The report takes into consideration the analysis of the Nestle Company. Nestle was established by Henri Nestle in 1866 in Switzerland. Nestle is considered as a leader in this industry because there are many innovative products that are introduced by the company. For example: Maggi was first introduced by Nestle and then other competitors also launched the products like Yippee or instant noodles. Also, the organization has specialization in many products like baby food and drinks (Moura et al., 2015).
The report would begin with the benefits of Strategic planning in Nestle will be discussed. In the next phase, the internal and external analysis will be discussed of the company. In this report the last phase will reflect the findings by taking into consideration SWOT analysis and also recommendations will be made on the future direction of the firm in the next 3 to 5 years.
Strategic planning plays a great role in conducting the activities of the organization. If there is proper strategic planning in Nestle then it can help to achieve overall goals and objectives in an effective manner. Strategic planning gives benefit to the company in following ways:
Internal analysis plays a great role in the process of strategic planning. Planning is an important part of every organization. Internal analysis is related to the competencies and competitive viability of the company. To conduct internal analysis SWOT Analysis is considered and it is related to the strength, weakness, opportunities, and threats to the organization. The information that is collected through internal analysis is important as it helps to develop strategic planning objectives which can assist the organization to sustain in the market (Saluja and Mahajan, 2017).
It is seen that internal analysis is an important measure that determines the level of strength and competency of the organization. Nestle uses latest technology system and equipment so that work can be accomplished. At the time of using the latest technology, it is seen that strategic planning is done so that right decision can be taken to conduct the activities of the organization (Piercy, 2016). Also in the internal analysis, the financial goals and strategic planning objectives of the company are accomplished. Strong identity of the company can be built if there is proper strategic planning in the organization. The proper strategic planning adopted by the organization helps to maintain the good image in the market.
It is also seen that if there is no proper strategic planning then it can be difficult for the organization to adopt proper technologies so that productivity can be enhanced. If the company does not consider updated technology than negative impact is seen in the overall productivity. If the weakness of the company is analyzed then it can be easy to revise the strategic planning so that failed objectives can be addressed or weakness can be eliminated (Prince, 2015).
If the company want to enter the market than internal analysis is important to be considered so that success can be attained. To evaluate the market each and every step is taken by taking into consideration strategic planning. It is essential for the organization to be aware of the changes that take place like technology, economy and the activities of the competitors. The internal analysis offers important information that can assist to build strength and it can only be done by strategic planning.
The external analysis also plays an important role in the process of strategic planning. It is seen that through this analysis business can survive in the competitive environment. It also helps the managers to adjust the strategies so that the operations of the business can be conducted smoothly. If there is proper strategic planning in the organization then it can be easy for the employees to work according to the strategies of the competitors. The external analysis is the strategy that is used at the time of starting the review process of the strategies related to the organization. If Nestle considers proper strategic analysis than a company can easily analyze the competitors prevailing in the market and can take effective strategies to compete effectively (Qiao et al., 2017).
It is seen that Nestle is operating their routine activities in a diversified community and there are various changes in the policies and procedures that are faced at the time of conducting the operations. There are many products that are given by the organization but because of various reasons, the products are not given in various countries. The company has shown stability in various economies like for example in China and India. Nestle has to take into consideration many political changes in developing countries so that the operations can be conducted easily (Zeng, 2017). Also, the activities of the company are affected by the risks that occur due to the government instability.
The company has emphasized on the research and development and also introduced innovative products in the market. Due to the economic changes in various countries the company has to face the issue in supplying its products to the customers (Laforet, 2015).It is analyzed that consumers also have the knowledge of the change in inflation and economic growth. Target segments are also set by taking into consideration the economic policies. To take accurate decisions related to price, inflation rate and buying power it is important to target the market. To promote economic worth of the farmers the organization emphasizes on a proper contribution of the products so that satisfaction level of the customers can be increased.
The operations of the company are influenced by sharing the thoughts and beliefs of the customers. Culture and lifestyle of the customers are considered by the company that induces the company to provide appropriate product to the right segment. Social perspective is also the factor that is considered by the Nestle Company. The company focuses on the changing attitude of the customers so that according to their demand product can be introduced in the market. In the recent scenario, people take care of their health and consume those products that are beneficial for their health. Good image of the company is also maintained by evaluating the behavior of the customers. To maintain the quality the production of the product is done locally so that customers can be satisfied with the quality offered by the company (Olavarrieta, 2015).
