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Assignment 1 574 GBS0904A University of Greenwich

Business strategy (University of Greenwich)

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ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 32: Business Strategy (574)

Submission date Date received (1st submission)

Re-submission date Date received (2nd submission)

Student name LÊ TRẦN UYÊN THẢO Student ID GBS200505

Class GBS0904B Assessor name Huỳnh Ái Vân

Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I
understand that making a false declaration is a form of malpractice.
Student’s signature:

Grading grid
P1 P3 M1 M3

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rSummative Feedbacks: rResubmission Feedbacks:

Grade: Assessor Signature: Date:
Internal Verifier’s Comments:

Signature & Date:

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TABLE OF CONTENTS
A. INTRODUCTION ........................................................................... 4
B. BODY ........................................................................................... 5
I. STRATEGIC CONTEXT ................................................................................................ 5
1. Strategy statement ..................................................................................................................... 5
2. Role of business strategy ............................................................................................................. 7
II. MACRO ENVIRONMENT PEST: ................................................................................. 8
1. Political ...................................................................................................................................... 8
2. Economic .................................................................................................................................... 9
3. Sociological ............................................................................................................................... 12
4. Technological ........................................................................................................................... 14
III. PORTER’S FIVE FORCES: .............................................................................................. 15
1. Threat of New Entrants – Low ................................................................................................... 15
2. Bargaining Power of Suppliers - Low .......................................................................................... 16
3. Bargaining Power of Buyers - Low: ............................................................................................ 16
4. Threat of Substitute - High ........................................................................................................ 16
5. Rivalry Among Existing Firms - High ........................................................................................... 17
IV. OPPORTUNITIES & THREATS: ............................................................................... 17
1. Opportunities: .......................................................................................................................... 17
2. Threats: .................................................................................................................................... 18
V. STAKEHOLDERS ANALYSIS: .................................................................................... 19
STAKEHOLDERS MAPPING ................................................................................................................... 19
VI.DISCUSSION: ......................................................................................................... 21
1. Key drivers of changes: .................................................................................................................... 21
2. Forecasting: ..................................................................................................................................... 23
3. Comparisons with competitors: ...................................................................................................... 24

C. CONCLUSION ............................................................................. 26
D. REFERENCES .............................................................................. 27

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A. INTRODUCTION
As a business consultant at Deloitte LLP. Our company provides consulting services ranging from conducting
internal and external analysis, strategic planning, strategy implementation and strategic evaluation to
companies of various sectors. Currently, our company is receiving orders from Nestle company operating in
the food and beverage sector and the CEO of Nestle wants our company to help them carry out a
comprehensive audit of the organization includes an assessment of both the company's internal and external
environments. Based on these analyses, they would also like to have some strategic recommendations that
they should pursue in the future. Therefore, this assignment will address the above issues in the most specific
and clear way.
COMPANY INTRODUCTION: Nestle is a Swiss global food and drink handling aggregate partnership
settled in Switzerland. It is the biggest food organization on the planet, estimated by incomes and other
measurements, since 2014. It also has a considerable influence on the local and global industry. Founded
more than 150 years ago, Nestlé is the world's largest and most diversified food and beverage company.

NESTLÉ’S INFORMATION
Corporation name Nestlé
Business name Nestlé S.A
CORPORATE OFFICE:
Address Switzerland Nestlé Suisse S.A. Rue Entre – deux - Villes 10 1814 La Tour-de-Peilz
Switzerland
Found year 1866
Founder Henri Nestlé
Tel No. +41 21 924 51 11
Email presse@ch.nestle.com
Website https://www.nestle.ch/de
Company Type Multinational Company
Total Capital 137,000,000,000 CHF (Switzerland Franc)
Includes a wide range of brands from food and beverages to health care nutrition and pet -
Operating sectors
care.
Baby foods, Bottled water, Cereals, Chocolate & confectionery, Coffee, Culinary, chilled &
Products
frozen food, Dairy, Drinks, Food service, Healthcare, nutrition, Ice cream, Pet care, Recipes
Structure of
Private Enterprise
Ownerships

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B. BODY
I. STRATEGIC CONTEXT
1. Strategy statement
a. Goal:
Mission: Nestlé is the world's leading nutrition, health and wellness company. Their mission of "Good Food,
Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and
beverage categories and eating occasions, from morning to night (Mission and Vision, 2021 ).





