Nestle primarily uses a Cost Leadership strategy where it optimizes its supply chain and production process to be done at a lower cost. This allows the brand to offer its products at a competitive price and still maintain its profit margin (Akpoviroro et al., 2019). It also utilizes the Differentiation strategy as it constantly diversifies its product portfolio and uses innovative ideas to improve its products. It allows the brand to introduce unique products in the market to address the diverse and evolving needs and expectations of the customers (Jalaludeen, 2022). Combining these two approaches Nestle maintains a competitive advantage in the market by reaching out to a large number of customers and maintaining its profitability.
Nestle can be seen to use a Hybrid strategy (of strategic clock) where it offers its products that have a higher perceived value compared to its competitors. This allows the products to be priced at a higher rate while maintaining its cost efficiency. This helps to avoid a higher price premium and is aligned with a Hybrid strategy for maintaining business advantage. This Hybrid strategy allows Nestle to provide a diverse range of high quality products that can justify a high pricing in some segments while being competitive in other segments (Eric et al., 2022).
Different products can be categorized in different quadrants of the BCG Matrix for Nestle. Example, Milo, failed to have a significant impact in the market and had low market growth and market share and therefore can be placed in the Dog quadrant. The mineral water and Coffee falls under the Star quadrant as it has high market share and high growth. Products like Maggi (Cash Cows) have a very strong position in the market and high customer loyalty therefore creating a strong market share but low potential for further growth. The confectionery and chocolate falls in the Question Mark category as their market share is relatively small (Business Mavericks, 2021).
Nestle uses a combination of Market Penetration and Product development strategy as identified on the Ansoff Matrix. As a part of the market penetration strategy, the company constantly increases its market share and line of product (in terms of variety and size), offers discounts, to increase its sales supported by innovative approaches in marketing and distribution (Bakare & Rahim, 2023). As a part of the Product development strategy, the company continuously develops new product lines and diversifies into new market segments like health focuses and organic products. It allows the brand to explore new product lines to increase growth in existing markets (Leliga et al., 2019).
Nestle utilizes a strategic synergistic approach of parenting that involves looking for collaboration opportunities in an active manner and creating synergy across its portfolio of related brands. The brand focuses on the value of sharing knowledge, adopting best practices and efficiently allocating resources to maximize efficiency in operations and innovative ideas. The organization also leverages the advantages from its individual brands to develop a holistic competitive advantage within the market. Even though the individual brands maintain a certain degree of independence, the approach of strategic synergy helps to align the goal of each brand to the vision and mission of the company by developing a collective expertise and capability and maintain the position as a leader in the industry (Santos, 2023).
The short term strategy is to continuously improve the product lines in a manner that can help to meet the changing needs of the consumers and excite the preferences of the consumers. It involves balancing the company’s pursuit for financial development through optimal resource allocation, operational efficiency and rapid innovation (Nestle, 2023).
The Mid term strategy of the company is to create value using a continuous focus on executional excellence, operational agility and customer satisfaction which inturn helps to achieve the long term values. This strategy ensures that the products are always right for the planet and are considered desirable while promoting the growth in business (Nestle, 2023).
The long term strategy of Nestle is to create value for the society and the shareholders. The long term strategic goals ensure that the brand is always able to deliver performance in a sustainable and consistent manner. The strategy is to create a positive change in the lives of the people, their pets while protecting and improving their environment by creating value for all stakeholders (Nestle, 2023).