Technology provides many opportunities to the organization so that development of new products takes place in a better way. Nestle consider the latest technology so that proper information can be maintained and gathered with the help of latest software. Social media has also reduced the gap between the consumers and the organization. Nestle take into consideration latest technology so that according to the demand products can be produced.
The company has to face issue related to labor in which the wages are fixed and provision of law is considered. It is analyzed that organization has to follow the laws related to promotion as it helps the company to achieve success in the market. The company considers foreign trade regulations so that the products that are introduced can be distributed properly. Also, the changes that are made in the international market should be considered by taking into consideration global regulations.
In the present scenario, it is seen that the company emphasizes on a clean environment. It is important for the company to consider proper rules and regulations so that environment-friendly activities can be adopted. There are many countries in which rules are different so it is important to create proper acceptance in the market. Nestle focuses on contributing socially so that the problems concerned with packaging and recycling can be resolved properly.
This section reflects a SWOT analysis of the Nestle Company. SWOT analysis is considered to analyze the resources and capabilities that have developed a competitive advantage. There are also threats and opportunities in the current scenario that is faced by the organization and also it has given direct impact on the overall operations of the organization.
Strength is one of the assets of the organization. It is seen that company is one of the biggest and renowned brands. Nestle emphasizes on individual branding that helps the company to create awareness in the food brands. It is seen that company has a large distribution channel system. The company also penetrated in urban and in rural markets (Krafft et al., 2015). The company has adopted the method of proper distribution by door to door services that help the company to make the product visible in the market. Also, Nestle has a large workforce that helps to conduct the activities in a smooth manner (Dabholkar, 2015).
It is analyzed that the organization has many brands under the same group so it is difficult to handle individual brands in a proper manner. There are various legal and consumer issues that are seen in the market. Also, many controversies have taken place in the market due to the quality of the product. Also, it is important to lower the fixed cost and to attain a high share of the market (Orel and Kara, 2014).
It is evaluated that the buyer in this industry is high and the loyalty is low if the comparison is made with other competitors. The major threat to the company is related to the change in the technology. As it is important that latest technology should be taken into consideration so that activities can be conducted smoothly. There are many substitutes available in the market for every product that is offered by the company. There is large competition level in the food industry (Sa Vinhas and Heide, 2014). For instance: Cadbury.
Nestle has the opportunity to reach the target market and also enhance the business in the international market. Distribution of products should also be done by considering proper distribution channel. It is evaluated that there are many startups that are looking to merge their business so the company has the opportunity to enhance the activities on a large scale (Galalae and George, 2017).
By conducting a SWOT analysis it is seen that the company is a popular brand in the market. So, it is easy for the company to enhance its market share in the international market also. By having a good image in the market the company has enhanced the overall satisfaction level of the customers. The major strength of the company is good distribution channel that helps to distribute the products in the market. The controversies that have taken place in the market are related to baby formula boycott and child labor. It has given negative impact on the customers and also on the image of the company. Also, the weakness of the company is related to fixed cost so the company should minimize the high cost and focus on achieving large market share.
The risk is related to change in the technology. The company should focus on adopting latest technology so that productivity can be enhanced.
By evaluating the four cells it is seen that Nestle should focus on introducing innovative products that are different from their competitors so that in future success and large market share can be achieved. It is seen that the company has the opportunity to enhance the share in the international market. So by analyzing the demand of the customers, the products should be introduced in the market.
Nestle should also focus on maintaining good quality product as it will help to enhance the goodwill in the market. Also, there should be proper management of the activities of the organization so that it can be completed effectively. The company can be one of the best companies in the next 3 to 5 years if proper resources are maintained.
Conclusion
In this report, it is analyzed that proper measures to achieve growth should be considered like effective promotional techniques. Nestle should emphasize on the weakness so that profits can be attained properly. If customers are satisfied with the quality of products offered then it can be easy to enhance its market share. It is also evaluated that the company should introduce more innovative products with good quality so that goals and objectives can be attained easily.
References
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