Name: Ananya Verma

Roll No.: 1901184

Section: D

Competition & Strategy End Term

 Answer (1) Frameworks used – B(Competitive Advantage) and A(Value Chain Analysis)

Brief Description of Nestle

WHO WHAT HOW

Nestle is the world’s largest Food
and Beverage Company having
their presence in 187 countries
across the globe. They have around
2000 brands in their portfolio
including local delicacies and
global offerings.
Nestle offers a broad range of
brands ranging from food &
beverages to skin health, nutrition
care and pet care. Nestle India’s
brand portfolio includes NesCafe,
Maggi, KitKat, Milkybar, BarOne,
Milkmaid and NesTea.
Nestle is driven by their purpose of
“Enhancing quality of life and
contributing to a healthier future” in
order to inspire people to create a
better world by living healthier lives.
This is how Nestle strives to support
the society and to achieve their success
in a long term.

Nestle’s Resources and Capabilities that gives them a Sustainable Competitive

Advantage

Resources:

1) Research & Development – Nestle has a team of 4200 people spread across their 23
Research & Development centers in which they discover and develop innovative product
offerings in order to boost up their business growth. For this, they have adapted a multi-
faceted strategy which includes adoption of unique and new ways to work, simplification
of various processes, sponsoring of fast-moving projects, etc.
2) Wide-spread Portfolio – Nestle’ diverse product portfolio contains around 10000
products available in the global market spread over 2000 differentiated brands. Apart
from this, they have also made some big acquisitions such as Ralston Purina Company
(pet food), Dreyer’s, Gerber, etc. Through this way of buying their competitor companies
they are directly eliminating the threats posed by them.
3) Brand Reputation – A very big contributor towards achieving their competitive
advantage is Nestle’s Brand reputation. They have created a unique brand image by
fulfilling their promise to a healthy future to its customers. Currently, the brand value of
Nestle is 13000 million USD making it to continue their position of being the largest
producer of food and beverages.
4) Quality and safety – Nestle, the name itself says it all, they promise the customers to
deliver a safe and best quality product. Its quality assurance starts with farms by
addressing the major social and environmental issue. They also follow No waste attitude
with zero defect policy and Good Manufacturing Practices.
5) Geographical Presence – Nestle has their presence in 187 countries across the globe
majorly including countries from Middle East, North Africa, Central America, Asia
(Australia, India, Japan, etc.) and Europe (Russia, Germany, Italy, France, Spain, etc.).
6) Human Resource – Nestle’s human resources are full of efforts and expertise. Also, they
constantly work towards the families and agricultural communities who are a part of their
 value chain, in order to make sure that they are getting the facilities and respect they
deserve. They also ensure that ethical practices should be followed across the chain.
7) Technology – Nestle Continuous Excellence initiative has made the company to achieve
success in terms of lean working methods and leadership development. They had also
setup a Centre of Competence to assist end-to-end processes, operational ease and
improvising its capabilities to sustain their competitive edge.

Capabilities:

1) Consumer Profiling – Nestle looks up to a strategy called “Brand Building the Nestle
Way” in order to create attractive products to their customers. They indulge through
various online platforms to interact with their customers on regular intervals. They have
around 850 Facebook pages for different brands with a fan following of around 210
million.
2) Inbound Logistics – Nestle have initiated various sustainability programs like
“Nespresso AAA Sustainable Quality program”, “Farmer Connect Program” to support
their farmers by eliminating the middlemen and to buy raw material directly from the
farmers.
3) Isolating Mechanism – Nestle follows this mechanism in order to restrict the competitors
from dissolving their competitive advantage. Under this mechanism, they focus on two
sub-mechanisms called Hindrance to Counterfeiting and First mover advantage.
4) Environmental Sustainability – Nestle had adopted several environmental policies such
as “No Deforestation” policy for ensuring ethical practices for palm oil extraction. Also,
they strive to become a Zero-Waste Company in order to enhance the efficiency of their
supply chain.
5) Sustainable Packaging – Nestle is dedicated to assure that the plastic packaging is
rightly disposed or reused in order to reduce the harmful effects of plastic on the
environment. For this, they strive to make sure that none of their product packaging with
or without plastic will result in garbage which is harmful for the environment.

