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Internal and external factors analysis for Nestle Company

Discuss about the Strategic Management Analysis of NESTLE Company.

With the ramified economic changes, each and every organization is using strategic management analysis to run the business effectively.  It is observed that there are several internal and external factors which may affect the business and company need to analysis all these factors to formulate the effective strategic plans and procedure. In this report NESTLES Company has been analyzed to prepare the strategic planning decisions. In the starting of this report, internal factors analyses have been used to identify the strength, weakness, opportunity and threats. After that, external factors analysis have been used to identify buyers behavior, suppliers strengthen, threat of new substitutes and rivals offering in the market. In addition to this, diversification strategy of NESTLE company and its business units and sub-units have been analyzed. It has shown that company has been using the effective strategic plans and procedure to increase the overall brand image and turnover at large. The strategic planning of the NESTLE company focuses on the managing its business for long run and creating the core competency in the business. The competitive advantage of NESTLE company is based on its product differentiation strategy. It has been offering high quality products and services in the international market to attract more clients. Nonetheless, In Asian countries, Company has established strong brand image by offering different goods and services in FMCG sectors.

With the changes in economy, NESTLE company has gained momentum throughout the time on international level. It has increased its overall turnover and profitability throughout the time. It is considered that company has increased its overall market share by focusing on cost leadership and product differentiation market leadership program (Porter, and Kramer, 2019).

The NESTLE company is Swiss transnational food and drink company, headquarter in Vevey, Vaud, Switzerland. It is the largest Food Company in the world in terms of its revenue and other metrics such as profit, market share and return on capital employed. There are several subsidiaries of the NESTLE Company such as  Garoto, Nestlé Purina Pet Care Company which are accustomed to act as per the directions and instructions of the management of the NESTLE Company. The stock price of company is NESN (VTX) CHF 75.24 -0.14 (-0.19%) which shows that company has decreased its share price value since last one year. Nonetheless, as compared to other rivals, NESTLE Company has maintained stable business and shown 22% average growth since last five years (Shelley, 2015).

Diversification strategy of Nestle Company

Throughout the time, Nestle Company has incorporated and managed several business units throughout the time. It has observed that ideally, company has four main business units on which it has focused its strategic planning to increase its overall market share such as Bottle water, coffee, infant nutrition and pet care (Weissbrodt, 2017).

Nonetheless, since the beginning there are several business units which are undertaken by Nestle Company by using merger, acquisition and amalgamation. These joint ventures which are working as a company unit for its business are listed as

  • General mills as Cereal partner worldwide
  • The Coca Cola company as Beverage partner worldwide
  • Lactalis Nestle Produits Frais with Lactalis
  • Nestle Colgate-Palmolive with Colgate-Palmolive
  • Nestle Indofood Citarasa Indonesia with Indofood
  • Nestle Snow with Snow Brand Milk Products
  • Nestle Modelo with Grupo Modelo
  • Dairy partners America Brasil with Fonterra (Olawepo, and Ibojo, 2015).

All these units worldwide are directly related with the company in some venture for company’s business growth and to make its business diversified in terms of products too (Terpening, LI, and AKHTAR, 2015).

  This company has taken several mergers, acquisitions to expand its business through its strategic plans. The main competitive advantage which NESTLE Company has used to run its business on sustainable basis in long run is based on its product differentiation and cost leadership strategy. The  management of company has kept the price of its products and services by setting effective corporate leadership program by entering into the strategic alliance with other organization. These corporative strategic plans have helped company to increase its overall output and return on capital employed (Antonelli, and Ruini. 2015).

