manufacture of milk
chocolate. Peter, Cailler, Kohler, and Chocolats Suisses united with the Nestlé business in 1929.
An prior collaboration between Peter and Nestlé in 1904 enabled for the manufacturing of milk
chocolate in the United States, at the Fulton facility.

Nestle and Anglo-Swiss merged in 1905 to form the Nestle and Anglo-Swiss Condensed Milk
Company, which remained in operation until 1947, when the name 'Nestle Alimentana SA' was
adopted as a result of the obtaining of Fabrique de Produits Maggi SA (founded 1884) and its
holding company, Alimentana SA, of Kempttal, Switzerland. The current name of the
corporation was chosen in 1977. The corporation had plants in the United States, the United
Kingdom, Germany, and Spain by the early 1900s. The First World War increased demand for
dairy goods in the form of federal contracts, and by the end of the conflict Nestle had surpassed
the competition.

Nestle paid $250,000 for two condensed milk factories in Oregon from Geibisch and Joplin in
January 1919. The first was at Bandon, and the second in Milwaukie. They significantly enlarged
them, with the Bandon factory producing 250,000 pounds of condensed milk daily.

Following World War I, federal contracts stopped up, and customers returned to fresh milk.
Nestle's management, on the other hand, acted promptly, simplifying operations and cutting debt.
Nestle's initial foray into new goods occurred in the 1920s, with chocolate manufacturing being
the industry's second most significant business. Louis Dapples was CEO until 1937, when he
was succeeded by Edouard Muller, who died in 1948.

Nestle was directly affected by the Second World War. Profits fell from $20 million in 1938 to
$6 million in 2009. In emerging nations, notably in South America, factories were constructed.
Ironically, the war aided the industry's latest model, Nescafé ("Nestle's Coffee"), that became
favorite drink of the US troops. Nestle's output and sales increased during the wartime era.

Nestle entered a dynamic era following the end of the Second World War. Nestle partnered with
Maggi, a maker of spices and soups, in 1947. Crosse & Blackwell, Findus, Libby's, and
Stouffer's all followed in 1950. (1973).

Growth surged, and additional acquisitions occurred. Diversification began in 1974 with a stake
in L'Oreal and a $280 million purchase of Alcon Laboratories Inc. by Chairman & CEO Pierre
Liotard-Vogt.

Nestle's stronger bottom line enabled the business to make further acquisitions throughout the
1980s. Nestle purchased Carnation for $3 billion in 1984, bringing the condensed milk brand, as
well as Cold brew and Friskies. Nestle Nespresso S.A. was formed in 1986. Rowntree
Mackintosh, a British candy manufacturer, was purchased for $4.5 billion in 1988, bringing with
it names including such Kit Kat, Rolo, Smarties, and Aero.

International expansion 1990-2011

Nestle benefited from a good opening half of the 1990s. Trade barriers fell, and global markets
evolved into a more or less linked trade zones. Various acquisitions have occurred since 1996,
notably SanPellegrino (1997), D'Onofrio (1997), SpillersPetfoods (1998), and Ralston Purina
(1998). (2002). In North America, two big acquisitions occurred in 2002: in June, Nestle merged
its US ice cream business with Dreyer's, and in August, a US$2.6 billion takeover of Chef
America, the developer of Hot Pockets, was announced. During the same time period, Nestle
entered a joint offer with Cadbury and went close to buying Hershey's, one of its strongest
confectionery opponents, but the transaction fell through.

Nestle paid €240 million purchasing the Greek firm Delta Ice Cream in December 2005. It
acquired Dreyer's in full in January 2006, and became the world's biggest ice cream
manufacturer with a 17.5% customer base. In July 2007, a deal proposed the previous year was
completed.

