Nestle: Strategic Management and Swot Analysis

Topics: Strategic management, Food industry, Food Pages: 9 (1874 words) Published: September 26, 2014
1. Introduction
This report is going to analyze the company of Nestlé to into the Singapore market. It is going to introduce company and country background, after that it will analyze the company of Nestlé and Singapore market by using SWOT analysis, PEST analysis and Porter’s 5 Forces. Finally, it will have recommendation and conclusion to follow it.

2. Company background
Henri Nestlé founded Nestlé in 1866 in Switzerland. It is the largest food company in the world. Some of products are produced from Nestlé include baby food, coffee, dairy products, ice cream, pet food, etc. Nowadays, Nestlé has more than 400 factories around world and its operation is also in 194 countries. Nestlé has been the world’s most profitable corporation.

3. Country Background
Singapore is the 14th largest merchandise exporter in the world and it has the world’s largest foreign exchange reserves. Nestlé is going to enter the Singapore market because Singapore is a developed country and it has an economic success. Multi-cultural is more important factor for makes Singapore business to be success in that Singapore is easier to enter those countries market. In addition, Singapore has the best business environment in Asia. It is the one of the easiest place to do business in the world.

4. SWOT analysis
Definition: SWOT analysis consists of four parts of strengths, weaknesses, opportunities and threats analysis. It is to identify and analyze the framework can have an impact on a project, product, place or person to survive internal and external factors (Rouse, 2013).

SWOT analysis is an important analysis model in the business, this is because it provides some of internal and external factors that hope people to evaluate market value in the future. It is a simple ways to think about key objectives and specific ideas. Besides, SWOT analysis reveals the business is healthy or sick.

From the below table 1 that shows SWOT analysis of “Nestlé”, after that there is going to explain how each of these factors impact on Nestlé.

Table 1: SWOT analysis of “Nestlé”

Strengths – The biggest brand and valued at $7 billion. Nestlé has become the most famous food company in the world. It has a strong customers trust and financial background. The brand can bring great benefits for Nestlé. It can protect the interests of operators and it can help consumers identify and select merchandise. Nestlé brand 's reputation is the best marketing tool.
Weakness – Food quality. The major concern for food companies is the food safety and quality issues. Nestle milk powder was broke iodine poisoning cases, the protein content is substandard, traces of melamine and contains toxic heavy metals. Although some toxic components is very low, but it is harmful for the baby and people. The food company of Nestlé can occupy the market situation that basically depends on the quality of the product.
Opportunities – People demand for healthy food. People gradually realized the importance of health, and they also have a growing interest for health. Health care products market has continued to expand in the hot market, but quality of food is uneven. If Nestlé can seize the trendy of health products and to satisfy the people 's health requirements for food, this could be a great benefit for them.

Threats – Rising raw material costs. The food company of Nestlé will certainly increase their cost pressures. Meanwhile that impacts the Nestlé Company's product sales and the price positioning. When the company issue products have expired inventory and cannot be recycled, the cost of the loss of the company products are also increased. In addition, a high spending of company means that the profits will be reduced.

5. PEST analysis
Definition: A PEST analysis is concerned about the impact on the business environment, it may affect the political, economic, socio-cultural and...
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