The competitive advantage could be defined as strategy which is hard to copy by other rivals in organization. It has been used by companies to implement effective business functioning to win over the market. The research and development department of company is also very strong which shows creative and innovative business functioning of the company which have been used internationally to win over the market. However, the NESTLE Company has expert’s employees working in its value chain activities which reflect that company has efficient work culture which assist company to reduce its cost of product selling in market. The strategic alliance of company with retail sellers is also strong which replicate the success of its products selling in sustainable business environment (Nisa, 2015). The global competitive strategies are associated mainly with the foreign direct investment in dairy and other food business. NESTLE Company has established the strong balance sales between low risk but low growth countries named Asian and Latin America (Anastasia, 2016). It is evaluated that when operating its business in developed market, NESTLE Company has been striving to grow and gain competitive advantage by increasing its production level to its economic scale. The main strategic business operational plan of NESTLE Company is to acquire the local companies who know more about the culture of the particular country and by collecting data from these companies, it customizes its most of the products and services as per the client’s needs and demand. It has been following decentralized business strategy to reduce the complexity of its business units and delegates its most of the operational decisions to local units which have high degree of autonomy concerning pricing, distribution and marketing (Buxel, Esenduran, and Griffin, 2015). NESTLE Company has set up strong seven different worldwide strategic business units which are indulged in strategic business development including acquisitions and market entry strategy. By using the effective competitive advantage, NESTLE Company has strongly dominated the Asian market with its attractive offers and quality products. There are several recent merger and acquisition of the company which shows that company has consistently followed product development and market expansion strategy to win over the rivals in international market (Nisa, 2015). It has consistently increased its market share in Latin America and established core competency in its product differentiation and cost leadership strategy. The core competency in both areas gives fierce competition to rivals in market (Giri, 2017). It has created highly competitive market environment which is ultimately in the good interest of the organization (Kok, et al. 2009). The competitive advantage of NESTLE Company is based on its strategic program and acquisition of various other organizations on international level. For instance, the research and development departments of the NESTLE Company is also too strong which shows development of innovative and creative products and services on international level. It is analyzed that the medical business center of company has resulted to good assistance to the people in Asian market. NESTLE Company has offered high quality medicines at very least price which have been adding value to the client’s satisfaction in health care industry (Carreno, and Dolle, 2017).

Sales, market share, turnover, and profitability of Nestle's subsidiaries

NESTLE Company has effective association with the L’Oreal Company. It has market over 500 brands and more than 2000 products in all sectors of the beauty business. The L’Oreal Company has established strong brand image on international level and the main source of competitive advantage for the company is based on its effective distributional channel and high quality beauty products. It is analyzed that the organic growth of L’Oreal Company is the main source for gaining the high competitive position on its rivals. With the ramified changes in economy, NESTLE has aimed to focus on aiming the four key areas where it sees the potential for the growth of the business i.e. Bottle water, coffee, Infant nutrition and pet care. It has been observed that company has used merger and amalgamation strategic planning to increase its overall market share and win over the market (Corbaci, et al. 2014).

There are several corporate revenue centers which have been played important role in the business success and increased revenue of company at large.  There are main following business units of company such as Nestle Snow with Snow Brand Milk Products, Nestle Modelo with Grupo Model; Dairy partners America Brasil with Fonterra and L’Oreal Company which have contributed at least 15% of the overall revenue of company (Payaud, 2014).

The total revenue of the L’Oreal Company is $29.4B which shows that the total revenue of company has increased throughout the time which shows positive indicator for the business development of organization.  L’Oreal Company is the best-selling unit of Nestle Company which reflects the positive indicator for the overall revenue. It has been observed that as compared to other industries and business units of Nestle, L’Oreal Company has shown drastic growth of 12% since last two year. It is remarkable achievement for the company (Jannat, 2015).

The total revenue of the Nestle Snow with Snow Brand Milk Products is approximate $25.4B which is 9% of the overall sales of the Nestle Company. This Company has increased its overall revenue and growth since last five year which shows the good potential for the development of the business unit. If Nestle wants to expand its business then it should focus on product development of its business unit of Nestle Snow with Snow Brand Milk Products. It will not only increase the overall profitability of the business but also increase the overall return on capital employed of company (Gassmann, Frankenberger, and Csik, 2015).

