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Strategic Management: Case study Analysis of Nestlé

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Executive summary
The report aims to evaluate the strategic management of Nestlé Company by understanding their
strategic intent for the business organisation. This has been done by analysing the internal and
external environment of the business that can offer significant opportunity or hinder the
performance by presenting threats. The analysis of strategic management is evident as it helps
the country to gain competitive advantage and earn substantial returns that are above average.
The report enlightens how the company utilises its resources, core competencies and capabilities
to overcome the threats and pursue the opportunities. The strategic management tool that has
been utilised to conduct the overall study include PEST analysis, value chain analysis, Porter’s
five forces model and SWOT analysis.

The report will further assist the company in planning their future strategies in respect to the
recommendations provided. Moreover, Nestlé is expected to fit within the strategic orientation
with the aim to perform better in its industry. The company has typically implemented the
strategies of product differentiation and cost leadership which is analysed to evaluate its
effectiveness in improving the performance efficiency. The report starts with the overview of
Nestlé Company, followed by the detailed analysis of its organisational structure, strategies,
internal and external environment that has significant impact on their business performance. The
later part of the report discusses about the strategic trajectory of Nestlé to shift its focus from the
current industry and entrance to the new market. This significant approach has been evaluated by
analysing the various acquisitions and merging strategies undertaken by Nestlé.
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Table of Contents
Strategic Management: Case study Analysis of Nestlé .................................................................. 1

Executive summary......................................................................................................................... 2

Table of Contents ............................................................................................................................ 3

Introduction ..................................................................................................................................... 5

Task 1 .............................................................................................................................................. 5

Environmental and Competitive analysis ....................................................................................... 5

Political ....................................................................................................................................... 5

Economical ................................................................................................................................. 6

Socio-Cultural factors ................................................................................................................. 6

Technological factors .................................................................................................................. 6

Description of Industry Structure.................................................................................................... 7

Issues/problems facing the industry ............................................................................................ 7

Industry Prospect and overall attractiveness ................................................................................... 8

Attractiveness .............................................................................................................................. 8

Unattractiveness .......................................................................................................................... 8

Analysis of Competitive forces ....................................................................................................... 9

PORTER’s five forces analysis .................................................................................................. 9

Threat of new Entrants ............................................................................................................ 9

Bargain Power of Customers .................................................................................................. 9

Competitive Rivalry ................................................................................................................ 9

Bargain power of suppliers ................................................................................................... 10

Threat of Substitute ............................................................................................................... 10

Competitor analysis ...................................................................................................................... 11

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Task 2 ............................................................................................................................................ 12

Strategic performance Indicators .............................................................................................. 12

Internal analysis drawing on relevant models ........................................................................... 12

SWOT analysis of Nestlé Company ......................................................................................... 12

Competitive strength versus Key rivals ........................................................................................ 14

Strategic Issues.............................................................................................................................. 14

Task 3 ............................................................................................................................................ 15

Strategic plan and Action recommendation .............................................................................. 15

Basic strategic direction ............................................................................................................ 15

Differentiation strategy by Nestlé ................................................................................................. 15

Cost-Leadership strategy .............................................................................................................. 16

Economic analysis .................................................................................................................... 16

Ratio and Liquidity Analysis .................................................................................................... 17

Nestlé’s strategic trajectory....................................................................................................... 20

Major functional support strategy ................................................................................................. 21

Information technology and Control system............................................................................. 21

Eminent failure.......................................................................................................................... 22

Recommendation .......................................................................................................................... 23

Short-term action recommendation........................................................................................... 23

Long term action recommendation ........................................................................................... 23

Reference List ............................................................................................................................... 24

Ancillary references ...................................................................................................................... 26

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Introduction
Nestlé Company was founded by Henry Nestlé who was a Swiss Pharmacist, who was focussed
on producing the first milk food for infants. The production of milk food was aimed at
combating the problem of infant mortality as a result of malnutrition. Soon, the product became
popular in Europe, which in turn has created a legacy of shared value embedded within their
corporate business principles and values (Boyd, 2012). With its efficient and humble beginning,
the company is dedicated to grow its business as the leading nutrition, health and wellness
company.

Headquartered in Switzerland, Nestlé operates in more than 150 countries having around 465
factories and employs around 339000 people globally (Akhtar, 2016). Experience of Nestlé over
the years makes it imperative that it takes decades to build a real competitive advantage. Nestlé’s
powerful establishment in the industry is a result of its inimitable strength of strong R&D,
product value chain, efficient entrepreneurship, wide geographical coverage, significant
corporate values and great people working together.