Nestle acquired the Medical Nutrition division of Novartis Pharmaceutical for US$2.5 billion

and also acquiring the milk-flavoring product known as Ovaltine, the "Boost" and "Resource"
lines of nutritional supplements, and Optifast dieting products.
Nestle agreed to sell its controlling stake in Alcon to Novartis on 4 January 2010. The sale was
to form part of a broader US$39.3 billion offer by Novartis for full acquisition of the world's
largest eye-care company. On 1 March 2010, Nestle concluded the purchase of Kraft Foods's
North American frozen pizza business for US$3.7 billion.

Since 2010, Nestle has been working to transform itself into a nutrition, health and wellness
company in an effort to combat declining confectionery sales and the threat of expanding
government regulation of such foods.

This endeavour is being undertaken by the Nestle Institute of Health Sciences, which is directed
by Ed Baetge. The institute's goal is to create a "new business among food and pharmaceuticals"
by developing foods with preventative and corrective health capabilities that will replace
pharmaceutical medications in pill bottles. The Health Science branch has already created a
number of items, including beverages and protein shakes to battle malnutrition, diabetes,
digestive health, obesity, and other disorders.

Nestle SA agreed to purchase 60% of Hsu Fu Chi International Ltd. in July 2011 for about
US$1.7 billion. Nestle agreed to buy Pfizer Inc.'s baby nutrition segment, previously Wyeth
Nutrition, for US$11.9 billion on April 23, 2012, beating out a joint proposal from Danone and
Mead Johnson.

2012–present: Recent developments

Nestle Health Science has purchased many purchases in recent years. It purchased Vitaflo, which
develops clinical nutritional products for people with genetic disorders; CM&D Pharma Ltd.,
which specialises in the development of products for patients with chronic conditions such as
kidney disease; and Prometheus Laboratories, which develops treatments for gastrointestinal
diseases and cancer. As of 2012, it also owned a minority stake in Vital Foods, a New Zealand-
based company that creates kiwifruit-based solutions for gastrointestinal conditions.

Another recent acquisition was the Jenny Craig weight-loss programme for $600 million. In
2013, Nestle traded the Jenny Craig business segment to North Castle Partners. In February of
this year, Nestle Health Science acquired Pamlab, a manufacturer of medicinal meals based on
L-methyl folate that target depression, diabetes, and memory loss. Nestle traded its Power Bar
sports nutrition company to Post Holdings, Inc. in February 2014. Nestle later revealed in
November 2014 that it was looking into possible strategies for its frozen food business, Davigel.

Nestle said in December 2014 that it will create ten skin care research centres throughout the
world, increasing its commitment in a rapidly developing sector for healthcare goods. Nestle
spent around $350 million on dermatological research and development that year. Nestle Skin
Health Research, Education, and Longevity Development (SHIELD) facilities will open in New
York in mid-2015, followed by Hong Kong and So Paulo, and then others in North America.

America, Asia, and Europe. The programme is being launched in collaboration with the Global
Coalition on Aging (GCOA), a group of firms that includes Intel and Bank of America. Nestle
stated in January 2017 that it was transferring its US headquarters from Glendale, California, to
Rosslyn, Virginia, just outside of Washington, DC.

Nestle said in March 2017 that the sugar content of Kit Kat, Yorkie, and Aero chocolate bars will
be reduced by 10% by 2018. A similar statement was made in July on the decrease of amount of
sugar in its morning cereals in the United Kingdom.

Following the publishing of a letter sent by Third Point Management founder Daniel S. Loeb,
Nestle's fourth-largest stakeholder with a $3.5 billion holding, describing how the corporation
should reform its corporate structure, the company announced a $20.8 billion share buyback in
June 2017. As a result, the corporation would allegedly concentrate its investments in coffee and
pet care, as well as pursue mergers in the product safety market.

Nestle and PAI Partners enter into a partnership, Froneri, in 2016 to unite the two businesses' ice
cream operations in Europe and other foreign markets. Nestle launched a new type of baby
formula in Spain in July 2017, including two human milk oligosaccharides. Oligosaccharides are
the third most prevalent component of breast milk, and they provide a variety of health
advantages.Nestle S.A. purchased a controlling share in Blue Bottle Coffee in September 2017.