Key areas for Nestle's potential growth

Nestle Modelo with Grupo Modelo is another business units which shows the drastic amount of growth for the organization. It is analyzed that from this independent business units, Nestle had 10% of its total revenue. The Nestle Modelo with Grupo Modelo has shown growth rate of 18% as compared to last five year data in Asian market countries. If Nestle follows product development strategy in Asian Countries for its Nestle Modelo with Grupo Modelo then it could easily increase its overall market share throughout the time. It reflects the positive indicator for the effective business implementation (Gassmann, Frankenberger and Sauer, 2016).

After analyzing these main business units of Nestle Company, it could be inferred that company has increased its overall revenue by following proper market strategies and corporate strategic plans. It is observed that if company wants to increase its overall market share then it will first has to focus on using the product development strategy and market development strategy to expand its business more in other international market (Bradley, et al. 2014).

There are several lucrative business areas and development programs which could be undertaken by the Nestle Company to grow its business effectively on international level. It is analyzed that 150 year old Nestle has an impressive growth during its life span. Nestle was founded in Switzerland by Farine Lactee Henry Nestle. In 20th century the company made different merges acquiring different companies to expand the business. In 1905 nestle first merge the Anglo-Swiss Milk Company, the giant milk company in America (Khan, and Hassan, 2014).

The Vevey, Switzerland headquartered Nestle has employed around 328,000 people in 2016, worldwide. This continuous growth made total revenue of 91.16 billion U.S. dollars in 2016. In 21st century although company is enhancing the quality of life and also contributing for a healthier future, aims to deliver a sustainable and  leading the financial performance in the industry and earn the trust of its consumers. In this way company is diversifying itself for the better performance to achieve its goals and satisfy their consumers. In the beginning company was started as a milk-food company. In 1947, the first ever merger for diversification in the industry nestle made by merging the holding company of “Maggi” to form Nestle Alimentana S. A. Since 1996, company has made many acquisitions, which includes San Pellegrino in 1997, Spillers Pet foods in 1998 and Ralston Purina in 2002. In North America, company has made two major acquisitions, both in June 2002, of US Ice Cream Business into Dreyer’s and Chef America with an acquisition of 206 billion dollar. After this in 2005, company has acquired the the Greek company Delta Ice Cream for a total amount of €240 million and in 2006 Nestle took full ownership of Dreyer’s making it the world’s largest Ice Cream maker. At this time company holds 17.5% market share in Ice Cream market (Gassmann, Frankenberger, and Sauer, 2016).  At this time company has started its diversification process and in July 2007, company has acquired the Medical Nutrition division of Novartis Pharmaceutical for 2.5 billion US dollar. In the next month, August 2007, company return to its root product acquisition by acquiring “Gerber” US baby food manufacturer (Harmon, 2014).

In the recent years after 2012, company had made some other acquisitions to widen its consumer range. It acquired Vitaflo which is a clinical nutritional product manufacturer, CM&D Pharma Ltd. which has specialization in manufacturing the development products, for chronic conditioned patients, like kidney patients. Another recent acquisition includes Jenny Craig the weight loss programme for a worth of 600 million US dollar. After some time company has sold Jenny Craig to its North Castle partners in 2013. In the expansion of company in the field of medical nutrition products company has acquired one more unit, for the Nestle Health Science, as Pamlab, that manufactures L-methylfolate based food for depression, memory loss and diabetes patients. Next year in 2014, company has sold its Power Bar Sports nutrition business to the Post Holding Inc. this was the year in which company has decided to diversify its business in research industry too and announced that the company is opening 10 research centres worldwide for Skin Care. For this company has spent 350 million dollar in dermatology research and development programme. In this field the first one Nestle “Skin Health Investigation, Education and Longevity Development (SHIELD)” centres opened in mid of 2015, in New York, followed by Sao Paulo and Hong kong, and then in Asia, North America, Europe. This diversification was launched in partnership with Global Coalition on Aging (GCOA), an association that includes giant companies like Intel and Bank of America (Bauer, 2014).

