Business Strategy Essay Sample
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* Executive summary
First part of this report includes analysis of how the business environment is considered in strategy formulation by defining the context of business strategies, explaining about significance of stake holders, covering the environmental and organizational audit of an organization and how to apply strategic positioning techniques to the analysis for the organization. The report focuses on the understanding on the processes of strategic planning by illustrating key indicators for the successful strategic plan. Further this report discussed on three strategy examples and the comparison of those strategies gaining the reader’s ability to think strategically. The continuation of the analyzing the first part will give a better understanding about the effective strategic planning. For the understanding about examine approaches to strategy evaluation and selection the report discussed about the evaluation possible alternative strategies for substantive growth and limited growth on retrenchment. Further discuss about the future strategies for the selected organization.
This assignment is all about the Business Strategy module which has been taught to us throughout this semester. The research is done through the internet and the text book which has given for us. This assignment includes all the details regarding the question which our lecturer gave and those been explained in a manner where anybody who reads or go through this assignment. The main objectives of doing this assignment are to make sound understanding of stakeholders, how to maintain relationship with them, involvement of the stakeholders in decision making, how to improve the relationship with stakeholders, use of new technology to improve the relationship between stakeholders. Further on in this report described the improvements need for the selected organization to make good communication method by evaluating the existing process of communication, the communication skills of employees have been described in this report to obtain an idea to develop them. Finally in the selected company how do they store data, what systems they use, types of data collections in their records, and how do they protect the data, etc….
Introduction to the company and Identify an appropriate business and an industry Nestle can be recognized as one of largest food manufacturing companies world-wide. Distributed around 480 factories approximately in around 87 countries throughout the world and helps the employment level massively of the world by employing around 265,500 people worldwide. By Today, Nestle has been recognized by almost everybody in the world as one of the largest food Multi-national companies which is there in the globe. Furthermore Nestle has altered itself with time to satisfy and meet the expectations of their consumers.
The Vision of Nestle
“The vision of Nestle is to be the leading nutrition, health and Wellness Company in the world,” The mission and core competences of Nestle
“At Nestle, we believe that research can help us make better food so that people live a better life. Good Food is the primary source of Good Health throughout life. We strive to bring consumers foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In addition to nutrition, health and wellness, Nestlé products bring consumers the vital ingredients of taste and pleasure.”
Define the context of the business.
The bottom line is that Nestle has become very successful due to one core reason which is, that they do not sacrifice long term goals and objectives for short term profit. Business in the context of it is that the way how organizations used their infrastructure and how to use their employers , customers , bank is what makes the contxt of business , the way how the ceo or the coo of the organization uses , in this organization nestle is wide vast organization and their context of business is all about food products which is very needed in one selves in dad to-day living societies.
Justifications to why you selected the particular industry
Why I have selected this particular organization is because how experiencing this organization will value into my concerns in time to come , this organization is one of the world’s leading organization. The particular need in this industry is that we all can learn how well this organization is disciplined , organized . all this is very important while selecting as to what I have selected , my personal opion is that this is the best ive taken forth for .
Identify the organizational position in the market
This refers to the market the organizational position in the market. This will also help the organization to identify their weaknesses and strengths.
To identify the strengths and weaknesses of an organization This refers to identifying the internal and the external environment of Nestle Private Limited and identifying the internal and external factors which affect the organization.
To identify market gaps in an organization
Certain stakeholders such as managers are interested in business activities to identify the small market gaps in the market where certain people demand for special goods and satisfying those special customers appropriately.
To utilize limited resources to achieve organizational goals The main organizational strategy is to increase the performance to make more profits. Stake holders are the parties who are affected by an also have an interest in how the business is operating and what it achieves. Stakeholders are people who will be impacted by the strategic plan of the company, who have information, experience or ideas that will be helpful in developing the plan and are visionary thinkers interested in exploring new opportunities. Customers, suppliers, employees and community are the main stakeholders of souls.