Nestle’s Four Strategic Pillars

Reduction in Cost by Centralization of R&D

eliminating a few activities for more
non-value adding effective and efficient
activities from their performance in
value chain. innovation.

Improvising the Differentiation and

collective effort of all signification of
the different Nestle’ company’s endeavors and
Nestle’s company units by Value enhancing organization- Chain
sharing knowledge consumer communication
under a common by improvised branding.
Creating Shared Value at each stage of the Value Chain

Environment,
Agriculture and Rural Products and
Manufcaturing
Development Consumers
and People

Improving
Reducing Brandnew Achieving
High quality community
Providing
Improving Entering
Expertise
raw &
material relationships
production
Local &
Reducing Building
Brand
and evolving
competitive
Increasing
Achieving Value for
High quality community Entering new
&R&D
Providing distribution
production & shareholder
competitive
sourcing
rawsupport
Expertise &for
material product
relationships Manufacturin
Local costs
markets
through
Building
and evolving volume
returns &
Increasing Nestle
Expertise
R&D quality to distribution shareholder
farmers
sourcing
support for & product g costs
Investments
Manufacturin responsible
markets
through value
returnsof
volume & Sales
suppliers
Expertise
quality to
farmers g Investments marketing
responsible value of Sales
suppliers
marketing
Generating
Increased Reducing Creating Broadening
local
Generating
income and
Increased consumption
Reducing employment
Creating access to
Broadening Value for
investments
local
improved
income and of natural
consumption in local
employment nutritional
access to & economic
investments Society
yields
improved resources
of natural incommunities
local products
nutritional growth
& economic
yields resources communities products
growth

Nestle believes and follows the principle of Creating Shared Value in order to ensure that
their business would succeed in creating value for their stakeholder and to sustain in long-
term, simultaneously dealing with societal issues related to them. They strive to “enhance the
quality of life and contribute to a healthier future. For this, Nestle has chosen three effect
areas are which are also interconnected to each other which are; the people and families
believing in their products, the communities in which they operate and the environment.
Nestle has designed a several public resolutions across the three impact areas of their
business.

For People and Family – “Enabling healthier & happier lives”

 Introducing more variety of nutritional and healthier food & beverage products
particularly for pregnant women, mothers just delivered, and new-born.
 Adding and increasing healthy supplements like pulses, grains rich in fiber, nus,
vegetables and seeds in the food and beverage products. Also decreasing the levels of
sodium, sugar and fat in the products.
 Motivating the customers to live a healthier life by exhibiting the nutritional information
by through different ways, such as, on packaging, online sites and blogs, in-store, etc.
 Strengthening their marketing strategies in order to promote a healthier lifestyle in terms
of cooking processes and eating habits.
 Construction and application of biomedical science and nutritional information further
resulting in provision of digital solutions for customized nutrition.

For the Communities – “Helping Develop thriving, resilient communities”

 Enhancing farm finances and nutritional diversity as well as improvising the availability
of food for the farmers who are the suppliers of Nestle.
 Implementation of Nestle Cocoa Plan along with their cocoa farmers and continuous
development of their pre-established Green Coffee chain.
 Establish a culture of uprightness across the value chain and provide the employees and
other stakeholders with impactful grievance procedures.
 Encourage women empowerment and improvise the policy of being gender balanced and
maintaining healthy workplaces for their workforce across the value chain.

For the Environment – “Stewarding resources and the environment”

 Modifications to be made across all the operations in order to become more sustainable
and water-efficient by getting involved particularly with their supplying farmers.
 Enhancing sanitation and water access across the value chain by spreading awareness
about conservation of water.
 Encouragement for enthusiastic and transparent promotion for getting indulged in climate
policies in long term.
 Conserving natural resources, minimizing food waste, enhancing sustainability of
packaging through provision of necessary and effective environmental knowledge across
the value chain.