While the financial terms of the transaction also weren't announced, the Financial Times claimed
that "Nestle is said to be paying up to $500 million for the 68 percent ownership in Blue Bottle."
Blue Bottle anticipates a 70% rise in sales this year.

Nestle USA agreed to buy Sweet Earth, a California-based maker of plant-based meals, for an
undisclosed price in September 2017. Nestle USA stated in January 2018 that it was selling its
US confectionery operation to Ferrara Candy Company, an Italian chocolate and candy
manufacturer. The business was sold for an approximate $2.8 billion.

Nestle and Starbucks signed a $7.15 billion licensing deal in May 2018.This enables Nestle to
advertise, sell, and deliver Starbucks coffee internationally, as well as combine the brand's coffee
types into Nestle's patented single-serve system, therefore boosting both businesses' overseas
markets.

In September 2017, Nestle announced a new profit target and decided to sell over 20 of its US
confectionery businesses in January 2018. However, sales increased by only 2.4% in 2017, and
the share price has dropped by more than 8% as of July 2018. While some recommendations
were implemented, Loeb stated in a July 2018 statement that the changes are too little and too
delayed. Nestle said in a statement that it was "producing results" and cited initiatives it has
done, such as investing in important brands and forming a worldwide coffee relationship with
Starbucks.

Activist investors, on the other hand, disagreed, prompting Third Point Management to develop
NestleNOW, a website to promote its case for change, accusing Nestle of being less quick,
aggressive, or strategic as it should be. Nestle should be divided into three components with
distinguishable CEOs, regional frameworks, and marketing heads - beverage, nutrition, and
grocery; more businesses that do not fit its model, such as ice cream, frozen foods, and
confectionery, should be spun off; and an outsider with knowledge and experience in the food
and beverage industry should be added to the board.

Nestle stated in September 2018 that it will sell Gerber Life Insurance for $1.55 billion. The firm
stated in 2019 that it will include Nutri-Score on all of its goods sold in European nations that
approved the nutritional label.

Froneri acquires Nestle USA and Nestle Canada's ice cream businesses in 2020. Also that year,
Nestle announced that it would invest in plant-based cuisine, beginning with a "tuna salad" and
meat-free goods, in order to engage and reach youthful and vegan consumers.

Nestle announced on February 16, 2021, that it has agreed to sell its water brands in the United
States and Canada to One Rock Capital Partners and Metropoulos & Co. The spring water and
mountain brands, as well as the clean water brand and the delivery service, are planned to be sold
in the spring.

Nestle agreed to pay $5.75 billion for the vitamin manufacturing firm Bountiful Company,
formerly known as The Nature's Bounty Co., in April 2021, citing that majority of the company's
performance that quarter stemmed from "vitamins, minerals, and supplements that promote
health and the immune system."

Nestle's Health Science unit announced in May 2022 that it had purchased the Brazilian organic,
natural, plant-based food manufacturer Puravida. Nestle began transporting baby formula
supplies to the United States from European air bases in May 2022 in order to alleviate the 2022
United States baby formula crisis. These aid supplies included Gerber baby food formula from
the Netherlands and Alfamino infant formula from Switzerland.
 CHAPTER 2
MAJOR PLAYER IN THE
MARKET

Gujarat Cooperative Milk Marketing Federation Ltd:

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is a manufacturer and distributor of dairy
products. The company’s product portfolio includes butter, sweets, milk, fresh cream, milk powders,
ghee, bread spreads, and curd. It also offers ice-creams, chocolates and confectionery, and non-alcoholic
beverages. GCMMF collects milk from village milk cooperative societies and markets its products under
Amul and Sagar brands, through a network of sales offices, dealers and retailers. It operates and
franchises retail parlors in various cities in India including Ahmadabad, Baroda, New Delhi, Bengaluru,
Hyderabad, Mumbai, and Surat. GCMMF exports products to the US, Singapore, Japan, the Philippines,
China, Australia, and Gulf countries. It is apex organization of the Dairy Cooperatives of Gujarat, known
as AMUL. GCMMF is headquartered in Anand, Gujarat, India.