Fig: Value chain analysis
(Source: Gandhi and Jain, 2011)
Fig: Dynamic Capabilities
(Source: Pereire et al., 2015)
Fig: Small Ulrich Framework
(Source: Sombongse and Tungkasmit, 2022)
Fig: VRIO Framework
Source: Bren et al. (2016)
Fig: BCG Matrix
Source: Mohajan (2015)
Fig: Ansoff Matrix
(Source: Chetty, 2020)
Fig. 7s Framework
(Source: Hansenne and Hibner, 2023)
Fig: Change Kaleidoscope Model
Fig: Balanced scorecard
(Source: Yacob et al., 2016)
Fig: Porter’s Generic Strategies
(Source: Subrahmanyam and Azad 2019)
Fig: Parenting strategy
(Source: Beckman, 2016)
Fig: Bowman’s strategic clock
(Source: Chauke, 2021)
Agotse, L. E. A. (2021). Assessing the effects of high employee turnover in Nestle business services (Doctoral dissertation). https://ir.knust.edu.gh/bitstream/123456789/14361/1/Linda%20Eyram%20Afi%20Agotse.pdf
Akpoviroro, K. S., Amos, A. O., & Olalekan, A. O. (2019). Exploring the Link Between Competitive Strategies and Organizational Performance in Beverage Industry.(A case of Nestle PLC). https://essuir.sumdu.edu.ua/bitstream/123456789/72806/1/Akpoviroro_Exploring_the_Link_Between.pdf
Aurthe, I. J. (2020). Human Resource Management and the Recruitment and Process Execution of Internship Program at Nestlé Bangladesh Limited. http://dspace.bracu.ac.bd/xmlui/bitstream/handle/10361/14418/16104136_BBA.pdf?sequence=1
Azzopardi, E. (2023). Change Management, Culture and Decision Making. https://www.researchgate.net/profile/Ernest-Azzopardi-2/publication/308749224_Change_Management_Culture_and_Decision_Making/links/57ee40bb08ae280dd0ac93a4/Change-Management-Culture-and-Decision-Making.pdf
BAKARE, R., & RAHIM, A. (2023). NICHE MARKETING AND OPERATIONAL PERFORMANCE IN THE NIGERIAN MANUFACTURING INDUSTRY: A STUDY OF NESTLE NIGERIA PLC. LAGOS. UNILAG Journal of Business, 9(2), 1-15. http://ujb.unilag.edu.ng/article/download/1844/1433
Basfore, R. (2022). Green Practices of Top Indian FMCG Companies. Indian Business@ 75: Research on Trends and Prospects, 319. https://books.google.com/books?hl=en&lr=&id=VuqoEAAAQBAJ&oi=fnd&pg=PA319&dq=Nestle+Sustainable+sourcing+and+procurement&ots=QFI2T8Rage&sig=HL6vWNybyhWocl6FibM4qoHUN9c
BECKMAN, P. (2016). CORPORATE ACTIVE OWNERSHIP: A BEHAVIORAL APPROACH TO UNDERSTANDING VALUE CREATION IN HIGHLY DIVERSIFIED MULTI-BUSINESS FIRMS (Doctoral dissertation, University of St. Gallen). https://www.researchgate.net/profile/Peter-Beckman/publication/274832056_Owner_Sequences_and_Value_Proposition_Variation_A_New_Answer_to_the_Best_Owner_Question/links/5867b46b08aebf17d3a17353/Owner-Sequences-and-Value-Proposition-Variation-A-New-Answer-to-the-Best-Owner-Question.pdf
BENJI, M. (2020). FACTORS INFLUENCING ON CUSTOMER SATISFACTION TOWARDS BABY CEREALS OF NESTLE LANKA PLC: A STUDY OF MOTHERS WHO ARE WORKING AT BENJI LTD IN SRI LANKA. In Conference Proceedings of the 2 nd Asia International Conference on Multidisciplinary (Vol. 2, p. 71). https://www.aimr.tirdiconference.com/assets/images/portfolio/Conference-Proceeding-AIMR-20.pdf#page=77
Brem, Alexander & Maier, Maximilian & Wimschneider, Christine. (2016). Innovation as a source of competitive advantage: the case of Nespresso. European Journal of Innovation Management. 19. 133-148. 10.1108/EJIM-05-2014-0055. https://www.researchgate.net/publication/286622222_Innovation_as_a_source_of_competitive_advantage_the_case_of_Nespresso/download?_tp=eyJjb250ZXh0Ijp7ImZpcnN0UGFnZSI6Il9kaXJlY3QiLCJwYWdlIjoiX2RpcmVjdCJ9fQ
Business Mavericks., (2021). BCG Matrix Nestle. https://businessmavericks.org/bcg-matrix-of-nestle/
Chang, P. L., Chang, Y. Y., Chai, M. H., & Ladeuth, L. M. A. (2023). Marketing Strategies in Delivering Customer Satisfaction: A case study of Nestlé. International Journal of Tourism and Hospitality in Asia Pasific (IJTHAP), 6(2), 26-39. https://www.ejournal.aibpmjournals.com/index.php/IJTHAP/article/download/2321/1989