Finally, by 2030, Nestle aspires to support 50 million children living a healthier life,
improvise 30 million livelihoods of their primary stakeholders in business and give their best
in enhancing their operations leading to a zero impact on environment.

Answer (2)

Titan-Tanishq [ https://bit.ly/2ZiE2wL ]

Framework used – B (Resources & Capabilities to create Competitive advantage)

 Resources
1. Creativity and Innovation - Tanishq keeps on growing and setting new standards for
advancement and quality with every new offering they offer. Also, they have introduced
differentiator which is affordable and gorgeous diamond jewelry. They create 800+ new
designs every year.
Impact: Due to the drastic change in working culture because of the lockdown, there have
been a direct impact on the R&D activities. This has resulted in reduction of new designs for
the Akshaya Tritiya festival which fell in between the lockdown.
2. Quality – They are consistent on fulfilling the promises made to the customers by delivering
superior quality jewelry with a guarantee and written certification of the purity of gold and
precious stones.
Impact: Quality has not been much hampered as they already have a good reputation in
terms of quality.
3. Brand Reputation - Titan 's flagship jewelry brand Tanishq is one of the industry leaders.
With expansion, the company reported its best output during the year in terms of income and
product.
Impact: Due to the already existing goodwill of Titan, the brand reputation is not much
affected, although, they have been facing challenges in terms of business expansion.
4. Manufacturing – They have their own manufacturing and assembly facility in Hosur, Tamil
Nadu, for their studded jewelry section. They have also started a diamond pipeline to deliver
maximum value to ensure ethical labor practices and to eliminate mixing up of synthetics.
Impact: Due to the Corona outbreak, there have been several changes made by the
government regarding the working conditions and labor practices in manufacturing setups,
which is taking quite some time to adapt these new changes.
5. Geographical presence – Being the largest jewelry retailer in India Tanishq has 290
showrooms spread over 178 towns and cities.
Impact: Because of the dynamic situation, their national macro view is not giving very
effective results in terms of capturing the market.
6. Human Resource - The inspired and dedicated workers are the catalysts that propel the
company and generate value for all stakeholders. As a professional company, they engage in
developing and enhancing capabilities of their employees.
Impact: The major impact of COVID 19 for Titan Tanishq can be seen on the artisans also
called as ‘Karigars’ from different parts of rural India due to highly unorganized industry.
7. Technologies – They also continue to invest in new products, processes and consumer
experiences. They have been able to reduce costs, create a smoother consumer reach and to
build a sustainable customer loyalty.
Impact: Titan doesn’t see much incremental risk to the recoverability of assets, though they
are facing challenges in terms of developing new process technologies.

Capabilities
1. Creating value for Stakeholders –They recognize the value of promoting and sustaining
good relationships with the stakeholders by connecting with them in efficient and transparent
manner along with keeping their relationships established.
Impact: Maintaining stakeholder relationship have been affected due to loss of contact and
recognition.
2. Operations –Titan Industries is a leader in the most up-to - date Swiss and Japanese
technologies. They have excelled in maintaining standards for the consistent delivery of
products which is essential for karatage.
 Impact: Operation have been hampered in terms of inbound logistics i.e. delay in delivery of
products for karatage due to lockdown.
3. Marketing – They have adapted Confrontation strategy for marketing in order to achieve an
objective which is usually a target competitor’s market share. Also, they follow an aggressive
product strategy by constantly expanding their product range suiting to the need of customer
across classes.
Impact: Confrontation strategy is affected due to stock market imbalances and expansion of
products range is also hindered.
4. Customer experience – Their Encircle Program strengthens their customer relationship as
well as constantly updating the customers on company deals which propel them to higher
degree of satisfaction and commitment.
Impact: Retail part of Tanishq is very much affected due to closure of malls and markets.
5. Adjusting Capacity– Having a comprehensive PAN India network and being a leading force
across categories combined with state-of-the-art manufacturing facilities provides them with
a sustainable competitive advantage. They believe that their capacity to adjust with the
demands of their customers would encourage them to provide enhanced customer experience
and thus boosting up their competitive advantage.
Impact: Their state-of-the-art facility is hampered due to disturbances in the livelihood of
their artisans mostly belonging to remote areas.
6. Supplier Engagement – As part of their continuing dedication towards achieving mutual
goals, they periodically hold vendor gatherings, seminars and conferences as well as
recognizing their business-friendliness, consistency management, etc.
Impact: This is also affected because of their inability to conduct physical gatherings which
is necessary in the jewelry market.
7. Environmental sustainability – They have adopted the strategy to recycle gold and brass
which are further used for making products. Also, their jewelry exchange program allows the
provision to process the customer’s gold, thus, reducing the pressure for procurement as well
as the mining of ore to a large extent.
Impact: The jewelry exchange program had been stopped for a while as it doesn’t fall under
essential services defined by the government in the tough times.