Britannia Industries Ltd

Britannia Industries Ltd (BIL) is a manufacturer and marketer of bakery and dairy products. The
company’s product portfolio includes bakery products such as biscuits, bread, croissant, cakes, wafers,
and rusk, and dairy products comprising milk, butter, cheese, milk-related readymade beverages, and
yoghurt. BIL offers its products under various brands, such as Good Day, Treat, 50-50, Tiger, Crackers,
Bourbon, Milk Bikis, MarieGold, and NutriChoice. It sells and markets products through distributors,
direct sales channels, vendors, and contract packers. The company supplies its products across Asia-
Pacific, the Middle-East, Europe, Africa and the Americas. It owns and operates manufacturing plants
across India. BIL is headquartered in Bangalore, Karnataka, India.

Tata Consumer Products Ltd

Tata Consumer Products Ltd (TCPL) is a manufacturer and marketer of food products and non-alcoholic
beverages, with a major focus on tea and coffee. The company markets tea and coffee products under
Tata Tea, Vitax, Eight O’Clock Coffee, Tetley, Tata Coffee Grand and Joekels brand names, while it
merchandises packaged water under Himalayan, Tata Water Plus, and Tata Gluco Plus brand names.
TCPL’s food products include spices, pulses, healthy snacks, breakfast cereals, salt, poha and ready to
mixes under Tata Sampann, Tata Salt, and Tata Soulfull brands. The company’s business operations span
across Asia-Pacific, Europe, the Middle East, Africa and North America. TCPL is headquartered in
Mumbai, Maharashtra, India.

