Nestlé Strategic Report

Nestle Strategy Report

Table of Contents

Executive summary 4

External Environment Analysis 6

Economic 6

Social 7

Legal/Political 10

Technological 10

Environmental 10

Cultural 11

Competitor analysis 13

Threat of New Entrants 13

Threat of Substitute Goods 13

Bargaining Power of Suppliers 13

Bargaining Power of Customers 14

Competitive Rivalry within the Industry 14

Strategic capabilities and weaknesses 15

Strengths 15

Weaknesses 17

Recommendations/Conclusion 19

References 22

Appendices 24

Team organization 25

Executive summary

Dear Mr.Bulcke,

The ESPEME Consulting Group is proud to present to you the 2014 edition of our annual business report on Nestlé. In the first section of this report, we analyze Nestlé’s external environment, highlighting the major trends and the opportunities and threats resulting from these trends. The year 2014 is still market by anemic growth in mature markets, while growth in emerging economies has slowed down. However, as disposable incomes increase and middle classes develop, emerging markets are still an untapped source of growth for Nestlé. Socially, consumers are increasingly aware of their ability to influence their health through diets and lifestyles, thus modifying their habits and preferences. The effects of the last economic crisis have led to a greater private label penetration, a trend Nestlé must watch out for. Changes in regulation, leading to increased compliance costs, along with the water scarcity problem could impact Nestlé in the near to distant future.

Secondly, we focus on Nestlé’s strategic capabilities and the company’s ability to react to the opportunities and threats mentioned in the previous section. Unmatched brand portfolio, geographic presence (especially in emerging markets) and R&D allow Nestlé to react quickly to changes in the external environment. 2013 results, with successful integration of acquisitions, have shown that Nestlé has successfully commenced its transition into a...