Chauke, N. (2021). Master of Business Administration Strategic Analysis, Tools and Techniques (ST4S38-V1-26008) The case of Post Holdings buying Weetabix A critical strategic analysis of the current Strategic Change. 10.0000/0003. https://www.researchgate.net/figure/Bowmans-strategy-clock-Bhasin-2019_fig2_355351264
Chetty, M. (2020). Implementing an alternate payment method in the South African minibus taxi industry A Business Venture Proposal. https://www.researchgate.net/figure/The-Ansoff-Matrix-Courtesy-of-corporatefinanceinstitutecom_fig4_341671277
Chouthoy, S., & Kazi, R. The Effect of CSR Reputation in Shaping Brand Image. https://forms.iimk.ac.in/research/markconf20/Proceedings/301.pdf
Chung, E. Y., Kee, D. M. H., Chan, J. W., Tiong, S. Y., Choke, Y. W., Low, J. S., ... & Motwani, H. (2020). Improving food safety and food quality: The case of Nestle. International Journal of Tourism and Hospitality in Asia Pasific (IJTHAP), 3(1), 57-67. http://www.ejournal.aibpmjournals.com/index.php/IJTHAP/article/viewFile/724/705
Eric, G., Mary, A. L., & Mutari, A. R. (2022). Marketing strategies and consumers purchasing behaviour in Ghana: A case of Nestle Ghana Limited. African Journal of Business Management, 16(5), 104-116. https://academicjournals.org/journal/AJBM/article-full-text/3523B7C69234
Galli, C. C., & Vousvouras, C. (2020). Nestlé caring for water. International Journal of Water Resources Development, 36(6), 1093-1104. https://www.tandfonline.com/doi/abs/10.1080/07900627.2019.1700781
Gandhi, V. P., & Jain, D. (2011). Institutional Innovations and Models in the Development of Agro-food Industries in India: Strengths, Weakness, and Lessons. Indian Institute of Management. https://www.academia.edu/download/41760423/Institutional_Innovations_and_Models_in_20160129-23623-1lxw99r.pdf
Gupta, K., & Sharma, M. A. (2019). Global Talent Acquisition: Strategies and Best Practices for Staffing and Recruitment in A Globalized World. MANGLAM PUBLICATIONS, 177. https://www.researchgate.net/profile/Satish-Kumar-345/publication/372953153_Emerging_Technology_and_Management_Trends/links/64d0d129806a9e4e5cf6158c/Emerging-Technology-and-Management-Trends.pdf#page=187
Haldar, T., & Damodaran, A. (2022). Identifying market power of retailers and processors: evidence from coffee supply chain in India. IIMB Management Review, 34(3), 286-296. https://www.sciencedirect.com/science/article/pii/S097038962200074X
Hansenne, R., & Hibner, A. (2023). Overcoming Organisational Challenges related to Agile Project Management Adoption. https://www.researchgate.net/figure/5-McKinseys-7S-model-48_fig3_265078967
Ihinmoyan, T. (2022). Effects of digital advertising on consumer buying behaviour in Nestle Plc Nigeria Lagos. International Journal of Multidisciplinary and Current Educational Research, 4(4), 80-86. https://www.ijmcer.com/wp-content/uploads/2022/07/IJMCER_J04408086.pdf
Iskandar, F. (2021). The Impact of Strategic Change Management on Attaining Organizational Goals in Modern Business Environment (Doctoral dissertation, Webster University). https://search.proquest.com/openview/08b454e917e0587792b91ad7ffb56d9a/1?pq-origsite=gscholar&cbl=18750&diss=y
Jalaludeen, A. (2022). Psychological Impact of Marketing and Advertising Strategies of Nestle. Journal of Positive School Psychology, 6197-6202. http://mail.journalppw.com/index.php/jpsp/article/download/8055/5226
Jia Wen, C., & Jia Qi, C. (2020). ORGANIZATIONAL CONFLICT IN NESTLE. https://oer.ums.edu.my/bitstream/handle/oer_source_files/1354/ORGANIZATIONAL%20CONFLICT%20IN%20NESTLE.pdf?sequence=1&isAllowed=y
Kee, D. M. H., Gan, Z. W., Chan, Y. Q., Lee, H. T., Tan, X. Y., & Lee, S. W. (2021). Customer satisfaction and brand loyalty: A case study of Nestlé. Advances in Global Economics and Business Journal, 2(1), 13-26. http://www.agebj.org/index.php/agebj/article/download/24/15