Task 1

Environmental and Competitive analysis

The strategic analysis of an organisation usually starts with the evaluation of its external
environment. PESTLE analysis is one of the main tools for conducting micro-environmental
analysis that will investigate on the political, economic, social and technological aspects of the
environment in which the firm is operating (Almohammad, 2010). The main purpose of this tool
is to identify the possible threats and opportunities offered by the whole industry.

Political
In reference to the political aspects the bureaucratic regulations, political stability and taxation
policies play an essential role in international business operations. Moreover, Nestlé generates
steady sales in its targeted market, in presence of political stability. The strict governmental laws
in certifying the use of safe and natural raw materials, public financial disclosure and regulations
on fraud and bribery has significant influence on each phase of Nestlé’s strategic planning and
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organisational performance (Boyd,2012). In respect to the Chinese market, Nestlé’ has been
facilitating a lower corporate tax with the preferential policies offered by the municipal or central
government to huge MNCs. As a result of which Nestlé has expanded its growth at an
unprecedented rate over a period of 20 years in the region of greater China.

Economical
The economical factors varies from one country to another and mainly deals with the
components related to inflation and exchange rate, economic growth, rate of interest which tends
to have significant impact on the decision-making processes and business strategies planned by
the company. Nestlé’s entrance to a new market or launching of a new product in a particular
region has been planned by considering the disposable income and purchase power of its
consumers (Bradley, 2014). Recent statistics on Global food industries reveal that Nestlé is
focussed on expanding its business in the Middle East markets by shifting its focus from Europe
and America due to the increasing number of middle class population and growth in disposable
income within their economies (Vrontis and Vignali,2015).

Socio-Cultural factors
With effective business strategies across the global market, Nestlé is likely to capture the
consumer behaviour which in turn increases its operational efficiency and productivity. The
success of Nestlé in Africa country respective to their socio-cultural aspects is presented as an
example (Davies, 2000). The production of chicken bouillon cubes by Nestlé is widely used to
enhance the flavour of dish in developed countries; however, the low income groups in Africa
directly mix rice with this cube. Hence, to customize the product with the local consumption
habit and storage conditions, Nestlé has focussed to introduce small packets of bouillon chicken
cube, so that the middle group can easily have one piece in their meal.

Technological factors
Nestlé is the proud owner of the largest R&D department for its wide range of food that are
served across the world. The company has been consistent in producing healthy and nutritious
food as a result of its strong capacity and great benefits its potential from its capacity and
associations of strong research centres. With the advancement in technology, Nestlé has
experienced opportunities for its new product lines, improvement in product, innovation
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marketing and promotion strategies such as online stores and e-commerce (Harzing, 2004).
Nestlé leverage its competitive advantage of efficient world-class R&D to become the lead in
food and beverage industry.

Description of Industry Structure

Nestlé is a Swiss multinational company mainly manufactures health and nutritional goods. The
wide product range of Nestlé include breakfast cereals, baby food, confectionery, ice-cream,
bottled water, snacks, pet food and coffee, dairy products, etc (Vrontis and Vignali,
2015).Nestlé’s vast industrial spread across 150 countries, include 461 factories that employs
more than 330000 people. The corporate business principles of Nestlé is entirely based on their
culture, that was developed 140 years ago, that reflects the ideas of honesty, long-term thinking
and fairness. The history of Nestlé dates back in the year 1866, when the the Swiss condensed
milk company developed thefirst Eur`opean condensed milk factory in Cham Switzerland.
(Pritchard and Fagan, 1999). The main objective of Nestlé is to provide safe, nutritional and
tasty food to its consumers so as to improve the health and wellbeing of its consumers. Nestlé is
committed to its huge network of R&D to develop new food products with significant health
benefits, in order to meet the changing taste of consumers (Vrontis, D. and Vignali, 2001).

The food and beverage industry is highly competitive due to the presence of potential players
such as Kraft foods, Danone, etc. The competition becomes stiffer, with equal strength of
competitors in the market. For instance, the joint venture between Nestlé General Mill could
bring significant changes in the breakfast cereal; hence, such collaboration is successful, which
in turn makes the industry all more high performing (Saphan,2014). One of the main
shareholders of Nestlé is L’oreal, the leading cosmetic company, whose collaboration has
significantly enhance their operational efficiency.