This research programme led the company to reduce harmful contents like sugar in their products like Kit Kat, Yorkie, and Aero chocolate bars. In this way, in 2017, company announced about lowering the sugar content in these products by 10%. This announcement was followed by another announcement that was concerned with the reduction in sugar content of company’s breakfast cereals too in UK.

With the same thinking some diversification of company in terms of business as well as the product range for a wide range of consumers Nestle has started some joint ventures too with some FMCGs. These joint ventures which are working as a company unit for its business are listed as (Tahsin, 2016).

  • General mills as Cereal partner worldwide
  • The Coca Cola company as Beverage partner worldwide
  • Lactalis Nestle Produits Frais with Lactalis
  • Nestle Colgate-Palmolive with Colgate-Palmolive
  • Nestle Indofood Citarasa Indonesia with Indofood
  • Nestle Snow with Snow Brand Milk Products
  • Nestle Modelo with Grupo Modelo
  • Dairy partners America Brasil with Fonterra (Lacoste, 2016).

All these units worldwide are directly related with the company in some venture for company’s business growth and to make its business diversified in terms of products too (Areal, McIntosh, and Sheppy, 2016).

In terms of products and brands company has diversity in products. This diversity in products of the company is the only reason that company has made a 70% contribution for group’s total sale from only six worldwide brands, Nestle, Nescafe, Nestea, Maggi, Buitoni and Friskies. Among these brands Nestle itself contribute 40% of the above 70% (Rezaeegiglo, et al. 2014).

The research programme announced in 2014 is successful as in this programme Nestle has improved the nutrition profile of more than 6000 products (European Food Safety Authority (EFSA), 2017).

The Nestle healthy kids Global Programme, which aims to improve the health, wellness and nutrition of children over around the world, has reached more than 10 million children till 2010.

In this process company is committed to its vision for protecting the natural environment through their efforts of reducing water usage, minimizing the landfill waste and meeting LEED and other standards to minimize the energy usage (Nisa2016).

This diversification has made the company to operate around the world in maximum countries. This list of nations where nestle has established their individual units and started joint ventures with other brands has increased and maximum countries (Aversa, and Haefliger, 2016).

Pestle analysis plays an empirical role in each and every company to analyze and evaluate the conditions of the market as well as competitors. This analysis gives the hints to Nestle to improve and enhance the operations and activities on right time and right place. Along with this, this analysis can give more dynamic opportunities to the company for future business growth and development. Pestle analysis has been discussed below. After analyzing its different business units, it could be inferred that Nestle Company has main following business units in FMCG sectors, Medical sector and Health care research program center (Farache, Tetchner, and Kollat, 2018).

Political factors: Nestle operates and manages its business operations in more than 194 countries each with its regulatory environment that could have direct impact of the business operations and activities. The rules and legislation set by the government are different in different countries regions (Sauer, 2018). It shall be noted that the company should focus on these political factors such as import export excise duties, taxation, rules and regulations. The government permission is required to enter in the target segment and also to launch hygiene products permitted by the regulated bodies. Apart from this, Nestle should consider all the market risks and challenges that affect the sustainability of the firm. The company must follow the changing global regulations which are yet to accept by the firm. It is noted that the company promotes the government health policies by maintaining the quality standards, legislations and rules. The business units working in its FMCG sector in Asian countries have shown drastic growth. The political pressure of Asian countries on the multinational is very less. They promote other organizations to set up their business in their countries with a view to increase their foreign direct investment and increased GDP rate. There are several business units such as Kit-Kat, Nescafe and Nestea and other joint ventures with the organization that have given high employment to Asian countries which not only increase their employment rate but also result to positive result to their Gross domestic rate (Mi?ieta,  Bi?asová, and Marschall, 2017).