Recommendations

 In this dynamic situation, Tanishq should focus more on their short-term goals. They
should delve deep for market penetration on a micro level and work on its region-wise
progress.
 There will be a shift in demand of Q2 and Q3 to Q4, they should anticipate and prepare
well for the Q4 demands for festivals like Durga Pooja, Diwali and the postponed
weddings.
 A visual training should be conducted for the retail staff members before the reopening of
stores in which they should be trained for the procurement of sanitizers, masks and gloves
for them as well as the customers. Also, Corona scanners should be installed in the retail
outlets.
 They should try to control the traffic flow by adapting appointment-based booking
strategy for the initial weeks.
 Zero-defect strategies and standard procedures should be developed for both in-house
manufacturing as well as outsourced products from various vendors.
 Adapting to the digital technology by creating interactive video shopping platforms and
online ordering system followed by a quick pick-up or delivery facility.
 Another solution for better customer experience would be the provision of jewelry trials
at home in the presence of a sales executive.
 Tanishq should also seek help from Ministry of Commerce for availing direct benefits to
the artisans living in poor conditions to cope up with the crisis.

INOX Leisure [ https://bit.ly/2NB0tYG ]

Framework Used – D (Response to a Competitor’s Action)

Competitor – PVR Cinemas

PVR had a first mover advantage in the cinema broadcast industry in comparison to the other
players in the market which makes to own up a higher market share. Talking about their
geographical presence, they have focused its screen presence to reach out to different key
areas specially the metro cities. As there have been a significant increase recorded in terms of
exporting the film content, particularly in the Asian countries like Japan & China, PVR has
expanded their business into these international markets also. They have also introduced
various premium service offerings like IMAX, PXL and Onyx, which has increased their
chances very much to go ahead of its competitors.

INOX Leisure’s Response

Looking at the last two years’ records, INOX has been aggressively expanding their screen
reach not only in metro cities but in tier II cities also. They have increased their screen
presence from 492 screens in 2018 to 574 screens in 2019 and currently having reached at a
number of 614 screens as of Feb 2020. Also, they are planning to open 70 screens by the end
of 2020 and to reach a number 1118 screens post 2020 for which the contracts have already
been signed. Though, this planning is getting affected due to Corona outbreak but so is the
scenario with its competitor.

Their major focus and USP is to provide a rich customer experience, specially for the
premium screens. For this, they have introduced several facilities like luxurious sitting space,
grand 3D experience, curated menus by chefs, etc. After that, they have also been providing
non cinema content which are live music concerts, live sports event, documentaries for
educational institutes, etc. Also, they have a provision of INOX Rewards which makes the
customers earn reward points by simply registering through their mobile number which they
can further use to spend on movie tickets and food. After reaching a certain number of points,
customers also get free movie tickets, food vouchers and free access to INOX Insignia
Lounge.