Issues/problems facing the industry

Majority of consumers are motivated to purchase nutritional products that are closely aligned
with their health and well-being. Manufacturing of such products are done by eliminating
artificial ingredients, pesticides or GMO’s, etc. Such consumption behaviour has resulted in the
development of cleaner labels, thereby increases products in the non-GMO and organic segments
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(Kumar, Massie and Dumonceaux, 2006). This puts more pressure on the food and beverage
industry as majority of companies find it difficult to adapt the trend.

Unlike the industries of consumer appliances, electronics and household products those have
already gained a firm establishment in the e-commerce space, food and beverage manufacturers
are significantly slow in their propagation towards e-commerce. As more number of consumers
are shifting their preferences towards the online shopping, the manufacturers are lagging behind
until they find ways to adapt e-commerce as the key part of their marketing and sales.

Industry Prospect and overall attractiveness

Attractiveness
The food and beverage industry is characterised by oligopoly, with the intense presence of
Nestlé, Kraft Foods, Denomne performing well. With the advancement in technology, faster
information technology and better infrastructure has increased the invention of newer products
thereby facilitating the manufacturers to establish their brand image more firmly (Hasan, 2015).
The enhancement in consumers’ standard of living, especially in the emerging markets is another
great prospect for the producers.

Unattractiveness
Unlike the electronics, consumer appliance and household product industries that has developed
a strong presence online through e-commerce, Nestlé is slow in developing their presence online.
The increasing preference of consumers for online shopping is making the industry unattractive
to a great extent.

In addition, major organisations like FDA and WHO is appearing with policies against high
sugar intake and thereby recommending a cap of no more than 10% of daily calories
(Harzing,2004). As a result, consumers are not purchasing foods that have high in sugar. This is
another means of unattractiveness presented by food and beverage industry.
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Analysis of Competitive forces

PORTER’s five forces analysis

According to Hasan (2015), Five forces analysis determines the position of a company respective
to its rivals. This strategic analytical tool helps the company to formulate strategies in order
improve the profitability, thereby making it less vulnerable.

Threat of new Entrants

Nestlé being a well known brand has been serving the market over a century and hence,
developed a strong presence in the industry by boosting its quality products and customer
satisfaction, which has made it imperative for the company to enjoy a substantial share of the
profitable market (Kent and Doherty, 2014). Consequentially, new entrants must impart
sufficient effort to seize a considerable portion of the Nestlé’ market share in order to establish
their position in the industry and survive. As a result of which, Nestlé is the main target of the
new entrants; hence, the rate of threat is moderate.

Consequentially, the threat of new entrants is low.

Bargain Power of Customers

Customers enjoy huge bargain power in regards to their consumption of Nestlé products, due to
the presence of abundant substitute. Substitute of Nestlé products allows enough preferences for
the customers, thus having significant influence on the consumer purchase behaviour. Nestlé
acknowledge the consumer power and has taken considerable measures to customise their range
of products according to the changing taste of customers (Kumar, Massie and Dumonceaux,
2006). Hence, the bargain power of customer is high.

Competitive Rivalry
Nestlé was facing intense competition at the regional and national level due to the presence of
potential rivals in the food processing industry such as the Unilever, Kraft, and Masterfoods.
These powerhouse companies were in consistent effort to outperform one another without
leaving any space for the competitors. Nestlé was experiencing fierce competition from the
industry rivals as the giant players has gained considerable market share due to their improved
performance and operating efficiency. The fierce rivalry within the food processing industry has
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facilitated the consumers with enough bargain power which is again a threat for Nestlé and the
other potential brands (Markides and Charitou, 2004). As a result, Competitive rivalry is strong.

Bargain power of suppliers

Due to the brands large purchasing power, the suppliers and agricultural commodities offer
products that are far from unique to Nestlé. Consequentially, Nestlé enjoys a large bargain power
than its suppliers. In addition, Nestlé ensure the quality of raw materials while purchasing from
the suppliers by maintaining a long term and trustful relationship with them (Mohajan, 2015).
Nestlé also offers useful advice to its suppliers on reducing the unnecessary costs and perform
more efficiently in future. Thus, the bargain power of suppliers is low.