  • Economic factors: One of the significant economic issues for Nestle is foreign exchange swings. Foreign exchange swings has direct impact on the group revenue and profit. Along with this, different countries have different economy and they are differing from each other. Along with this, changing inflation rate, income level and economic growth rates also influence the buying behavior of the consumers in the global market. It shall be noticed that Nestle has to set the different economic policies and standards deal with different market segments. The company should make an analysis report on regular basis to get the enough information and knowledge of the inflation rates and income level of people. In today’s era, the company is contributing in promoting and improving the economic growth and development of farmers by introducing the high quality of the products and services. In this way, Nestle has been able to satisfy the consumers in the global market. The main business units of the Nestle is General mills as Cereal partner worldwide The Coca Cola company as Beverage partner worldwide, Lactalis Nestle Produits Frais with Lactalis, Nestle Colgate-Palmolive with Colgate-Palmolive, Nestle Indofood Citarasa Indonesia with Indofood, Nestle Snow with Snow Brand Milk Products, Nestle Modelo with Grupo Modelo and Dairy partners America Brasil with Fonterra which have been creating high profit since very long time. It is observed that these all units are consistently increasing their overall revenue in Asian and Latin America. It has been considered that the economic factor of Asian country is highly growing. The growth rate of China, India, and Africa and Brazil is constantly increased due to high amount of foreign direct investment The FDI policies and market hurdles to multinational companies on international level is comparatively low which reflects the positive indicator for the international organization to set up their business in these countries. The Economic value and purchasing power of the Asian people is also strong which divulges that they would be more inclined towards buying goods and services. However, these business units need to set up proper equilibrium in its pricing policies and product quality.

Social factors: The custom, thoughts, values and beliefs of the customers may affect the business activities and operations. It is stated that Nestle keeps in mind the social perspective well to attract and retain more consumers. After the various studied, it has been analyzed that the company always understand the concept that customers changing attitude and belief has immense significance. Apart from this, the firm has been able to make a good reputation of measuring and understating the consumer behavior. The company is one of the significant brands in the world; however the product has been introduced locally in order to maintain the quality. The unique core values and principles of the company help in boosting and developing the trust and loyalty among the customers globally.  The core values of its all the business units named as  Coca Cola company as Beverage partner worldwide, Lactalis Nestle Produits Frais with Lactalis, Nestle Colgate-Palmolive with Colgate-Palmolive, Nestle Indofood Citarasa Indonesia with Indofood, Nestle Snow with Snow Brand Milk Products, Nestle Modelo with Grupo Modelo and Dairy partners America Brasil have been customized its products and services as per the client’s needs and demand on international level. For instance, in Medical business sector, it has kept all of its medicines MG level low with view to increase its acceptable level high in Asian countries. Nonetheless, the social values have also been considered by all of these units while customizing the products and services in market.

Technological factors: Latest technologies provide many opportunities for the development and expansion of innovative products and enhancement of existing ones. Innovative techniques of marketing include e-commerce and internet is significant to monitor in the competitive world. Hence, the company uses technology and processes in various business operations like to maintain the databases with the support of software. The widespread use of social media has narrowed the gap between the company and consumers as well. Nestle also is using the innovative and latest technology for the manufacturing of various products and services and on the other hand, they are fulfilling the global standards and norms by installing the modern plant. With the ramified changes in economy and technologies advancement, Nestle Company needs to install new system process and method functioning to increase its overall return on capital employed. It has several business units in which following technologies changes needs to be made by company

  • The Coca Cola Company as Beverage partner worldwide- Company would install advance system while serving to clients in different countries. Automated drink filling machines.
  • Lactalis Nestle Product’s Frais with Lactalia- Use of platters to serve the clients with their attractive offers.
  • Nestle Colgate-Palmolive with Colgate-Palmolive- Advancing the work system to improve the work functions for the better evaluation of the business process.
  • Nestle Indofood Citarasa Indonesia with Indofood- installation of the cyber computing system to implement proper communication plan of the business.
  • Nestle Snow with Snow Brand Milk Products, Nestle Modelo with Grupo Modelo and Dairy partners America Brasil- Implementing strong enterprises resources planning in the value chain activities of the organization (Joyce, and Paquin, 2016).