External and internal stake holder analysis
External analyses are the people or the party who are interested in a particular organization externally. For example we can take the above diagram into account, distributors, suppliers, Shareholders, Regulatory bodies, Government, Competitors and the business partners of Nestle Private Limited. Internal
Includes the parties who are interested in the business organization within the same particular business organization are called as internal stakeholders. These can be managers, employees and directors and so on. According to the above diagram 2.0 the internal stakeholders of the Nestle Corporation are managers, Board of directors, Unions etc.
Stakeholders of an organization
Stakeholders can be briefly defined as any party who are interested in an organization. This might be a member of an organization, volunteer, staff, management, board member, founder or a contracting body, client, community of interests such as locality or grouping of people who might benefit. Every business organization has a range of stakeholders. An organization is established based on blending the various interests of these stakeholder groupings. An objective to be the market leader of an organization will benefit all stakeholders because customers will receive high quality products, shareholders will receive high dividends, and employees will receive high wages. The reader of this report can get a better idea regarding the stakeholders of Nestle Private Limited by viewing the following diagram ( [ Figure 1 ]) which explains about the stakeholders of Nestle Company.
Figure [ 1 ] Stakeholders of Nestle Company
Furthermore there are two types of stakeholders in an organization, * Internal stakeholders
* External stakeholders
The management is interested about the profit and the growth of the company Employees
The employees are interested of the company is to ensure that their jobs are bean secured and the company is in a stable situation Suppliers
The suppliers want their payments on time. They are also interested in the company growth so that they could supply more and more. Creditors
The company has to pay the creditors on time. The creditors are interested about the organization performance because the company runs from the creditor’s money
The government wants the company to pay tax on time. The government wants company to do well since it brings in large amount of revenue through taxation on importing and exporting goods . They also want the company to follow the government labor rules and regulations
The competitors are interested about the company’s performance and the products so that they could compete with the organization Financial institutions The financial institutions are interested abut the performance because the company has to pay them the money back.
Customers the company to produce good quality tea expects a good service from the organization Applying appropriate positioning strategies to analyze the selected business . Strategic objective formation we can apply positioning strategies analysis to the selected business in which ways it can overcome difficulties of the normal positioning , in which case the same problems arises before clearly conclude the fact that Nestle is the dominating force in the fast moving consumer goods market in the domestic market as well as world- wide. So in my perspective the organization should focus on technological developments along with human resource and marketing factor developments which will take the Nestle a step forward towards the achieving more market share and growth while maximizing profit and retaining and creating new customers.
An objective can be defined as the specific targets that must be achieved if a business should fulfill its aims. And in brief when a result of a goal is expressed in a more certain and a clear manner it is known as an objective.
According to the above mentioned data we can easily conclude the fact that the organization is simply at the top of the fast moving consumer goods hierarchy in almost all the countries around the world. The strategic objectives which in my perspective I would like to develop for the next 5years that Nestlé Corporation should take into consideration which is in as follows,(by using previous studies as well). * Increase the profit margin by 25% within the next two years (2012). * Increasing the market share of the organization by 10% within the next three years (2013). * Double the productivity level within the time period of 12 months. * Gain a 15% increase in sales by the end of 2012.
Comparison of the characteristics of objectives with the newly developed objectives Specific
Simply all three objectives mentioned above are specific. All objectives are regarding profit maximizing, increasing market share, multiplying the productivity level and increasing sales of the organization.
All the above mentioned objectives are measurable. Simply all of them have themselves a target time duration where the organization can measure the performance.
As mentioned earlier, Nestle is a highly reputed organization within the market for producing a variety of products. It is simply one of the best fast food manufacturing organizations worldwide. All the above mentioned objectives are basically regarding the maximizing profit, market share and
doubling the productivity level are totally achievable by the organization.
The above mentioned objectives can be achieved since the high reputation of the organization and the position of the organization within the domestic and the outbound market.
Time bounded refers to a specific time frame which the objectives are been addressed to. All the above mentioned objectives are referred to a specific time limit in years and months in case of the third and the last objective.