Lanzolla, G., & Markides, C. (2021). A business model view of strategy. Journal of Management Studies, 58(2), 540-553. https://onlinelibrary.wiley.com/doi/pdf/10.1111/joms.12580
Leliga, F. J., Koapaha, J. D., & Sulu, A. C. (2019). Analysis of Internal Factor Evaluation Matrix, External Factor Evaluation Matrix, Threats-Opportunities-Weaknesses-Strengths Matrix, and Quantitative Strategic Planning Matrix on Milk Products and Nutrition Segment of Nestlé India. East African Scholars Journal of Economics, Business and Management, 2(4), 186-191. https://www.easpublisher.com/media/articles/EASJEBM_24_186-191_c.pdf
Lund, S., Manyika, J., Woetzel, J., Barriball, E., & Krishnan, M. (2020). Risk, resilience, and rebalancing in global value chains. http://dln.jaipuria.ac.in:8080/jspui/bitstream/123456789/10865/1/Risk-resilience-and-rebalancing-in-global-value-chains-full-report.pdf
MARIADAS, P. A., MURTHY, U., SUBRAMANIAM, M., SELVANATHAN, M., & LUN, N. H. (2021). The effects of economic uncertainty on multi-national companies (MNCs) investment in Malaysia. The Journal of Asian Finance, Economics and Business, 8(5), 1-9. https://www.researchgate.net/profile/Muthaloo-Subramaniam/publication/351623372_The_Effects_of_Economic_Uncertainty_on_Multi-National_Companies_MNCs_Investment_in_Malaysia/links/60a1c851a6fdcccacb5d2b3b/The-Effects-of-Economic-Uncertainty-on-Multi-National-Companies-MNCs-Investment-in-Malaysia.pdf
Mohajan, H. (2015). Present and Future of Nestlé Bangladesh Limited. https://mpra.ub.uni-muenchen.de/82850/1/MPRA_paper_82850.pdf
Mumtahana, M. (2021). Human resource management practices and employee job satisfaction of Nestle Bangladesh Limited. http://dspace.bracu.ac.bd/xmlui/bitstream/handle/10361/15981/17104144_BBA.pdf?sequence=1
Myers, A. (2020). Nestlé tackles child labour for 100% sustainable cocoa. FarmBiz, 6(3), 34-35. https://journals.co.za/doi/abs/10.10520/EJC-1d873a96df
Nestle., (2023). Our Business Strategy. https://www.nestle.com/about/strategy
Ohwo, K. O. (2020). INTEROPERABILITY AND EFFECTIVENESS OF INDUSTRIES IN THE SUB-SAHARAN AFRICA (SSA) EVIDENCE FROM NESTLE NIGERIA PLC. Management & Marketing Journal, 18(2). http://mnmk.ro/en/documents/2020_2/4-2-2-20.pdf
Olorunisola, K. I., Yusuf, S. O., Anthony, A. A., & Mutiat, A. M. (2022). Green Human Resource Management as a Tool for Organizational Sustainability in Nestle Foods Nigeria PLC. Research and Review: Human Resource and Labour Management, 23-33. https://matjournals.co.in/index.php/RRHRLM/article/view/1092
Omoyele, S. O., & Olabisi, J. (2020). DIVERSITY MANAGEMENT AND PERFORMANCE: EVIDENCE FROM NIGERIAN MULTINATIONAL COMPANIES. Economic Review: Journal of Economics & Business/Ekonomska Revija: Casopis za Ekonomiju i Biznis, 18(2). https://search.ebscohost.com/login.aspx?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=15128962&AN=149520887&h=aprzUZx67LngD6%2FhjlJppZ8GjT%2F%2FChR3X69wY2LDcfbM8vFr5jODw%2BGuSU506SS9hQcXquP7%2BdhQ3m%2Bk3J3R%2Bw%3D%3D&crl=c
Oyedele, O. O. (2019). Workforce Diversity Management and Performance in Food and Beverage Industry in Lagos State, Nigeria (Doctoral dissertation, Kwara State University (Nigeria)).
Pereira, C.R., Lago Da Silva, A., & Tate, W.L. (2015). The Role of Purchasing and Supply Management (PSM) in Supply Chain Resilience. Belo Horizonte, September. https://www.researchgate.net/publication/282120011_The_Role_of_Purchasing_and_Supply_Management_PSM_in_Supply_Chain_Resilience
Putri, A. P., & Triyono, A. (2020, August). Community, Dialog and Technology-Maximizing Creating Shared Value (CSV) Nestle Indonesia. In 2nd Jogjakarta Communication Conference (JCC 2020) (pp. 35-40). Atlantis Press.