Legal factors- There are several rules and regulations which need to be complied by all the business units of Nestle Company. It is observed that the Asian countries and Latin America is the main focus area in which Nestle has increased its overall market share by following cost leaderships market diversification strategy. It is analyzed that the legal factors of Asian market is liberal as compared To Latin America. The legal factor of company would negatively and positively impact the business functioning of organization. It is analyzed that Nestle Colgate-Palmolive with Colgate-Palmolive has faced several legal suits due to its non-compliance with the applicable rules and regulation. It has divulged that if company establishes the proper compliance program then it could easily avoid the possible costing and legal penalties. The main legal issues which have been faced by Nestle are related to setting up new business venture in different countries (Lee, 2016).  It has been observed that when Nestle wants to tap the new economy with its existing product then it needs to set up proper strategic alliance with other organization. It has been observed that Nestle Colgate-Palmolive with Colgate-Palmolive was started up in Asian countries by setting up joint ventures with other local companies. It reflects that company used strategic alliance program to set up new business (Daley, Coyle, and Dwyer, 2016).

Strength

The Coca Cola company as Beverage partner worldwide of the Nestle has shown 12% growth in its overall revenue collected from the Asian and Latin America (Jia, Gosling, and Witzel, 2017).

It is observed that Nestle company has strong brand image on international level which reflects high increment in its return on capital employed throughout the time. It is analysed that Nestle Snow with Snow Brand Milk Products, Nestle Modelo with Grupo Modelo and Dairy partners America Brasil are the key business units which shows that company has positive future outlooks in term of revenue, profit and return on capital employed (Peñalver, 2017).

Weakness

With the globalised business functioning of Nestle company, the management needs to comply with several domestic and international rules and regulation (Dudley, Hockings, and Verschuuren, 2015).

The legal compliance and listing requirement in the Asian countries is very tough which may result to high penalties to company if it fails to comply. The Nestle Snow with Snow Brand Milk Products, Nestle Modelo with Grupo Modelo and Dairy partners America Brasil and other business units has to comly with the listing requirements as a consolidated company if it wants to run its business in these countries. It is analysed that setting up of corporate governance for these business units may be costly process for Nestle which will eventually increase the overall costing of its product offering in international market (Galalae,. and George, 2017).

Opportunity

The main opportunity for Nestle is based on the increased market share of the FMCG sectors and Medical business sector on international level. The increased market growth rate of these sectors shows the positive increment in the business success of the Nestle on the big level. It is evaluated that Nestle Colgate-Palmolive with Colgate-Palmolive has shown 12% increment in its overall business outcomes which is positive indicator for the Nestle. The FMCG sectors show at least 25% market growth rate which may be positive indicator for company to expand its business through the product development and market development strategy (Bee, et al., 2015).

Threats

The main threat for the Nestle company is increased foreign exchange risk exposure. This risk is defined as volatility in the currency exchange rate which will change after the time when the company in actual entered into the transactions (Panigrahi, and Chaudhury, 2015). If Nestle company wants to overcome these risks then it will have to use forward contract and future contract. Nonetheless, the threat of new entrants in the FMCG business unit will be high which shows the high threat. On the other hand, Medica business units will also face high threat due to its increased growth rate in Asian countries and Latin America (Tabbara, 2016).