Table 1 Comparison of the strategic objectives
Category| 1| 2| 3| 4|
Specific| * | * | * | * |
Measurable| * | * | * | * |
Achievable| * | * | * | * |
Realistic| * | * | * | * |
Time bound| * | * | * | * |
Importance of the strategic planning process
* To utilize organizational resources at the optimum level to achieve organizational activities. * To create a fit between the existing resources of the company and the current organizational opportunities. * To identify where the organization is positioned and to identify the path in which the organization should step on to in order to achieve success. * To have a better planning process within the organization to achieve goals. * To gain optimum usage out of the opportunities the organization gains.
* Double the productivity level within the time period of 12 months It has been the employees within the organization which has led Nestle to such a successful and demanding position in the domestic and global market. Productivity refers to increasing the output level while minimizing the input levels. The formula for productivity is efficiency + effectiveness = productivity or output/inputs. The more the productivity the more the consumer gets persuaded. It’s the organizational responsibility to measure the efficiency and to make sure that the organization is engaging in the business activities as best as they could and give 1st preference to the customer. Doubling the productivity level of Nestle can be implemented as follows, * Increasing and adapting new motivational strategies for employees. * Adapting new and modern management theories.
E.g.: Bureaucracy Management approach
Human relations approach
* Employee welfare and satisfaction and Improving labor relations This is one of the ultimate goals of a Human Resource Manager. Employees should be treated in an appropriate manner and should be satisfied accordingly by providing them with necessary welfare services. The Human Resource Managers are responsible for improving labor relations within employees in a specific organization. * Utilizing new technological factors which there for the taking As mentioned earlier the organization is simply been run by high technological systems. So Nestle can take it as an advantage and manipulate on that opportunity to increase the efficiency level while decreasing the occurrence of additional costs. * Optimizing the level of Planning
There are many methodologies in optimizing planning now a days in the world due to globalization development. So Nestle can adapt such methodologies in order to increase efficiency levels and effectiveness. Strategy 3> Increasing the market share of Nestle by 10% within the next three
years Nestle is simply one of the huge dominators in the fast moving consumer goods market in the domestic market as well as the global market. It has good and high market share within almost any market world-wide. The primary reason behind this is the following facts, * Innovation
* High market awareness about the organizations products
* Good planning and implementation of good plans (Promotional campaigns) Due to the above mentioned reasons, Nestle is one of the dominating organizations in the fast moving consumer goods market. The current market share of the organization is approximately amounted as 40% out of the total organizations in the specified industry. However, in order to increase the market share of the organization the following should are my recommendations, * Increase the capability and strengths of the organization
An organizational audit regarding the SWOT analysis is been analyzed earlier in this assignment. And in my opinion what nestle should do is to focus on their strengths such as Specialists in the industry, Generation of new products and The Profitable Location and improvise on the opportunities they gain to achieve this target successfully.
* Importing new products which are not available
This factor will be discussed later on this assignment. Nestle can strategize themselves to bring down and import the products which are not available in the domestic market to capture the market .Simply in the domestic market, Nestle is targeting the children as their primary target market. So if they can widen their target market, they have the competency and have created the charisma to achieve profit within a short period of time which will lead to high market share.
* Focus on increasing profit of the organization
Nestle can focus on their profit maximizing strategies which are mentioned above to increase market share.
* Evaluation and selection
Evaluate strategies using appropriate methods
The current situation: The current market share of the organization is according to the researches is 6.1%
Objective: To increase the market share by 10% within the end of 2011 As I mentioned earlier Nestle is in a very demanding position at the current situation, the organization should strategize themselves to conserve and retain the position in which they are right now and to create more and more sales and maximize profit. However in order to increase the market share from by 10%, the organization should identify the methodologies in which they can achieve the targeted objective by closing down the gap. Nestle can be recommended to follow the following business strategies in order to achieve the desired target. * Focus on good management of resources and increasing the productivity levels within the organization.