Source: Annual Report 2020
Vision: To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved
shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier selling
preferred products (Mission and Vision, 2021).
Objective: Company’s objective is to be the world’s largest and best branded food manufacturer
whileinsuring that nestle name is synonymous with the products of the highest quality.
b. Scope:
Type of industry: Food processing

Manufacturers: Nestle is a manufactured

corporation that manufactures many
products e.g, MAGGI Food Products,
KITKAT Chocolate, NIDO Milk Powder,
EVERYDAY Milk Powder, NESTLE Milk Pak,
etc which are sold in Switzerland and
other countries.
Source: Annual Report 2020

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Consumer information: Nestle company aims to communicate responsibly to consumers, particularly to

children, so all Nestlé companies are required to abide by the Nestlé Consumer Communication Principles,
over and above any applicable laws. Consumer communication is a two-way issue. The rise of digital media
such as the Internet, social networks and mobile communications has changed the way Nestlé interacts with
consumers. In addition, consumer expectations for tackling social issues such as fighting obesity in children
and reducing environmental pollution are higher than ever. In this context, Nestlé needs to demonstrate a
responsible and prudent approach to consumer communication, both at the brand level and at the corporate
level. Nestlé's Communication Principles are defined as the highest standards on which all marketing
activities and consumer communication are based.
c. Capabilities:
One of Nestlé's main competitive advantages is its research and development (R&D) capabilities. Nestlé's
R&D skills can also be obtained from its R&D network. The company has the largest network of R&D centers
for food and beverage companies in the world, with 34 R&D facilities and more than 5,000 employees.
pellets. Nestlé's R&D capabilities are off the charts. Over the years, they have invested heavily in their R&D
department. According to their annual report, a staggering $1.576 billion has been spent on research and
development in 2020. Nestlé scientists also help educate consumers about the health and wellness benefits
of their products. Nestlé nutritionists are active around the world, ensuring that all nutritional
communications, both inside and outside the pack, are community-based and scientifically sound. Beyond a
healthy diet, the future of food is increasingly determined by science.

Source: Annual Report 2020

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2. Role of business strategy

a. Levels of strategy:
Corporate strategy: Corporate strategy is a single plan or framework of a long-term nature, designed with
the aim of achieving a competitive advantage over other market participants while also delivering on
customer and stakeholder promises (Burniegroup, 2020).
è Nestlé CEO Paul Bulcke has placed Nestlé on a path towards sustainable global competitiveness through
the following strategic 'pillars', such as low costs and high operational efficiency; improving and innovating
the Nestlé product line; universal availability and adaptability of products to local market conditions with a
focus on meeting the needs of today without compromising the ability of future generations to meet
customers need. (Nestle, 2020).

Business strategy: A business strategy is a set of guiding principles that, when communicated and adopted
within an organization, will produce a desired decision-making model (Michael D. Watkins, 2021).
è Nestle accelerate growth by investing behind strategic drivers such as: High-growth categories of coffee,
pet care, nutrition, water and nutritional health science. Company had increased demand for healthier food
products. The company also get acquire startups in producing well-being products. Many new companies
being formed and introduce new products for the well-being or revolutionize the way products are made.
So, Nestle is just focused on providing more welfare products and this is an excellent opportunity to expand
its portfolio. (Nestle, 2020)

Functional strategy: Functional strategy is the approach taken by a business function to achieve the goals
and strategies of the company and business unit by maximizing the productivity of resources. This is a
relatively small plan that provides goals for a specific business function (Mithun Sridharan, 2021).
è Firstly, the MILO Nutrition Campaign emphasizing on the nutritional benefits of the MILO. Secondly,
Nestlé’s involvement in the contract farming for fresh chillies with local farmers continues using the best of
the chilli crop for its range of culinary sauces. The Milks category will continue to drive the Group’s vision of
being a recognised Nutrition, Health and Wellness company and finally the Infant Nutrition field will be
continued to chart new ground by focusing on science based, stage-appropriate innovation and renovation.
(Nestle, 2020)

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b. Branches of strategy:
Context involves both internal and external factors. Research focuses on industry analysis, cultural analysis
as well as resource-based vision. The strategic location has a strategic impact on the external environment
on the strategic capabilities, goals and culture of the organization (Econpost, 2021).
Content focused on strategic options and research focused on the performance of options. Strategic choice
involves strategic choices in the directions in which strategy and its methods (Econpost, 2021).
The process includes training and implementation. His research includes strategic planning, choice and
change, strategy and practice. Strategy in action is about how strategies are conceived and how they are
implemented. These include: process, assessment, organization, change, and practice (Econpost, 2021).