Heritage Foods Limited

Heritage Foods Limited (HFL), a flagship company of the Heritage Group, is a fast-moving consumer
goods (FMCG) company. It is engaged in the dairy, retail, agri, bakery and renewable energy businesses.
The company dairy products comprises butter milk, curd, flavored milk, lassi, ice-cream, milk, table
butter, milk powder, panner, and also UHT milk. HFL is also carries out in renewable energy generation
and retailing bakery products, fruits and vegetables. The company serves its products through various
channels such as Agents/Distributors, Heritage Distribution Centres, Heritage Parlours, Modern retail
formats, E-commerce and Heritage TUCH app. It also markets its milk products in Himachal Pradesh,
Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Uttarakhand, Maharashtra, Punjab, Odisha
and NCR Delhi, Rajasthan, Haryana, Uttar Pradesh and Madhya Pradesh. HFL is headquartered in
Hyderabad, Telangana, India.
 CHAPTER 3
PESTLE ANALYSIS
Political Factors:
According to current sources, Nestle works in 190 countries, therefore numerous political
variables influence the organization's day-to-day operations. One key responsibility that the
organisation must accomplish is to maintain track of the many modifications that have occurred
in these nations' laws regarding import, export, taxes, environmental restrictions, and so on.
These changes may be beneficial to the organisation at times, but they may also be huge
obstacles to productivity in particular locations. For example, labour rules that restrict or
discourage the employment of child labour in cocoa fields are becoming more rigorous, which,
according to reports, will have an indirect impact on the company's operations. When the global
environment is steady, multinational corporations such as Nestle function well.
Nestle faced an increased scenario during the Brexit era, which created an unpredictable
moment. The circumstances compelled the corporation to reconsider its choice to remain in the
nation; in fact, the giant even considered moving to a new location, such as Poland. When such a
shift occurs, it will result in the layoff of a large number of workers, further aggravating the
situation. When food standards change, the business must go through substantial brainstorming
and testing to replicate the commodity in newer forms while still meeting client requests.This
was evident in the instance of Maggi, which now has resurrected with the same problem of lead
content. Nestle benefited from a reduction in corporation tax in India's most recent budget. This
offers the organisation an edge in producing more and higher-quality items at a cheaper cost and
better serving society.
Economic Factors:
With the Nestle corporation operating in different nations, it acquires the mandate to develop
distinct economic strategies based on the country's economic situation. With cost as a significant
consideration, supplying nutritious food for all in a system where raw material prices fluctuate
owing to many political and ecological reasons is a huge problem. Nestle's raw material costs
have been rising, with trade tensions between China and the United States causing additional
anger among suppliers.
The challenge of producing and delivering quality food at the same price is a key impediment to
rising disposable incomes. With the deflationary trend in Western Europe continuing, prices fell
by 0.7%. Such circumstances are typical when the currency value of a currency falls or rises, or
when there is political upheaval in the region. Nestle has undertaken a number of measures to
boost local raw material production in order to enhance the effectiveness of the different
agricultural sectors in its areas of operation. With the United States and China as its primary
customers, rising economic activity in this sector will lead to better results as well as higher
profits and revenues.
Social Factors:
Any firm that operates on such a vast scale is impacted by even the smallest shift in customer
habits. Working toward health-related trends, the organisation has opted to focus on items with
minimal sugar, salt, and saturated fat. The Company has policies, methods, controls, and
frequent monitoring systems in place to assure high quality goods and avoid health concerns
associated with processing, preparations, and storage along their value chain.
Nestle's success is dependent on their capacity to anticipate client wants and provide high-
quality, competitive, relevant, and creative products. In response to the rising awareness of
sustainability among the millennial population, the company has opened the biggest ground-
mounted solar facility in the UAE. With rising public concern about the use of tinned and
precooked foods, the firm has worked to dispel these myths by investing in research and
development, creating a scientific foundation on which the public may be convinced. In order to
meet rising customer demand, the business decided to launch custom-made Nestle KitKat in the
UK market. Nestle is striving towards a healthier, more lucrative, more inventive future by
making continual efforts to cover everything and everyone.
Technological Factors:
The Nestle company considers in the convergence of internal and external digitalization,
services, and models. With escalating cyber-attacks interrupting data dependability, security, and
privacy, a contingency plan must be designed to avoid serious missteps when expanding into the
digital market. With real-time data for water quality being suggested, the corporation has
committed in a start-up to make this ambition a reality. Its activities will be more productive in
terms of water use with real-time data on its water use.
Nestle is eager to change the game by conducting experiments in leveraging blockchain for
increased transparency between customers and the company's supply chain. Nestle has
collaborated with several governments to implement various portals for checking the nutrition
facts of its various goods. Nestlé has embraced the SmartLabel transparency project in the
United States and publishes online nutrition, ingredient, and allergy information for about 87%
of its products. Nestle is proven to be a forerunner in addition to a grab in the sphere of
technology improvement with such unique ideas and devotion to making people's lives better.
Legal Factors:
The legal requirements of various nations must be evaluated and followed properly. A team of
specialists must constantly monitor compliance with the adjustments brought about. The
regulations governing employee health and safety, product quality and cleanliness, and labour
laws enacted in various nations must be obeyed. Aside from these, trademark and IPO
restrictions, as well as environmental laws, must be closely monitored. A significant difficulty
that the firm has experienced over the years is protecting its distinctive chocolate creations from
rivals.
Nestle was denied constitutional immunity in Europe for their one-of-a-kind wafer chocolate
KitKat in one case. Nestle has obtained a trademark for the KitKat form in countries like as
Australia, Canada, and France, despite not being in Europe. Nestle has been chastised in India
for funding research into breast milk replacements, which has been declared illegal under both
domestic and international law. These incidents highlight the importance of a sector that Nestle
must monitor. When a legal requirement is broken, the entire group suffers the consequences.
Environmental Factors:
Nestle believes in producing shared value and strives to have no negative environmental effect
through its activities. The group's efforts to decrease the use of polycarbonate in its products, as
well as their goal of making 100% compostable bags in all of its packaging material, are
significant achievements toward environmental sustainability, as it is one of the four major
companies responsible for the manufacture of 6 million metric tons per year. With big countries
moving toward sustainability, it is critical to maintain track of all developments throughout its
numerous countries of business.
When any of these changes in policy are not implemented, the group will suffer significant
setbacks. This was seen when Nestle was suspended by the RSPO for failing to submit palm oil
sustainability reports. Nestle's efforts, while not entirely negative, are evaluated as part of their
yearly evaluation. According to the study, indirect greenhouse gas emissions per tonne of goods
generated have been reduced by 2.6%, with 293 enterprises reporting zero-waste manufacturing.
The organization intends to produce plant-based services and promote sustainable nutrition
globally. They have undertaken a substantial endeavor to improve water effectiveness and
sustainability across their numerous businesses, as well as to promote these policies and
practices.
 CHAPTER 4
SWOT ANALYSIS