* Increasing the training and developments which are been offered to employees within the organization and Increase the motivational levels of the management. * Take modern management approaches to achieve short term goals which will facilitate the primary objective goals. * Innovation of new product categories which are targeted at new target market segments and improvisations. * Using the Pricing and promotional strategies as tools to create and retain customers while utilizing technology at its optimum. Identifying and evaluating resources requirements to implement the new strategy. Resources can be defined as a stock or supply of materials and assets. In economic terms there is a limitation in resources when compared to the unlimited wants of people. This been further defined by the term “scarcity”.
This implies, in brief there is limited number of resources to fulfill unlimited amount of wants. So the organizations should use these resources carefully and sustainably to make the future generation also have an amount of resources to be utilized. However when we discuss about the resource requirements to achieve the newly developed strategies for the organization, the most important point in perspective are people. By the term “people” I refer to the employees who are engaged in organizational activities and Labor activities in Nestle. Implementing the strategy which I developed will come as a challenge to the Nestle. And the capability of an organization to face challenges depend on a few things such as the culture, organizational hierarchy and the most important aspect is management practices of resources efficiently and to utilize the correct resource at the correct time. Besides all the facts the most valuable point which a manager should eye on is “people”. Managing People are the ultimate objective for managers and it is the most crucial constrain that an organization faces.
The respective parties should focus and should highly prioritize on people and human capital and labor rather than any other resource when achieving an objective like this. The organization should be indulged with capable employees who can control people or subordinates of the organization. For me in my perspective human capital plays a vital role in achieving profit and market share for the organization because any organization should prioritize on customers and they should be satisfied efficiently and effectively to achieve goals and objectives. So in order to identify those customer necessities the perfect resource that can be utilized is employees itself. Even though there are other resources such as Information and technological factors, they can only provide options to achieve targets successfully. But it will not generate 100% accurate decisions. So in my opinion Nestle should adapt Informational technology to gain information but the primary resource that they should focus on is “people”. Selecting an appropriate strategy to implement.
The strategic objective that I proposed to Nestle should be analyzed and monitored appropriately in order to make optimum usage of it and to identify that the organization is running on the correct path and track. A Manager cannot perform and monitor all the functions of an organization, due to the lack of time and specialized knowledge, and in my perspective I would recommend Nestle to have a specific department which will monitor the performance level and the accuracy level of the strategy implementation which will enhance the quality of the work which are been done by the respective parties as well as it will increase the efficiency in decision making in the organization.
As we all know, in the human resource department of any organization there is a process namely “performance appraisal”. Nestle can adapt and improvise on this and innovate a performance appraisal methodology to monitor the strategy implementation effectively and efficiently. I would like to suggest to monitor the performance of the organization every 2 months so that if there is a specified department responsible for the strategy implementation they actually can inform the defects to the top level managers and take decisions in how to overcome those constraints and etc. all the positive and the negative effects of the strategy implementation should be analyzed and the respective parties should take actions to minimize the negative effects and to optimize the positive effects for the organization.
The reviewing process should be done accurately so that the organization can improvise n the opportunities they gain by analyzing these strategy implementation plans which will also benefit the organization in an enormous way. However all in all this strategy which I proposed to implement will also create corporate social responsibility for the organization by creating more job opportunities for the public. So Nestle can take as an advantage to achieve their targets and desired objectives efficiently and effectively.
Finally by reviewing this, the organization also can come up to alternative contingency plans to execute if something by any chance go wrong in the uncertain environment for nestle. The organization also can take advantage of the technological factors which are available for them to monitor the performance as well. The following are some products which are been produced by Nestle which are extinct and yet and yet to be introduced to the domestic market. These can be taken as options available for Nestle to import to the domestic market as a product development strategy.
Picture [ 1 ] Nestle Cappuccino (Nescafe)
This is a Nestle Branded type of Coffee which is not there in the domestic market and yet to be introduced. So far in the Domestic Market there are no Cappuccino drinks available at market stored except for a specific number of hotels such as Taj Samudra and Cinnamon Grand (Coffee stop). Introducing the Nescafe Cappuccino into Sri Lanka would be a perfect opportunity for Nestle to diversify their product options and to increase the market share which will indirectly increase the profit for the organization.