II. MACRO ENVIRONMENT PEST:

1. Political
Although political changes regularly influence the organization, moving tasks out of the nation influences the
insecure climate for Switzerland. Losing Nestlé implies lost more than 300 positions, affecting the effectively
dubious political Swiss atmosphere. There are very few organizations can affect political soundness, however
Nestlé can.
Political Stability: Switzerland earns the No. 1 spot for perceived political stability, also ranking No. 4 overall
in the Best Countries rankings. The country, famous for its impartiality, is led by President Guy Parmelin, who
took office at the beginning of 2021, and also ranks highly for quality of life and safety. Switzerland has low
unemployment, a skilled labor force and one of the highest gross domestic products per capita in the world,
according to the CIA World Factbook. The country’s strong economy is powered by low corporate tax rates,
a highly-developed service sector led by financial services and a high-tech manufacturing industry.
Taxes: Switzerland levies a direct federal CIT at a flat rate of 8.5% on profit after tax. Accordingly, CIT is
deductible for tax purposes and reduces the applicable tax base (i.e. taxable income), resulting in a direct
federal CIT rate on profit before tax of approximately 7.83%. In Switzerland, the Corporate Income tax rate
is a tax collected from companies. Its amount is based on the net income companies obtain while exercising
their business activity, normally during one business year. The benchmark we use refers to the highest rate
for Corporate Income. Revenues from the Corporate Tax Rate are an important source of income for the
government of Switzerland.

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Source: tradingeconomics.com

Through the above factors, it can be seen that in 2021, the Corporate Income tax rate has decreased sharply,
leading to a significant reduction in Nestle's tax. Therefore, it can be seen that the development of Nestle
company is also somewhat dependent on the taxation of Switzerland's government. However, because
Switzerland is a country with low corporate tax rates, Nestle company also develops sustainably and long
term here.

2. Economic
Inside the most recent few years, Nestlé has been in a rise for benefit. Truth be told, in 2019, the
organization's benefits expanded by in excess of 40%. As indicated by the organization, benefits changed
from $7.6 billion to $10 billion. A lot of this achievement is because of three things: The US market, the
Chinese market, and auctioning off its candy store business.
Inflation: Nestle raised its full-year sales target on October 2021 after the world’s largest food group reaped
the advantages of price hikes on its products starting from pet food to drinking water with a forecast-beating
third quarter. The Switzerland-based firm, whose shares rose over 3%, has moved earlier than other
consumer companies en passant on higher input costs to consumers, leveraging the strength of its brands
like Purina pet food and Perrier water.

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Like its peers, Nestle is grappling with supply chain constraints because the world economy roars out of a
COVID-19 slump. But the maker of KitKat bars and Nescafe said prices for its products rose 2.1% within the
third quarter, helping keep its margin steady at about 17.5% this year, followed by an increase next year.
Nestle shares, up 8% this year, climbed 3.7% by 0804 GMT, exceeding the 1.7% rise across the ecu food
sector. Nestle has guided for a 4% rise in input costs this year and said last month it expected cost inflation
to be higher in 2022.

Source: reuters.com

GDP: The Gross Domestic Product
(GDP) in Switzerland was worth
752.25 billion US dollars in 2020,
according to official data from the
World Bank. The GDP value of
Switzerland represents 0.67 percent
of the world economy.

Source: https://tradingeconomics.com/switzerland/gdp

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Economic Growth: Nestlé's profit stream and growth in the confectionery industry is estimated to increase.
It has grown by more than 40% in 2020. As a result, the company's profit increased from $ 7.6 billion to $ 10
billion. However, according to the official report presented on the website of Nestles, the overall growth of
the company has increased by about 3% at the end of 2020.
Organic growth reached 7.6%, with real internal growth (RIG) of 6.0% and pricing of 1.6%. Growth was
supported by continued momentum in retail sales, steady recovery of out-of-home channels, increased
pricing and market share gains.Total reported sales increased by 2.2% to CHF 63.3 billion (9M-2020: CHF 61.9
billion) exchange reduced sales by 2.0%. Net divestitures reduced sales by 3.3%.
Continued progress in portfolio management. On August 9, 2021, Nestlé completed the acquisition of the
core brands of The Bountiful Company. Full-year guidance for 2021 updated: Nestle expect full-year organic
sales growth between 6% and 7%. The underlying trading operating margin of profit is anticipated around
17.5%, reflecting initial time delays between input cost inflation and pricing, similarly because the one-off
integration costs associated with the acquisition of The Bountiful Company's core brands. Beyond 2021, their
mid-term outlook for continued moderate margin improvement remains unchanged. Underlying earnings
per share in constant currency and capital efficiency are expected to extend this year.