Nestle’s strengths
1. Largest Food Company
 Nestle, with a market valuation of $330 billion or more, is one of the world's largest food
corporations, selling products such as Hot Pockets, Stouffer's, DiGiorno, and Nespresso.

2. reputable brand

Nestle is the world's most well-known brand. It has built a recognised name in the food and
beverage industry by providing high-quality items for everyday usage all around the world.

3. Brand valuing

Nestle is well equipped for expansion. Nestle was ranked #62 by Interbrand in 2021, with a
brand image of $10.6 billion, moving up one spot from 2020.

28 – Pepsi (Brand value: $19.4 billion) 

51 – Starbucks (Brand value: $13.0 billion)
65 – Danoe (Brand value: $9.8 billion) 
72 – Kellogg’s (Brand value $8.6 billion)

4. Highly diversified portfolio

Nestle controls over 2000 trademarks worldwide and has refurbished over 8000 items. This is
one of the world's largest corporations, with the most extensive and diversified product range.

Nestle divides its products into 7 different categories:

 Powdered and Liquid Beverage

 Petcare
 Nutrition and Health Science  
 Prepared dishes and cooking aids
 Water products
 Milk products and ice cream 
 Confectionery

5. Global presence

Nestle has a large worldwide presence, and its goods are available virtually everywhere. Nestle
distributes its goods in 186 countries, rather than depending on a few markets, and has grabbed a
sizable market in many developed and developing nations to provide the majority of its
income.The Americas is Nestle's largest market, accounting for about 44.9% of total sales. The
United States and Canada contribute for 70% of sales in this area, with the remaining 30%
coming from Latin America and the Caribbean.
• Europe, the Middle East, and North Africa (EMENA) is the second-largest market, accounting
for approximately 29.6% of total sales. 64% of regional income come from Western Europe,
18% from Eastern and Central Europe, and 18% from the rest of the world.

• Asia, Oceania, and Sub-Saharan Africa (AOA) account for the remaining 25.5% of Nestle's
overall income. ASEAN markets (the Association of Southeast Asian Nations) make for 34% of
regional sales, while Oceania and Japan account for 15%, Other Asian markets account for 39%,
and Sub-Saharan Africa contributes for 12%. Looking at specific countries, the United States is
the leading market for Nestle, accounting for approximately 30% of annual income, followed by
the Greater China Region (2 largest market, accounting for approximately 6% of total revenue),
France (3 largest market, accounting for approximately 4% of total revenue), the United
Kingdom (4 largest market, accounting for approximately 4% of total revenue), and Mexico (5
largest market, accounting for approximately 3% of total revenue).

6. World’s largest corporation

Nestle is one of the world's largest firms, according to Forbes Global 2000, and is rated 46th in
the list for 2022.

