A strategy is a plan of action for the future aimed at planning for coming events to avoid unexpected events that may affect the business (Tracy, 83). Nestle is a leading global food company operating in over 130 countries and offering a wide range of commodities to its customers. It adopted a strategy to become a leader in nutrition, health, and wellness through adjustment of its products into healthier options. This strategy would involve the elimination of certain ingredients such as sugar, salt, and fats while adding other ingredients such as whole grains. This would shift the image of the company in a positive way by making its products reliable as health options.
The NHW had the aim of differentiating the company’s products from those available in the market. Rising level of competition, therefore, inspired the creation and adoption of this strategy that would set Nestle products apart. The company would, therefore, tap into a market segment with less competition hence guarantee a wider market for its products. Competitive advantage was, therefore, a motivating factor for this strategy intending to distinguish its products as nutritional and healthy. Maximization of profits is another objective of this strategy where it intends to acquire a wider market share and create customer loyalty. Through maximizing sales and minimizing costs, the company would realize a large profit margin and realize growth in the long-term (Tracy, 135). This would then translate into maximization of value for the company’s shareholders to reward their investment into the strategy implementation.
External analysis reveals a rapidly changing market that requires the company to adopt a different approach to keep up with the changes. The customer is the most important stakeholder in any business undertaking since he dictates what the company produces, among other operation decisions (Baye, 108). Since the business operates with an objective of making profits, it has to adjust its decisions to the needs of the consumer. The market in this case realized drastic changes since the tastes and preferences of consumers concerning food shifted. They became very cautious about their health status and food choices due to the increasing awareness of lifestyle diseases. This dictated their choice of food by shifting their focus to healthy foods and abandoning unhealthy options that threaten their health. The company’s adoption of a health strategy would attract more customers and ensure customer satisfaction. It would bridge the gap between customers’ needs and products available in the market.
Internally, the company undertook various operations meant to support the implementation of the strategy. The firm’s operations must align with set strategies in order to support its implementation and ensure every department is working towards a similar goal (Kourdi, 91). Nestle created a unit to oversee coordination of activities across its companies and ensure commitment towards the NHW strategy. The company had acquired various companies over the years to enhance its strategy. Management of the companies required close monitoring so that they all worked towards a common goal. The unit, therefore, came to fill this gap and ensure the flow of information internally and to the customers. Communication between the company and consumers is important in implementing a strategy focused on fulfilling consumers’ needs. Research and development is another activity supporting the strategy information by obtaining relevant information concerning the market needs and scientific methods of implementing the strategy. This would reduce costs of manufacturing the new brand of products and improving the packaging to complete the product. Adopting the most efficient methods of producing these quality products would lead to the success of the strategy by attracting more buyers, increasing profit margin, and maximizing value.
Baye, Michael. Managerial Economics & Business Strategy. Boston: Mcgraw-Hill. 2000. Print.
Tracy, Brian. Business Strategy. New York: American Management Association. 2015. Print.
Kourdi, Jeremy. Business Strategy: A Guide To Effective Decision Making. London: Oxford Publishers.