Source: globenewswire.com

Interest Rate: Nestlé, as a global multinational brand, faces many exchange rates from different countries.
Even a small change in the price of the exchange rate, it will have a huge impact on the company's revenue.
It depends on the region and the location of the country as exchange rates have different effects on different
markets.

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3. Sociological
In the 21st century, the part of sociocultural elements with regards to business has likewise kept on
developing further. It is because society and social factors are fundamental to business. Globally society and
cultures starting with one area then on the next. These elements additionally definitely affect interest and
how and what individuals buy. Because of the developing effect of socio-social factors, integrating them into
the marketing strategy helps establish a better connection with the customers in various societies and
cultures.
Individuals' tastes and styles likewise shift from society to society and culture to culture. Because of these
things, it is significant for organizations to consider these varieties to get their item and advertising
methodologies right. Nestle has brought an enormous scope of items and a considerable lot of these are
customized to the preferences and necessities of clients in explicit business sectors. These help drive deals
and benefits in the local business sectors. Nestle also considers sociocultural factors while marketing its
products in specific markets and designs ad campaigns accordingly.
Public attitude to food: The social climate, including the perspectives, purchasing practices, and evolving
socioeconomics, all influence a business. What's influenced food and drink organizations like Nestlé is the
public's fixation on smart dieting. Individuals need to devour less sugar and lower calorie nourishments. The
social environment, including attitudes, purchasing behavior and demographics, all affect a business. What
has really affected food and beverage companies like Nestlé is the public obsession with healthy eating.
People want to eat less sugar and lower calorie foods. This represents a major challenge for the company.
But Nestlé is aware of the challenges of growing trends and people's lifestyles. This is why the brand is
working on reforming cooking preparation processes by reducing the amount of salt, sugar and fat. It will
launch a newer, healthier Nestlé product that people want.
Social diversity: At Nestlé, they hire people who respect their values, they provide equal opportunities for
everyone, and they protect everyone's privacy. They do not tolerate any form of harassment or
discrimination because their goal is to create a workplace where everyone feels included and can fully
participate in their work. This commitment begins at hire and continues until the end of the hiring
relationship. Each of Nestlé's markets has a diversity and inclusion action plan designed to give everyone an
equal opportunity to contribute, grow and feel valued.

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Nestle has donated a lot of products, equipment, food and water to people in difficult circumstances,
disaster-hit countries and helped many children around the world:

1. Nestlé donates 88,000 medical face masks to Ministry of Health in the Covid – 19.
2. Nestlé donates Personal Protective Equipment (PPE) worth ETB 346 thousand to the Ministry of Health to
aid health workers in the fight against COVID – 19.
3. Nestlé Supports 100,000 families & 50,000 Health Professionals, Donates 10 Million Food & Beverage
Servings, 620,000 Water Liters in Middle East & North Africa Mobilization.
4. Nestlé donates 650,000 bowls of cereal to FareShare.
5. Nestle Water donates bottled water to Vernon schools for school year 2020.
6. Nestlé Switzerland has raised a staggering £700,000 for its Charity of Choice, Action for Children.

Source: nestle.co.uk

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4. Technological
It’s much easier to connect with audiences all over the world thanks to evolving technology. It also means
Nestlé has more options to increase production, food quality, and food availability to consumers. Some
companies are adopting blockchain technology to have full informational access to products — from
development to delivery. This is also an option for Nestlé, as it can decrease production time. At the moment,
it’s still a costly venture, and would need to be introduced slowly to each of Nestlé’s production lines.
Automation
Nestlé needs to spend more money on research and development. It has more technology at its disposal to
achieve greater feats in the R&D department; social media, digital surveys, email marketing, discounts… the
list goes on. Today companies are moving towards automation to reduce labor costs as labor costs contribute
significantly in expenses of company. To achieve the desired goals, the company has invested heavily in
technology such as real-time data. They also invest in different programs that help verify the nutritional
information of different products. To implement this plan, Nestlé has cooperated with a number of
authorities. Automation has decreased labor cost and quality of product has increased. To be competitive
Nestlé is using latest technology available in manufacturing of products.
Spending on Research and Development
With technological advancement people, can get information about latest product within few seconds which
has decreased the product life cycle.