7. Health focused Breakfast

Nestle, the world's largest food corporation, has cut the quantity of sugars used in the production
of their renowned Carnation Breakfast Essentials (by 25%). Furthermore, in order to improve
sustainability, the firm is introducing fully new and environmentally friendly paper bags for the
product range. When it comes to making decisions that matter most to customers, the corporation
clearly checks all the appropriate boxes. Furthermore, many of these customers grew up
appreciating the Carnation Breakfast Essentials range of goods and want their children to do the
same.

8. Starbucks licence agreement and excellent relationships with other brands

Nestle has signed a permanent licencing agreement with Starbucks to promote its goods
worldwide. The transaction boosts Nestle's coffee portfolio and allows Starbucks to use Nestle's
network for worldwide development. In addition, Nestle has well-established relationships with
other trusted and powerful brands like Colgate Palmolive, Coca Cola, General Mills, and
L’Oréal.

9. Efficient R&D system

Nestle has the world's largest diet and health research organisation, with 21 R&D sites. Its
research & design capabilities is one of its core competitive advantages. R&D operations employ
almost 5000 people. Nestle recently extended its activities in Greater China to include three
R&D facilities and four product innovation centres.

10. Environmental sustainability practices

Nestle makes significant investments in environmental sustainability measures and takes creative
steps to improve product quality. It optimises modern solutions to decrease waste, water
consumption, nonrenewable energy use, and procedure and method utilisation. The firm has
vowed to achieve net zero emissions by 2050. In addition, the supply chain is deforestation-free,
and the goal is to reduce virgin polymers by one-third (by 2025).

11. Large distribution system

Nestle possesses a large and diverse distribution network that reaches not just metropolitan but
also rural areas. To manage the business efficiently in separate nations, it has adopted local
distribution systems and a decentralised strategy. Nestle maintains close connections with its
suppliers, retailers, partners, and distributors.

Nestle’s Weaknesses
1. Increase in prices

Nestle has raised prices on a certain segment of consumer products by 6.5%. Price increases are
the result of rising raw material and shipping prices, supply chain limitations, and an overall
escalating climate.

2. Span of control and organizational structure

Nestlé is structured in the form of a matrix. That implies a huge range of products are under
same overarching framework, which makes managing a wide range of different brands fairly
difficult, which may frequently result in disagreement and potential conflicts of interest.

3. Water controversy

Nestle was suspected of draining millions of litres of water from a reserve in Canada, where
residents are without potable water.

4. Social criticisms

Nestle has frequently been the focus of media interest. Water privatisation, deceptive labelling,
and a chocolate-making dispute involving children and slave labour are just a few instances of
how its commercial reputation has suffered.

5. Maggi Noodles controversy

Nestle failed a testing procedure in India in 2017. People boycotted Nestle as a result, and the
company lost 80% of its market cap. Nestle stated that the Noodles packs included "no added
MSG." However, following testing, 1000 times greater lead was discovered in the goods.

6. Racially Insensitive Product Names

Nestle has been chastised for fostering racism by adopting racially offensive product names.
Nestle was under criticism in Australia to avoid promoting racism with its Red Skins and Chicos
sweets, and has just stated that it will alter the names of two confectionary goods.

7. Unhealthy Products

Nestle's past is littered with items that posed a risk to customers, such as the China Milk Scandal
and poisoned cookie dough. Customers are wary of firms that have previously sold harmful
items.

Nestle’s Opportunities
1. Venturing small food start-ups

Nestle has an excellent potential to expand the variety of small food start-ups underneath its
well-known brand name. Nestle might potentially work with emerging start-ups to market its
brand.

2. Online shopping

Nestle has a fantastic chance to expand its e-commerce and online retail platforms. Only a few
CPGs provide digital facilities to ensure purchasing more easy and enjoyable. Despite the fact
that Nestle has online stores in just few nations, extending its digital services to other locations
will be a profitable option for the corporation.

3. Market penetration for breakfast cereals

Nestlé's cereals and oats sector has expanded rapidly in recent years. As a result, expanding into
this industry would be extremely profitable for the organization.