INOX is also giving a tough competition in terms of ticket pricing which is the major profit
contributor of this industry. As compared to PVR’s average ticket price of Rs 210 in 2020,
INOX’s average ticket price would be Rs 204 by the end of 2020 along with improvised
experience and added services. Apart from this, INOX is also expanding its Food & Beverage
segment with more than 200 options which resulted in a growth of 22% year-to-year in terms
of average spend/head as compared to PVR’s growth of 13% year-to-year. Finally, unlike
PVR, INOX has a lot much scope for expansion and enhancements because it is a debt free
company as compared to PVR’s debt of 1282 crore.

Impact of COVID-19 on INOX Leisure’s Business Strategy

On an average, the exhibition industry is at a loss of 1500 Cr a month since the lockdown.
INOX showcases 1150 unique titles every year. One month of closure for INOX Leisure
would cost approximately 30-35 Cr. Since the cash flows have been impacted tremendously
and the revenues have become zero, the first thing to be done is keeping a close check on the
expenses and to find out ways to control those expenditures. Temporary suspension of third-
part agency contracts for housekeeping and security staff. A prolonged lockdown may result
in its inability to operate at a minimum profit along with imposing the government norms.
“The real challenge is to survive in such times”, this statement was given by the CFO of
INOX Leisure. So before thinking of the future strategies, the company should focus on the
survival strategies in this tough time.

INOX’ strategy to cope up with COVID-19 crisis

As part of Multiplex industry, INOX has made three major demands to the government. The
first one is a simple 75% wage subsidy to support their operating expenses. Second is an
interest-free loan of 2500000 per screen which is repayable in period of three years. Third is
to provide them with a GST waiver so that they can make the tickets more affordable. INOX
will take steps to ensure that good hygiene practice is followed in accordance with global
norms. Disinfecting processes to happen between two shows, cross allocation of seats in
order to avoid people sitting adjacent to each other to maintain social distancing, regular
temperature checks of employees, staff and patrons. Scheduling of shows would be done in
such a manner that it won’t create crowd in lobbies, restrooms and food counters during
intermissions. As stated on 9th June 2020, the company has enough liquidity for next 6
months to fund the business operations.

Recommendations

 They should invoke the Force Majeure clause under different lease contracts to reduce the
operational costs for their multiplex premises stating that the rent and common area
charges during the lockdown period will stand null and void.
 INOX should tie up with those OTT platforms on which the movies (in which INOX had
already been the box office partner) in order to get a certain percentage of their revenues.
 Once the cinemas resume, they should primarily focus on releasing the Bollywood
movies or any kind of Indian content in order to contribute towards the Indian Economy.

References

Question 1 –
https://www.nestle.com/aboutus/strategy

https://sites.duke.edu/corporations/2018/01/29/nestle-creating-shared-value-good-food-good-life-
good-for-society/

https://www.ukessays.com/essays/marketing/sustaining-competitive-advantage-of-nestle-marketing-
essay.php

https://www.afflink.com/blog/case-study-a-deep-dive-into-nestl%C3%A9s-supply-chain

https://bereavementpractitioners.org/strategic-business-valuesupply-chain-analysis-nestle/

Question 2 –

https://www.businessinsider.in/business/news/titan-says-severe-impact-of-coronavirus-on-q4-
revenue/articleshow/75060929.cms

https://www.indiainfoline.com/article/news-sector-gems-jewellery/titan-talks-about-covid-19-impact-
sales-to-drop-in-near-term-expects-normalcy-after-a-quarter-120052700342_1.html

https://www.livemint.com/market/mark-to-market/titan-s-covid-19-update-reinforces-recovery-
would-be-slow-11590563230534.html

http://www.businessworld.in/article/Multiplexes-Will-Emerge-Stronger-Smarter-And-Battle-
Hardened-Alok-Tandon-CEO-Inox-Leisure/17-04-2020-189423/

https://www.youtube.com/watch?v=jayZEPLzmCo

https://www.business-standard.com/article/companies/covid-19-fim-biz-hit-inox-leisure-reports-net-
loss-of-rs-82-cr-in-q4-fy20-120060801200_1.html

https://www.newindianexpress.com/business/2020/jun/09/company-has-sufficient-liquidity-to-fund-
business-operations-for-next-6-months-inox-leisure-2154225.html