Source: hurriyetdailynews.com

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OPPORTUNITIES THREATS
The current tax rate is low but it is likely to
1. Single-party country, stable politics. increase in the near future so the company
P 2. High quality of life and safety. must maintain the highest level of corporate
3. Low corporate tax rates. profits to deal with the problems that arise
within the company.

1. GDP, economic rate increase.

Faces many exchange rates from different
E 2. Poverty decrease.
countries.
3. High inflation.

1. More consumers from all ages.

Having problems in extraction and usage
2. More people are interested in
S healthy products.
because Nestle already owns too many food
products.
3. Diversity and inclusion action plan.

1. E-commerce growth Labor costs and product quality have

T 2. Internet user growth increased, so the company has to find a way
3. IT development to thoroughly solve this problem.

III. PORTER’S FIVE FORCES:

1. Threat of New Entrants – Low
The consumer food industry is diverse making it tough
for a brand new entrant. There are variety of entry
barriers. the present players hold large market
shares. they're well experienced and understand the
patron needs. they need developed customer loyalty over
time (Othman, 2014). per annum variety of latest entrants
enter the industry in an effort to grab market share even
at the local level. The prevailing companies have
developed strong distribution networks and economies of Source: https://learn.marsdd.com/
scale that allow that to supply and deliver at low costs. This
all makes the threat of new entrants low for Nestle.

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2. Bargaining Power of Suppliers - Low

Nestle holds the biggest market share within the industry. This
makes it a perfect buyer for the suppliers. Therefore, any
supplier that after starts supplying to Nestle never interferes with it
or attempts to bargain or influence the costs. Nestle, in return,
holds its supplier in esteem and takes care of them (Tavsar, 2013).
Nestle prefers long-term relations with its suppliers to confirm the
standard of the raw products. The switching cost for Nestle, if it Sources: https://learn.marsdd.com/
wishes to alter a supplier, is moderate because it will must enter into
new contracts and work to confirm quality form that new supplier.

3. Bargaining Power of Buyers - Low:

Due to a high level of competition, the bargaining power of the
buyers is high. they'll easily switch from one brand to a different,
Nestle or the other brands attempts to influence the market or
raise the costs. The switching cost is low for the consumers. There
are variety of companies that sell similar products. Nestle
recognizes this power of the buyers and strives to confirm that the
Source: https://learn.marsdd.com/
consumers of Nestle remain satisfied. These aspects have helped
Nestle develop brand loyalty from many of its buyers.

4. Threat of Substitute - High

Many of Nestle products like drinking water and milk have
substitutes that also are readily available. Many of the products
have homemade substitutes like baby food. There also
are allegations against a number of the products of Nestle as not
being healthy for consumption. This has led to the rise within
the sale of substitutes amongst health conscious people. Nestle
Source: https://learn.marsdd.com/
strives to spotlight the healthy aspects of its products so on tackle
the substitutes. Thus, the threat of substitutes is high for Nestle.

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5. Rivalry Among Existing Firms - High

The business wherein Nestle is developing every year and
is required to stay on doing this for a pair of years ahead.
A positive Industry development implies that contenders
are more averse to participate in competitive activities
since they do not must catch a chunk of the pie from each
other. The products produced within the industry within
which Nestle operates are highly differentiated. The
strategies of the firms within the industry are
diverse, which implies they're unique to every other in Source: https://learn.marsdd.com/
terms of strategy. Thus, competitive rivalry for Nestle is
high.

IV. OPPORTUNITIES & THREATS:

1. Opportunities:
Clear and accurate labelling indicating of any harmful products:
According to the study done by Delloitte, consumers are more likely to buy products that are clearly and
accurately labeled. Almost 62% consumers are more likely to choose products that are free of any harmful
products. 51% of the surveyed said that their decisions will be influenced by clear and accurate labelling and
47% would like to see clearly displayed information.

Nestlé, which has a history of providing misleading nutritional information on its labels should improve its
practices and clearly label the products and include all the necessary information in addition to nutritional
values.

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Transparency in material sourcing:

Consumers are becoming more and more conscious of where the food came from and how it was grown or
made. Many young consumers are placing sustainability as an important decision making factor when buying
their food. Social responsibility of buying ethically grown, sustainable foods is often more important that
price. Nestlé could start sourcing all of its materials from sustainably grown plantations and farms.
Growing number of small food startups
There is a growing number of food startups that are looking for ways on how to disrupt the food industry.
According to CB Insights, food startups raised nearly US$5.5 billion in 2019, indicating a significant support
for the food startups. In the current situation, where the established brands are losing sales and the capital
is still very cheap, Nestlé could increase its investments in startups that will help the company to meet the
future challenges and increase the sales.