Threat of Substitute
Nestlé is subjected to threat of substitute goods due to the intense competition within the
industry. The wide range of similar products that include frozen food items, confectioneries, milk
products, ice-creams and pet foods tends to give tough competition to Nestlé. As the competition
is extremely violent, Nestlé must emphasize on finding new ways to improve its products and
increase the product lines, generate new means to develop sustainable growth and expansion in
future (Nestlé, 2011).
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Competitor analysis
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Task 2

Strategic performance Indicators

Internal analysis drawing on relevant models

Excellent potential of R&D serves as the foundation of growth, learning and effective
performance for Nestlé which in turn has enabled it achieve stupendous internal business
processes (Pritchard and Fagan, 1999). High valued business activities due to its strong internal
capabilities has enabled Nestlé Company to achieve product diversity, serve best customer
services with guaranteed satisfaction, which in turn helps them to optimise its value to the
stakeholders and realise the financial goals.

SWOT analysis of Nestlé Company

Strengths
 long operating history of more than 140
years
 it has operated factories in more than
77 countries across six continents
 Strong capacity of R&D
 Reputed as the innovation leader in the
sector of global nutrition and food, with
the efficient team of 3500 scientists
representing their R&D network.
Threats
Weaknesses
 less research on consumer preferences
 product recall is increasing which in
turn hampers the company’s brand
equity
 Nestlé’s entrance into the mature
market gives them a tough competition
to their sustenance.
Opportunities
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 Nestlé’s attempt to enter the already  Nestlé leverage its strong brand name
mature markets can be a threat to its and reputation of efficient performance
growth and brand image over the years to grab the eminent
 The company has potential competitors opportunities offered in the industry
across the globe  Ranked first and became the market
 The increasing price of raw materials leaders (Saunders and Guoqun, 1996).
make it difficult for Nestlé to introduce  Nestlé offers health based products
new product lines which is becoming extensively popular
 The industry is highly competitive as across the world,
the multinational companies are
extremely organized with strong
financial potential.
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Competitive strength versus Key rivals

Strategic Issues
Nestlé has been facing a number of strategic issues as a result of its extended operations
worldwide. The company is facing difficulty in coping up with huge logistics cost and storage
issues due to their transportation of ingredients and products internationally (Bradley, 2014).
Secondly, due to its vast spread internationally and diverse range of product portfolio, the
effectiveness of coordination and decision-making between the country specific headquarters and
sites decreases gradually.

In addition, Nestlé’s consistent promotion of its new and innovative products is not always
worthwhile, as some of its products or inventions are not understandable or not appropriate for
specific regions or countries.
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Task 3

Strategic plan and Action recommendation

Basic strategic direction

The strategic mission of Nestlé is to become the world leader in health, nutrition and wellness.
Company’s mission statement of good food and good life focuses on providing its consumers
with the most nutritious choices incorporating wide range of food and beverage categories.

Nestlé follows the four main strategic objectives that include enriching the life of customers with
best products, To gain excellence in operations through their exclusive R&D network and talent
group working together to make innovative new range of products each time (Boyd,2012).
Financial gain is achieved with efficient performance and acquisition of more number of
customers. Consequentially, they have increased their shareholder returns by 25% by the end of
5 years.

Overall Business strategy

As defined by company has the choice to adopt three strategies to cope up with the competitive
edge of the industry that include cost-leadership, differentiation strategy and focus (Harzing,
2004). On analysing the Nestlé Business principles, it is evident that the company has adopted
low cost and product differentiation strategy to win over its competitors.

Differentiation strategy by Nestlé

Nestlé adopted the differentiation strategy by offering extended range of high quality products
that are offered at a premium price range. Nestlé boost its presence as the leading food and
beverage producer across the globe due to its extensive core capabilities and resources that
supports its huge R&D network. As a result of which Nestlé is able to deliver high quality,
innovative and nutritious products to its customers, unlike its competitors. Moreover, Nestlé
actively distinguishes its products from its competitors by taking advantage of its talented
employees, distinctive features of its products, advanced technological background, stupendous
services and worthy advertising campaigns (Hasan, 2015).
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Cost-Leadership strategy
Nestlé has achieved distinctive competitive advantage with its cost-leadership strategy. The
company emphasize on producing and marketing its products at a lower cost in comparison to its
competitors. Such an approach was easily adaptable by Nestlé due to its economies of scale in
product manufacturing, raw materials and marketing. Nestlé’s attempt to grasp the market share
and building a strong base of customer loyalty in majority of developing countries was attained
by promoting its wide range of products at an affordable and low price cost (Kent and Doherty,
2014).