In 2017 company has announced that it has taken one more step for the implementation of company’s new comprehensive value creation model. This model determines that the capital spending of the company in future will be focused on advancing of the high growth food and beverages like pet care, coffee, bottle water and infant nutrition. The expansion plan of the company also targets to expand its highly growing geographic market. These, upcoming changes has followed a comprehensive review of the company’s capital structure and its priorities by the  management and board of directors. The financial strategy of the company aims to strike the right balance between competitive shareholder returns, flexibility of the business for external growth, growth of per share in terms of earning and easy access to the financial market. According to the future strategy plan company has decide to pursue its growth opportunities in health care sector for its consumers. This strategy of expanding the business in health care sector fits in company’s major focus on high growth nutrition, health and wellness of the consumers. All these strategies are prioritizing the external growth opportunities for the business which fits in the targeted geographies and categories, delivering attractive returns and building the company’s leading position in the fast growing categories of food and beverages. Company is also planning to explore its strategic options in US confectionery business. In this context company’s decision is consistent with the overall approach of company and plans to adjust the present portfolio for its new strategies and objectives for business growth (Tabbara, 2016).

In the margin improvement programme, company is planning to continue its access to the opportunities through the targeted efficiency programmes, which determine its performance for long term growth. The review of all this these strategies results in the approval of a share buyback programme of around 20 billion Swiss francs by the board of directors. Company is expecting this programme to be completed by the end of 2020. This programme is uncertain in terms of volume of monthly buyback of share as it completely depends on the market conditions during its expected time span. But at the same time company is targeting to backload this programme in 2019 and 2020 making the company to grab the opportunities for value-creating acquisitions. On the basis financial analysis, based on these future projecting strategies, company is expecting a net debt to EBITDS ratio of Circa 1.5 by the end of 2020 (Tabbara, 2016).

In the last few years company business has made its path in different health wellness and nutrition advancement ventures. Company’s main motive is to provide high growth nutrition, health and wellness to the children around the world. In this strategies company has started some new ventures related to health care sector such as opening health care research centres worldwide for better health care facilities, and advancing the nutrition of children. Bothe these strategies have shown a significant growth for the company. And since both these strategies fit into company’s main motive company should continue in such opportunities. In the current scenario these ventures have shown 8% growth in the overall business of the company and this growth can be increased up to 15-20% which will be more than sufficient to get the maximum advantage for the competitive business. The research programme of the company has a high potential for growth. Till now company has started its research programme for skin health care research but in future it can expand its range for different health care sectors. Company can expand its research programme in cardiology research as the most of the people are suffering from heart problems. In the last few years the death rate of heart patients has increased dramatically. This is something serious problem before the world and company should invest for its research programme for the same problem. This investment would be beneficial for business purpose as well as the company’s market value creation programme (Tabbara, 2016). Company can also expand its boundaries in nutrition with some innovating ventures as the company has an advantage of its worldwide presence. The margin improvement programme of the company can also be the key element for attracting new customers for the company. This programme will be significant as the company market is worldwide and company has established its roots in most of the countries and all of these are successful ventures. Company has three main ambitions for 2030, that are to help 50 million children to live a healthier life, to connect over 30 million livelihoods in different communities to connect with the company’s business activities, and for planet the company is concerned to zero environmental impact through their operations. These ambitions are of noble cause and effective for business purpose too, and interconnected with company’s research programme somehow directly or indirectly. This makes the management to think about their research programme expansion. As the company has made its roots deep in nutrition sector and now it is moving in research programmes too it should go for medical products too like new medicines for death causing diseases. And it is high time to grow in pharmacy industry as the world is facing different problems in medical sector as some new disease are coming to the world due to the environmental changes.

Conclusion

The competitive advantage of NESTLE company is based on its product differentiation strategy. It has been offering high quality products and services in the international market to attract more clients. Nonetheless, In Asian countries, Company has established strong brand image by offering different goods and services in FMCG sectors. This dramatic change in the world environment has introduced such diseases and as the company is concerned about environment too it should expand its boundaries in pharmacy. Investment in pharmacy can give a significant business to the company as the pharmacy sector is having a huge growth due to these environment changes. In this vision company can make its business as well as the social value in the market with its concerned noble practices for the humanity and environment. It is shown by most of the companies around the world that the social value of a company can enhance its market value significantly. This point makes all the recommendations significant and justifies all of them in terms of business and value creation of the company.

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