2. Threats:
Poor quality water and its scarcity
Beverages, make over 25% of the total Nestlé’s sales and water is used in all of their production. Bottled
water products alone generate 8% of the total company’s revenue. Water is scarce and is becoming even
more scarce due to the factors such as climate change, growing populations, overexploitation of resources,
the increasing demand for food products, increasing pollution and the poor management of waste water.
Demand for water is increasing, and it will likely become more difficult for Nestlé to access both clean and
inexpensive supplies of drinking water, resulting in potentially increased production costs and therefore
lower profitability. The company also currently receives lots of criticism and negative publicity over its high
use of drinking water near the communities suffering from droughts. In the future, water scarcity will likely
become a more significant problem that will negatively impact company’s operations.
The price of coffee beans could significantly rise due to major weather disasters
Coffee generates over 10% of the company’s total sales and coffee beans are the major raw material used in
its production. Therefore, Nestlé’s profit margins are dependent, to some extent, on the price of coffee
beans, which over the past several years has been very volatile. The major reasons for such price volatility
are droughts, unusually high or low temperatures and many other weather disasters in Brazil and other
coffee-growing countries. In addition to those factors, growing demand has increased competition for the
best quality coffee beans and has pushed the prices up significantly.

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V. STAKEHOLDERS ANALYSIS:
Stakeholders are an individual, group, organizations or system who affects or may be stricken by an
organization’s actions.
Nestlé has 10 stakeholders, including:
• Communities • Industry and trade associations
• Customers & Consumers • Non-governmental organizations (NGOs)
• Employees • Shareholders and the financial community
• Governments • Supplier
Currently, the share register showed approximately 160,000 registered shareholders. If unprocessed
applications for registration, the indirect holders of shares under American Depositary Receipts and also the
beneficial owners of shareholders registered as nominees are taken under consideration, the whole number
of shareholders probably exceeds 250 000. The Nestlé team comprises around 273,000 employees, 29% are
based in Europe, 33.6% within the Americas and 37.4% in Asia, Oceania and Africa. Supplier may be a one in
every of the important stakeholder for the firm. Supplier provides the mandatory raw materials that the
firm’s have to produce its products.
Supplier could be a one in every of the important stakeholder for the firm. Supplier provides the mandatory
raw materials that the firm’s must produce its products. Their supplier base includes: direct suppliers
(approximately 165,000 companies), 680 000 individual farmers.

STAKEHOLDERS MAPPING
STAKEHOLDER POWER

High

Government Customers & Consumers

Non – governmental organizations Shareholders & financial community

Employees

Low

Industry & trade associations Suppliers

Communities

Low High

INTEREST

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STAKEHOLDERS THEIR ENGAGEMENT

Nestle works with various communities at the ground level to
1. Communities
ensure overall development of the community.
Nestle is starting to work with retailers and food service suppliers to do
and develop environments that encourage healthier diets and lifestyles.
Long-term collaborations with strategic partners may include messages
to encourage healthier choices future and online, placing healthier
options at checkouts, and responsible marketing communications
2. Customers & Consumers directed at parents and caregivers.
Consumers are the tip users of the products being developed by Nestle.
Also, this group can provide relevant insights for R&D. Although these
people won't be directly buying products of Nestle but these people play
a awfully important role in how the market perceives a specific product.
Nestle has got to make sure that their employees are satisfied so on
4. Employees ensure high levels of efficiency. Nestle’s “ Global satisfaction survey is
conducted to test the degree of employee satisfaction.
Nestle being one of the major companies in the country has to work as
5. Governments per the government directives. Nestle within the past has also worked
with the governments to enhance the lives of individuals.
Nestle needs to directly work with various industry and trade
associations so on ensure there's no non compliance on their end. Also,
such associations help in increase business for Nestle. Nestlé has been
6. Industry and trade associations
active within the International Special Dietary Foods Industries (ISDI),
which promotes high standards within the production and trade of
special dietary foods, since its foundation.
In recent years, representatives from the NGO has support Nestlé in
7. Non-governmental organizations
training auditors on animal health and welfare issues, and are helping
(NGOs)
establish a plan for extending its use of free-range eggs.
Shareholders play both direct and indirect roles in Nestle's operations.
8. Shareholders and the financial They elect directors who appoint and supervise senior officers, including
community the chief executive officer and the chief financial officer. They play an
indirect role through the stock market.
Nestle's suppliers are an integral part of their value chain, that's why
9. Suppliers they believe strong relationships with them are critical to business
success.