4. Expanding ready-to-drink tea and coffee market

The desire for tea and coffee is constantly increasing, creating a profitable potential for Nestle to
further grow this industry.

5. Partnerships

Strategic agreements with other casual dining behemoths are also excellent opportunities for the
corporation to boost revenues and profitability.

6. Authentic labeling

Nestle has previously been chastised for providing false nutritional labels on its packaging. As a
result, there is a chance to enhance company operations by providing reliable information and
appropriately identifying its products.
7. Expand through Acquisitions

Nestle is transitioning to acquisitions in 2019 after selling numerous underperforming businesses

such as Herta Charcuterie. Recently, the firm bought the gastrointestinal pharmaceutical brand
Zenpep as well as the improved health company. Nestle's portfolio expansion through steeply
SMB acquisitions provides enormous growth prospects.

8. Refocus on Profitable Ventures

Possessing quite so many brands can strain a company's resources and degrade overall
performance. Nestle has been struggling underneath the weight of too many unproductive brands
and is hoping to offload its North American water brands such as Pure Life in order to focus on
developing its strongest and most lucrative businesses.

9. Nestle introduces “Vuna” a vegan substitute for Tuna

Following criticism for manufacturing unhealthy meals, Nestle appears to be migrating toward
healthier and plant-based food categories aimed at a more health-conscious and environmentally
sensitive target audience. Nestle asserts that Vuna is the outcome of the company's efforts on
futuristic food technologies.

Following the successful introduction of Vuna, Nestle indicated that it will seek to bring more
strict vegetarian food items to market, particularly in the protein area. Nestle, for example, will
soon release vegan alternatives to dairy goods like eggs and other marine items like shrimp.

Nestle’s Threats
1. Price fluctuations by retail giants

Nestlé's retail sales are mostly driven by retail behemoths such as Walmart, Tesco, Target, and
Kroger. Any price decrease or rise by these merchants can have an impact on Nestlé's sales and
profitability.

2. Illegal rainforest destruction controversy

Nestle was accused in 2017 of being involved in the unlawful demolition of Sumatra's last
stretch of rainforest. In this sense, it received harsh criticism from NGOs and environmentalists

3. Water scarcity

Nestlé's production is heavily reliant on water use. Accessing clean water from less expensive
sources has proven problematic for the corporation for a variety of reasons. These include rising
population, climate change, rising demands for food and water, increased pollution, water waste,
and resource overexploitation.
4. Rising competition

Many CPG businesses, such as Mondelez and Unilever, provide comparable food and beverage
goods. Nestle finds it difficult to compete in a situation where substitute products are readily
available.

5. Government regulations

Nestle's commercial activities may be impacted by government restrictions. Furthermore, rising

commodity costs push the corporation to raise the costs of the goods. It will reduce sales because
consumers will migrate to other brands that are less expensive.

6. Economic Uncertainty

Despite this, Nestlé's sales were not adversely affected by the epidemic owing to frantic buying
triggered by previous events. Global economic instability and recession continue to jeopardise
the company's revenue.

7. Haunting Dark Past

The US Constitutional Court is considering whether to initiate a human rights investigation into
Nestle subsidiary for intentionally assisting in the perpetuation of slavery in cocoa fields in the
African country of Ivory Coast. Although the incidents happened over a century ago, Nestlé's
racial past will follow the corporation for years to come, affecting sales, profitability, and
growth.

8. Under Fire for Printing Hindu God Image on Wrapper

Nestle India was accused of toying with residents' religious sensitivities by Netizens in a
whirlwind of strong emotions and accusations. The corporation was chastised for putting
photographs of many Hindu gods on the wrapper. Citizens have also indicated that the wrappers
would be thrown away in garbage cans, which is a flagrant and absolute disrespect to their gods.
Nestle has already apologized for the uproar, stating that it was unintentional.
CHAPTER 5
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