Reza, M. H. (2020). Analysis of marketing strategy and quality policy of Nestlé. International Journal of Scientific Research and Engineering Development, 3(2), 1145-1152. https://www.researchgate.net/profile/Manjurul-Reza/publication/344071059_Analysis_of_Marketing_Strategy_and_Quality_Policy_of_Nestle/links/5f50c39992851c250b8c6b01/Analysis-of-Marketing-Strategy-and-Quality-Policy-of-Nestle.pdf
Santos, J. P. D. (2023). How did Nestlé Portugal manage supply chain disruptions caused by Covid-19 and the Ukrainian conflict? (Doctoral dissertation). https://repositorio.ucp.pt/bitstream/10400.14/42380/1/203327640.pdf
Sathyan, S., & SN, J. (2021). 100 Years of Growth and Success Story of Nestle India-A Fast Moving Consumer Goods (FMCG) Industry. International Journal of Case Studies in Business, IT, and Education. https://doi. org/10.47992/ijcsbe, 2581, 0131.
Sawer, P. B. (2021). Assessing the Impact of Procurement Activities in Achieving Quality at Nestle Ghana Limited in the Manufacturing Sector in Ghana. American Journal of Theoretical and Applied Business, 7(4), 112-117. http://article.ajtaab.org/pdf/10.11648.j.ajtab.20210704.16.pdf
Sombongse, C & Tungkasmit, S. (2022). Thai Youth’s Leadership Code: Characteristics of Leadership from the Perspective of Thai Youth. European Journal of Social Sciences. 5. 55-68. 10.2478/eujss-2022-0015. https://www.researchgate.net/figure/The-Leadership-Code-Model-Ulrich-Smallwood-and-Sweetman-2008-P14_fig1_366635953
Subrahmanyam, S., & Azad, S. (2019). Carrefour’s Competitive Strategy–Cost Leadership and Differentiation: A Case Study. Pacific Business Review International, 11(8), 137-145. https://www.researchgate.net/profile/Sarah-Azad-Fouad-Arif/publication/333118406_Carrefour's_Competitive_Strategy-_Cost_Leadership_and_Differentiation_A_Case_Study/links/5cdc7435299bf14d959c419a/Carrefours-Competitive-Strategy-Cost-Leadership-and-Differentiation-A-Case-Study.pdf
Sultana, S. (2019). Procurement Practices of Nestlé Bangladesh Limited. http://dspace.uiu.ac.bd/bitstream/handle/52243/767/Procurement%20Practices%20of%20Nestl%C3%A9%20Bangladesh%20Limited.pdf
Yacob, S., Sucherly, D. S., & Mulyana, A. (2016). Do Really Competitive Strategy and Strategic Alliances Effect nn Retail Business Performance. International Journal of Economics, Management and Commerce, 4(2), 783-796. https://www.researchgate.net/profile/Syahmardi-Yacob/publication/294693786_Do_really_competitive_strategy_and_strategic_alliances_affect_retail_business_performance_evidence_from_the_mini_market_retail_in_jakarta_and_bandung_city_indonesia/links/5a0afe73a6fdccc69ed9ca04/Do-really-competitive-strategy-and-strategic-alliances-affect-retail-business-performance-evidence-from-the-mini-market-retail-in-jakarta-and-bandung-city-indonesia.pdf
Wang, K., Wu, Z., Lai, S., Liang, D., Du, M., & Ma, Q. (2023, September). Cross-Cultural Brand Communication in the Globalization Context: Nestlé Coffee’s Marketing and Communication Strategies in China. In 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023) (pp. 406-413). Atlantis Press. https://www.atlantis-press.com/article/125991343.pdf
Zhai, J. (2022). The impact of the COVID-19 pandemic on Nestlé enterprise and its response. https://digital.car.chula.ac.th/cgi/viewcontent.cgi?article=9099&context=chulaetd
You Might Also Like
Elkie and Ark Environmental Analysis Assignment Sample
Environmental Planning Assignment Help
Implement And Monitor Environmentally Sustainable Work Practices
Get 24x7 instant assistance whenever you need.
Get affordable prices for your every assignment.
Assure you to deliver the assignment before the deadline
Get Plagiarism and AI content free Assignment
Get direct communication with experts immediately.
Get
500 Words Free
on your assignment today
It's Time To Find The Right Expert to Prepare Your Assignment!
Do not let assignment submission deadlines stress you out. Explore our professional assignment writing services with competitive rates today!
Secure Your Assignment!