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VI.DISCUSSION:
1. Key drivers of changes:
During the crisis 2020-2021, Nestle has encountered 2 main drivers leading to changes for the company,
which is the growth of Nestle in the time of Covid 19 and the change of e-commerce for the company. Below
will be a closer analysis of these two changes, through which it is possible to see whether changes in the
environment negatively or positively affect the F&B industry (Johnson et al., 2017).

According to Statista data, in 2020, the growth
rate of the global food & beverage market,
calculated based on the net prices of producers
is $258.8 billion and will continue to increase in
2021, the market functional foods and
beverages globally valued at US$281.14 billion.
The market is predicted to grow at a compound
annual growth rate of around 9.5% from 2021
to 2028. For 2028, the market is forecast to be Source: statista.com

worth more than half a trillion US dollars.

7.3% organic growth: 6.7% RIG; 0.6% pricing. Nestle
saw high single-digit organic growth with strong RIG,
partially offset by negative pricing. Nestle posted mid
single-digit organic growth, based on positive RIG and
pricing. The underlying trading operating profit
margin increased by 50 basis points to 18.8%. Organic
growth reached 7.3%, with strong RIG of 6.7% supported by volume and mix. Pricing turned positive,
contributing 0.6%. Net divestitures reduced sales by 4.1%. Foreign exchange negatively impacted sales by
1.4%. Reported sales in Switzerland increased by 1.8% to CHF 10.2 billion.

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Second, e-commerce has currently become a solution to help businesses get out of the pandemic as well as
orient the market to enter a new phase in consumer shopping behavior. During the quarantine period, more
and more consumers are turning to e-commerce sites to buy essential products including food and beverage.
According to Nestle financial report 2021, e-commerce sales grew by 19.2%, reaching 14.6% of total Group
sales of the company. During the Covid pandemic, at a time when Switzerland was isolated, people bought
a lot of goods online, so the rate of online commerce has grown stronger than in previous years at Nestlem,
especially in the two areas of Nespresso and Nestlé Health Science.

Nespresso saw double-digit organic growth, reflecting continued expansion of the Vertuo system and robust
demand for the Original system. Growth was fueled by new consumer adoption, a return to positive growth
in boutiques and out-of-home channels, as well as innovation. New products included first organic coffee in
the Reviving Origins range, and the roll-out of Momento, a versatile touchless machine that creates specialty
coffees with fresh milk for out-of-home channels. Overall Nespresso gained market share, with contributions
from most markets. The underlying trading operating profit margin of Nespresso increased by 10 basis points.
Operating leverage and structural cost reductions more than offset increased consumer-facing marketing
expenses.
Nestlé Health Science posted double-digit organic growth, with a high base of comparison in half 2021.
Growth was driven by sustained momentum in e-commerce, new product launches and geographic
expansion. Consumer Care recorded double-digit growth. Vitamins, minerals and supplements that support
health and the immune system continued to see strong demand during Covid 19. Vital Proteins and Persona
more than doubled their sales. Garden of Life saw continued strength, particularly in e-commerce. Healthy
aging products grew at a double-digit rate, supported by Boost in North America, Nutren in emerging markets
and Meritene in Europe. Medical Nutrition reported mid singledigit growth, with robust demand for
Compleat, an adult medical care product, and Althéra, Alfaré and Alfamino pediatric care products.

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2. Forecasting:
In the near future, there are 3 forecastings that have been made for the Nestle company. First is the
establishmet of Resilient Communities. In recent years, Nestle has launched a plan to support disadvantaged
people in the country. So one prediction is that in the future, Nestle will build resilient communities that
focus on helping young people navigate and overcome barriers to employment, as well as improving the
livelihoods of farmers and rural communities who supply Nestle's raw materials. Maybe in the future, Nestle
will provide skills and opportunities to young people and farmers, and help rural communities diversify their
incomes.

Second is the “Nestle Zero Environmental”. Nestle relies on raw materials to make their products. To
continue to do so, Nestle plans to use raw materials responsibly, protecting these shared resources for the
future. Therefore, Nestle has forecasts and plans that from now to 2030, Nestle will strive to have zero
environmental impact in their operations, especially focusing on reducing the amount of juice, increasing the
amount of water. Increase use of renewable energy, keep waste out of landfills and innovate sustainable
packaging solutions.











