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Business, Coursework

Nestle Strategic Plan

Nestle Strategic Plan

In 2020, Nestle sought to create value through acquisition/partnerships, innovation, and evolution (Sharp et al., n.d). To deliver on its current mission, the company intends to offer nutritional food items, consider and meet the consumers’ needs, introduce food innovations, have a plant-based product line, and increase accessibility to these products (Nestle, 2021). The main goals that are connected to value creation include;

  • Increasing growth by being relevant to the market

To increase its growth, Nestle intends to identify regions and categories for investment. These categories include nutrition, water, pet, coffee, and nutritional health. In 2019, the categories represented 59 percent of the company’s sales and grew by 4.1 percent. The emerging markets are also earmarked for investment as they represented 42 percent of all sales and posted a 4.7% growth (Nestle, 2021). The company intends to explore other areas for growth, including e-business, premium offerings, and direct-to-consumer sales. Most importantly, the company intends to fix its underperforming segment and proper management of its portfolio.

  • Ensure that the organization’s operational efficiency improves by increasing its profit margin to 17.5% or 18.5% from 16%.

Reduction of costs is one of the main strategies that is expected to lead to higher margins. The main areas that are earmarked for cost reduction include manufacturing, administration, and procurement. Closure or sale of production facilities in 2019 led to a reduction of overheads by at least 5.5 percent (Nestle, 2021).

  • Improve allocation of resources as well as capital using clear priorities and discipline.

Better allocation of resources requires investment in Research and Development, supporting the brand, and organic growth. The segments that generate the highest profits top the list of investments and resource allocation. Disciplined acquisitions are also important, as they should fit with the organization’s culture. Increasing the capital returns to the main shareholders has been used to ensure that shareholders receive more dividends every year. Nestle intends to revert CHF 20 billion more between 2020 and 2022 (Nestle, 2021). The three goals are expected to maximize the shareholder’s long-term value through the creation of shared value.

Nestle has numerous competitors, including Unilever, Hershey, Mondelez International, Keurig Dr Pepper, Mars, PepsiCo, and Kraft Heinz. These companies are public and private. Among these, Unilever employs at least 150,000 employees. Its headquarters are in London. The company deals with personal care products, food, and other consumer goods. Companies such as Mondelez and Hershey deal with confectionery products as well as food and beverages (Nestle, 2021).

In comparison to its top ten rivals, Nestle has outperformed them significantly. The company’s annual revenue is $90.1 billion. The average revenue for the top ten competitors is $24.8 billion. In 2020, the company’s revenue grew by 3.5 percent. During the first quarter, the company made $21.7 billion in revenue. In the second quarter, it made $21.4 billion, and $22.5 billion during the third quarter. Its acquisitions in 2020 include Mindful Chef Limited and Freshly Inc. Mindful Chef, a company that distributes recipes to clients who have subscribed and provides frozen meals online. Freshly also operates online, delivering meal kits to clients. It has also invested in Terracycle, which facilitates proper and efficient waste management. In the same year, Nestle invested in Prometheus Biosciences, a company that conducts research on gastroenterology as well as bowel conditions (Owler Inc., 2021). Referring back to its strategy for 2020, the company’s investments, acquisitions, and resource allocation decisions may have been responsible for the revenue increment.

References

Nestle. (2021). Nestle competitors. Retrieved from Nestle: https://craft.co/nestle/competitors

Nestle. (2021). Strategy. Retrieved from Nestle: https://www.nestle.com/aboutus/strategy

Owler Inc. (2021). Nestle. Retrieved from https://www.owler.com/company/nestle

Sharp, C., Bergeron, K., Kongehl, G., & Eras, D. (n.d). Nestlé Sa Nescafe Strategic Plan 2020. Retrieved from https://mbacasecomp.com/wp-content/uploads/2016/01/HEC-Semi-FINAL.pdf

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Question 

Strategic Plan (Portfolio Assignment)

Complete the Task Assignment: Strategic Plan (Portfolio Assignment)

Nestle Strategic Plan

Nestle Strategic Plan

Locate the most recent Strategic plan for the organization. (Nestle)

  1. List the objectives for the major goals that the company is pursuing. List at least 3 objective goals.
  2. List details of the major goals and the projected deadlines.
  3. Describe the Competition
  4. How well has the firm performed recently compared to rivals? Has it outperformed rivals or underperformed them? Why?

Make sure your essay includes a proper introduction and purpose statement. When using the APA format, do not include an abstract. This assignment must be a minimum of two full pages and no more than three. You must include a title page and references. Upload below.