Strategies lie at the heart of an organization, and no organization could be in the sake of economic prosperity without utilizing and molding their operational and non operational strategies for the sake of organizational productivity in total. When it comes to organizational productivity, there are motley things which have to be in regular consideration for its productive both from financial and non financial angles in total (Kourdi Jeremy 2010, p.23).
It is more than important for the entities to utilize and mold their strategies in a perfect and well organized manner. It is an obvious thing that organizations always made to increase their surplus from different slants and angles and in accordance to accomplish the same, entities have to consider numerous things in total. There are number of ways in which an organization would have been regarded accordingly and effectively as well and among them, the name of merger and acquisition is one of them, which has its own importance and recognition from different viewpoints.
Every company has some sort of strategies which will effect over its business and operational strategies in total. The main theme of this paper is to analyze the effectiveness of a company’s market share in particular. Actually it is required to make slides of a chosen company relating to its current strategic and financial position in total (Fernando, A.C. 2011, p. 46). The company which has been chosen for the same analysis is Nestle. In the next section, a small description relating to the company would be mentioned followed by strategic analysis and other analytical framework.
Nestle, which is basically a Swiss multinational food and Beverage Company with its headquartering located in Vevey, Switzerland. Nestle is known as the world’s largest company in terms of size and revenue. The product portfolio of Nestle is subjected on bottled water, baby food, breakfast cereals, dairy products, confectionary and other items. There are around 29 brands, which are making sales above than US$ 1.1 billion (Klöpping, Laura 2013, p. 11-16).
The company has more than 450 factories and has its currently recognition in more than 86 countries of the world. Nestle is one of the main shareholders of L’Oreal, which is the largest cosmetic company of the world. It was basically formed from the merger of Anglo Swiss Milk Company and Farine Lactee Henry Nestle (Klöpping, Laura 2013, p. 11-16). The company is as old as the 1st World War and it increased tremendously well after the initiation of the First World War. The company has its effective and primary listing over the Six Swiss Exchanges and a regular and major constitute of Swiss Market Index (SMI) (Hoy, Francis 2011, p,267). The company has a current market capitalization of $ 233 billion which ranked at 9th highest. The company earned net revenue of CHF 92.18 billion in the fiscal year (FY) 2012 with operating income amounting to US$ 14.44 billion in the same year. The company currently has 339,000 employees with new profit recognition of US$ 10.61 billion in the year 2012 which was extremely high as compared to other organizations operating in the same line of business (Nieuwenhuizen, Cecile 2007, p. 96).
Corporate Social Responsibility
Nestle is a big company which has its recognition in number of markets of the world. The company has effective tradition as far as generating net income is concerned. The company complies effectively with the Corporate Social Responsibility (CSR). The ethical stance of the company is perfect and it would remain in the same jurisdiction as far as the company remains competitive.
Market Share Analysis
The market size of the food and confectionary industry is extremely big and according to an estimation, it is comprises on trillions of dollars, and there are number of companies are working under its ambit (Board, NPCS 2013, p.114). Some of the major companies operating in this particular region, other than Nestle are Kraft, Cadbury, Pepsi Co and other and all of these companies have an astounding market share in total.
The global market share analysis could be found with the mentioned below analysis.
There are three companies, whose brands are recognizing in all over the world, and among them, Nestle comes at 3rd position (Sekhar, Satya 2010, p. 59). Stability is there in the current global brands shares ownership of the company and Nestle is having a great time in total.
According to the analysis, it is found that media advertising and research and development (R&D) plays their astounding role as far as increasing the financial belongings of the company are concerned.
It could be found from the above mentioned graph, that the prepared food advertisers share of voice pertains specifically to Nestle based Professional and amounting to 15% of the total market.
Internal and External Analysis of the Company
- The company has unmatched product and brand of portfolio
- High research & Development (R&D) capabilities
- Effective Distribution Channel and the presence of geographic
- High Competency in the essence of merger and acquisition stance
- Current brand valued is more than US$ 7 billion (Analoui, Farhad 2011, p. 129)
- The company has very low ability to provide consistent based quality in their foods and some of the major products as compared to other rival companies
- The essence of Corporate Social Responsibility (CSR) along with its adherence is extremely weak with the company
- The demand of tasteful and healthier products are increasing day by day in all over the world with perfection
- The company acquired the specialization in the producing of well effective and well-being products in total
- Establishing of new joint ventures and strategic alliances are increasing
- The contamination of Foods is higher
- The trend towards healthy eating is increasing which may increase the competition level
- Growth of the private labels
- The current increment in the raw food prices which will effect over the bottom line
Pestle Analysis of NESTLE
Political Factors with Nestle
Nestle is basically a Swiss brand, hence it is extremely important for the company to comply with the Swiss standards, no matter where they are operating. Swiss Legislation and Swiss Companies act are very strict and the company has to comply with the same. The Swiss based act refers to a list of agreements with the OMX Nordic Stock Exchanges
Economical Factors with Nestle
Swiss is one of the largest companies of the world. The company earned net revenue of CHF 92.18 billion in the year 2010 with net income amounting to CHF 48 million. Currently, the company holds a substantial and comprehensive market shares in the market of Swiss along with the market share in the cloth retailing market of the UK. Furthermore, the company is pursuing expansion based strategies which is implying that the market share of the company is expecting to grow in the near future as well.
Social Factors Analysis of Nestle
Since Nestle pursue consumer items at the best price strategy and certain demographic change that enters in the management based decision making. This particular thing helps the company to come up with new product strategies which are consistent with the demographic change of the company. The company also relates effectively with the same society from where it is operating initially and this particular provision has been essential in the quality provisions.
Technological Factors with Nestle
Nestle is one of those companies which are making extensive use of two different technologies, which particularly are printing based technology and media based technology. The technology of Nestle is dynamic and perfect hence new machines are always needed by this particular industry to make extensive coloring patterns. Moreover, with this particular development in the media based technology, the chosen company (Nestle) is able to advertise via the website and other media channels merely to attract different and many customers.
Environmental Factors with Nestle
Environmentally, Nestle is a good company and it is operating in a well function and effective environment which is again a positive sign for the company in total and it will remain like the same while operating in other countries as well
Legal Factors with Nestle
Legally, Swiss is a strict country and the legal based implementations are extremely high on the company and they have to comply with the rules and regulations of the Swiss government to operate with perfection and efficacy.
Financial Competitiveness of Nestle PVT Ltd
- Sales of the company increased heavily CHF 92.2 billion, up by approx CHF 8.6 billion, +10.2%
- organic growth of 5.9% envisaged while 3.1% real internal growth
- The Trading operating profit of the company up by 11.8% to CHF 14.0 billion
- Earnings per share of the company increased by 12.2% to a level of CHF 3.33
- Proposed dividend of Nestle increased to CHF 2.05 per share
- Operating cash flow of the chosen company increased CHF 5.6 billion to CHF 15.8 billion
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(Klöpping, Laura 2013, p. 11-16)
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