Economic analysis
Nestlé has attained outstanding performance in the year 2014, as a result of which their
shareholders has gained satisfactory dividends. Nestlé is significantly disciplined and
consistently drives its performance in line by following the company’s model of resource
efficiency and profitable growth. However, the company has not been successful in obtaining
higher income in the consecutive year due to decline in the sales of the product. Therefore,
Nestle is required to focus on their market capability and opportunities to enlarge the
organisational activities around the world.

Figure 1: Net Income of Nestle

Source: (Financial Times, 2016)

Due to decline in the net income of the company in 2015, the return on assets was 6.59%, return
on equity was 13.69% and for the same year return on investment was 9.03%. Therefore, it could
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be indicated that the performance of the company is low which can create problem in
maintaining the market share.

Figure 2: Assets and Debt amount of Nestle

Source: (Financial Times, 2016)

As per the balance sheet of the company, the growth in the total assets value is not stable.
However, the total value of the assets is more than the value of debt. It indicates the company
can use its assets for clearing the due debt.

Ratio and Liquidity Analysis

Current Ratio

Figure 3: Current Ratio

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1.05 1.032

0.95
2015
0.9 0.88
2014
0.85

0.8
Current Ratio

Source: (Nestle, 2016)

It can be viewed that liquidity position of the company is not good. It suggests that the company
might be facing problem in managing its working capital cycle. Also, it can be assumed that, the
firm may be taking too much time to meet their short term obligations.

Net Profit Margin

Figure 4: Net Profit Margin

22.5
21.9
22
21.39
21.5
21 20.61
20.5 2015
20 2014
19.5 19.1 2013
19 2012
18.5
18
17.5
Net Profit Margin

Source: (Nestle, 2016)

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From the above graph, it could be observed that the company is not being able to maintain their
profit margin and it shows a declining trend year after year. The sales of the company have
significantly dropped in spite of increasing marketing and administration expenses in the year
2015. The declines in the sales and profit have impacted the earnings per share which has
dropped to 2.90 million in 2015 from 4.54 million in 2014. If such performance continues in the
future then company can fall into huge losses or debts.

Debt to Equity Ratio

Figure 5: Debt to Equity

0.96 0.9377
0.94
0.92
0.9
0.88 0.8564 2015
0.86
0.84 2014
0.82
0.8
Debt to Equity

Source: (Nestle, 2016)

It can be seen from the above graph that Nestle is using more of debt than equity for financing its
projects or operations. The ratio has significantly increased in 2015 which indicates that the
company might face financial risk if it does not take serious measures or actions. On the other
hand, it could also be assumed that the company may not be able to accumulate enough cash for
satisfying its debt obligations.

Financial Forecast

The market performance and opportunities of the Nestlé’s brand helps in forecasting increase or
decrease in the dividend in subsequent fiscal years. It has predicted that dividend would grow by
approximately 2.27%.

Figure 6: Dividend Forecast

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Source: (Markets.ft, 2016)

Figure 7: Revenue Growth Forecast

Source: (Markets.ft, 2016)

Despite of decline in sales revenue and profit, it is assumed that the company would be able to
increase their revenue by 1.63% annually. Through investing on product quality and marketing
opportunities, the company would be able to generate positive revenue in future.

Nestlé’s strategic trajectory

The international market has always been instrumental for every multinational company in order
to develop a strong market of consumer products. Facts reveal that 95% revenues are generated
from its international businesses. Nestlé has a wide extension due to its global geographic
organisational structure that has enabled the company to become proactively involved in
international business rapid expansion (Markides and Charitou, 2004). As Nestlé has the
background of stable technology and mature product lines, in order to attain low-cost
manufacturing within the international countries.
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With the aim to open up new market opportunities, Nestlé has merged with the manufacturer of
Maggi soups and seasonings and acquired the Crosse and Blackwell who is a famous British
manufacturer of canned and preserved foods. Moreover, Nestlé has undertaken a number of
acquisitions and merging throughout the decades. Nestlé’s establishment of a joint venture with
the Coca-Cola and Beverage partner worldwide is also a strategic move to shift its focus from
milk and confectionery items to beverages (Mohajan, 2015). The strong alliance with the
companies allows them in effective planning to develop the beverage business of black tea and
green tea. Nestlé leverage its brand image as the key source of its competitive advantage. In
order to break away from its current industry, the company has established and entered into joint
ventures in order to develop its growth in new business areas that relates to fitness (Nestlé,
2011). Nestlé shift into the business segment of nutricosmetics under the brand name of Inneov,
was a result of its joint venture between Nestlé and L’oreal. Through its affluent capability in
research and development, Nestlé leads the industry with innovation and thus providing
maximum flexibility in product portfolio.