Forcasting to ‘Net Zero’ Plan of Nestle

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Lastly is the forecasting of new technologies in Nestle. To accelerate innovation, Nestle's Technology team
has developed a specific program called Microsoft Power BI and Azure that can forecast future metrics based
on current metrics of PESTEL factors. In the near future, one forecast is that Nestle will leverage AI and data
analytics to develop data-driven business strategies. According to reports, Nestle has an adept framework
for making data accessible, interactive and democratized. Nestle will develop a centralized data warehouse
with Microsoft Power BI and Azure to develop a reliable business intelligence and data analytics platform
with high quality, scalable data.

Source: Microsoft Docs

When backed by powerful algorithms and data models, Nestle leverages the power of data to deliver the
best intelligence insights. According to Forbes, Nestle USA and Enterra Solutions have partnered to leverage
AI tools to enhance business decisions. This partnership is to achieve enhanced sales and marketing insights
by automating the decision-making process. By collecting a wide range of data, along with the development
of technologies Nestle will integrate advanced data analytics, machine learning and AI to establish the link
between supplier and consumer. Today, real-time data analytics plays a huge role in business growth. Nestle
understood this possibility at an early stage.

3. Comparisons with competitors:

Nestlé has several major consumer brands such as Kit-Kat, Carnation, Nescafe, Stouffers and Nestle-water
among others. The company is one of the most geographically diverse companies in the food and beverage
industry and this places it in a potion that assists in edging competitors. Its brands are well established in a
large market share in the largest economies such as U.S and Europe. Unilever and Danone are significant
competitors for Nestlé in that the two are food and beverage industry giants similar to Nestlé.

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Source: Wall Street Journal
In 2020 for instance, Unilever posted a 2.8% percent growth in sales profits due to its accelerated sales in
food and beverage, particularly frozen food, ice cream, tea based beverage and cooking products. Danone,
on the other hand, reported a 4.8% jump in its earning due to its increased share prices. An increase in its
sales for yoghurt also boosted the increase in earnings. Nestle, however, manages to position its self in the
market through the adoption of a new accounting method which facilitated a reduction in its cost of sales.
The company was also able to include allowances, discounts, and promotions for its retailers through the
sales proceeds instead of the marketing line. Though its sale was lower for the year at 4.4%, Nestlé managed
to match its peers which have made it a leading manufacturer in the midst of the tough competition.







Source: Nestle Market Share in Western

As the world's largest food producer, Nestlé faces stiff competition from close rival Unilever. Unilever has a
workforce of approximately 230,000 employees and operates in approximately 160 countries with
headquarters in London for the food sector and Rotterdam for home and personal care services. The
company is surpassing Nestlé in product quality and becoming the second company in the ready-to-eat meal
market in Western Europe with a market share of 8.6%, 0.3 points behind Nestle in the lead.

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Nestle tries to maintain its leadership position by applying local tastes to its products, thus creating low
production costs and high local customers. The company has more than 253,000 employees and operates in
more than 197 countries and therefore it is able to surpass its competitors in various fields. Nestlé has also
managed to establish a technology
platform, E-marketing, through which it
reduces supply costs and reaches a larger
customer base, unlike its competitors. In its
strategy to attract more customers, the
company focuses on establishing a positive
orientation about added nutritional value in
products. In addition, Nestlé focuses
heavily on branding and communication, Source: Nestle vs the competitor strategies
thus expanding the nutrition and health aspects of its brand communication. Gradually, Nestlé enhanced the
quality of its products with nutritional developments that gave it a competitive advantage. Science is another
tool that the company's strategy follows in that it plans to align science with the interests of consumers and
thereby, it can be aligned with globally advancing technology.
In general, Nestle deserves its leading position in the Food and Beverage industry, and European countries
especially Switzerland is a potential market for this group, despite the implicit opportunities and challenges.

C. CONCLUSION
To sum up, the study corporation illustrates an overview of the Nestle operations in European countries
especially Switzerland. It has offered comprehensive internal and external variables affecting Nestle's
development, including recommendations on the many circumstances that Nestle could encounter, through
the use of PESTEL, Porter's stakeholder framework, Opportunities and Threats of Nestle. The discussion part
also provides Nestle SA significant changes, forcasting and the competitors analysis so that Nestle can refer
to some strategic recommendations that they should pursue in the future.

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