Major functional support strategy

Information technology and Control system

Following the guidance presented by Company’s quality policy, Nestlé is focused on building
trust by offering appealing services and products that satisfies the expectation and preferences of
customers. The company strictly comply with the external and internal food quality, safety
regulations. Nestlé has designed and established a common technology infrastructure and control
systems which integrates all of its businesses focusing on the key objective of quality (Pritchard
and Fagan, 1999). As stated by Saphan (2014), advanced information technology has significant
impact on the design and management of organisation in four aspects that include
decentralisation of organisational structure, improved relationship within organisations,
enhanced horizontal coordination and better network facilities. During the initial phase of its
business operation, Nestlé allowed its local subsidiaries to conduct their business independently.
Nestlé gradually realised that independent operation is leading to local differences which in turn
is causing inefficiency and extra costs as a result of which Nestlé could not compete effectively
in the market due to the lack of standard business processes.
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Hence, Nestlé took a strategic move by incorporating company-wide instalment of SAP

enterprise resource planning software, in order to integrate significant applications on material,
accounting and distribution (Saunders and Guoqun, 1996). This strategic move from traditional
information and control technology to SAP ERP system has helped Nestlé to collect information,
process them to deliver the entire operational feedback that include processing of order,
designing of products, purchase of raw materials, inventory, manufacturing and distribution,
human resource, payment receipt and forecasting of the future demand.

Eminent failure
Nestlé performance was greatly criticised by the WHO due to their promotional ideology of
persuading mothers by stating that infant formula are better for their babies than breast milk.
However, Nestlé experiences a situation of locked-in customer, due to the reason of mothers
switching to powdered milk and stops feeding breast milk, which in turn close downs her
capability of producing milk. Critics of Nestlé argued the fact that mothers those are switching to
instant formula feeding can even lead to the death of infants (Vrontis and Vignali, 2001).
Consequentially, Nestlé faced boycott due to the infant formula controversy which is again an
eminent failure of the company. In response to handle WHO criticism, Nestlé started close
operation with the International Council of Infant Industries (ICIFI), which is known to be the
self-regulatory organisation of the industry. After Saunders and Earnest was elected as the
president of ICIFI, they immediately started the negotiation process with WHO as a result of
which the boycott to Nestlé’s infant food products finally ended on 1984.

One of the biggest failures in functional food and beverages include the Nesfluid. According to
the functional food expert, Julian Mellentin, Nestlé’s failure in the launch of its Nesfluid was
more of a confusing launch as the brand promised hydration, nutrition and alphabet soup as
health benefits in a dubious tasting beverage range. Statistics reveal that, Nesfluid was
competitively priced product which was supported by huge marketing investment, but the
product achieved very modest sale, hence it was withdrawn within 18 months of the launch
(Yap, Yong, and Poon, 2010). The main reason of its failure was subjected to Nestlé’s attempt to
explore the mass market by adding various product ranges together that involve combination of
hydration and nutrition, mixing up with coconut water and blending whey protein.
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Recommendation

Short-term action recommendation

Nestlé company is proactive in every phase of its operation. For example, Nestlé was the first
company in Europe to introduce biodegradable ingredients for water bottles. However, Nestlé’s
lack in vertical integration makes it difficult for them to accomplish the aim of being the
proactive leader. This is a significant vertical integration issue. Nestlé is recommended to
implement vertical integration which also helps them to become cost effective.

Long term action recommendation

The sales and market share of Nestlé has been dropping down significantly, due to the failure of
some of its top selling products such as Nesfluid and Maggi. These products were scientifically
proved to contain hazardous chemicals that are harmful to human health. Nestlé must focus on
transforming its brand image and reputation to a health, nutrition and wellness leader, by
connecting to a network of experts who can help to invent the present and upcoming products
into more healthier and GMO free. Moreover, Nestlé is experiencing a decreasing sale in their
chocolate and confectionary segment. In addition, the water segment of Nestlé Pure Life is also
lowering the operating margin. Nonetheless, high sugar products of Nestlé do not align with the
principle of health and wellness of consumers. In order to improve its operational efficiency and
brand image, Nestlé must focus on utilising its R&D network to introduce healthier products
along with the assurance of quality and product safety.
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