Picture [ 2 ] Nesquik Cereal
This is another Nestle Branded product which is been produced by Nestle and is still to be introduced in to the domestic market. Nesquik is available in most foreign countries as a cereal and a chocolate drink for children of ages 10 – 15. When comparing the competitiveness for cereals in the domestic market, there are only a very few competitors such as Kallogs etc. So this would rather be a perfect opportunity for Nestle to achieve their desired target.
Kit Kat (Dark Chocolate)
Picture [ 3 ] Kit Kat (Dark Chocolate)
Kit Kat is pretty common on the domestic market where most of the children demand for. But the Dark chocolate version of Kit Kat is yet to be introduced into the domestic market. This is very popular in countries like India, United States of America etc. So as mentioned above this would be a perfect opportunity for Nestle to achieve their target too.
The following are some more options and products which are available to introduce to the Sri Lankan Market to achieve their determined objective
Honey Stars CerealNesquick Chocolate drink
Picture [ 4 ] Nesquick Chocolate drink
Picture [ 5 ] Honey Stars Cereal
Picture [ 6 ] Violet Crumble
Picture [ 7 ] More Nestle Chocolates
Violet CrumbleMore Nestle Chocolates
However, if we can also consider this as combinations of both market development as well as a product development strategy too. Because even though it is not exactly a new product which is been introduced to the market, for the domestic market it is a new product and because of the new product differentiation the market segment also might actually vary depending on the type of product. It is a fact to realize that the new milk powder introduced to the market by Nestle named “Nestum” can be taken as the best example to justify my statement. So we can consider this as a good strategy to adapt in case of nestle since because of the new product the organizations sales will increase and because of the increase in sales the markets share will also increase. Task 04
* Strategy implementation
Identifying the role and responsibilities for strategy implementation,
compare with different organization. * Competitor Profile
In Sri Lanka Unilever was incorporated in 1938 with only three brands namely Sunlight, Lux and Pears Rose. But today it has grown up to more than 20 more strong brands. And they stand as a fast moving Consumer Goods Multinational Company with various manufacturing facilities that are looking for innovation and business results. Haven said that, we can also conclude the fact that Unilever is one of the main competitors of Nestle Private Limited. They provide goods and services such as household care, fabric cleaning, skin cleansing, skin care, oral care, hair care, tea, spreads and personal grooming products simply substituted for the Nestle products offered by them to customers.
Unilever also provides a huge and a diversified product width and a length. At Unilever, there are 1300 employees directly working towards them and thousands more working indirectly through its hard working suppliers, distributors and service providers. At Unilever, they are planning on enhancing their brands to deliver stronger, rewarding product experiences which will impress their customers. They invest 1 billion pounds each year in cutting edge research and development, and to have laboratories around the world to explore new ideas and techniques to develop their products.
“Add vitality to life.” We meet everyday needs for nutrition; hygiene and personal care with brands that help people feel good, look good and get more out of life.” (Unilever, 2008)
Unilever Sri Lanka is a responsible company which is concerned about the environment through local actions and in partnerships with the government and other organizations. According to Unilever website, their values are,
* Purpose and principles
* Environment and society and Science and technology
* Nutrition, hygiene and personal care and Our people
Structure of Unilever
According to the research I did regarding the organizational structure of
Unilever, I figured out the fact that the organization is adopting a vertical or in other words a top down organizational structure. And this can be illustrated as follows,
Figure [ 2 ] Structure of Unilever
Is Unilever Marketing Oriented Organizations
The main function of marketing oriented organizations such as Unilever is to remain more closely to their customers and ahead of their competitors. The reason is that the fundamental objective of Unilever is to attract customers. There are three main characteristics of Unilever, * They are traditional producers of products within Unilever’s portfolio. * They hold strong positions in their national markets.
* “At Unilever they have mainly focused on marketing orientation within the organization.” They have potential to grow in both volume and range of products.
About MAS Intimates and Design
MAS Intimates have become the Pioneer of manufacturing & design excellence in the clothing industry in Sri Lanka in the past few years. Their team’s design skill creativity and technical powers are supported by the latest technology, facilitating the development of both basic and complex structured garments have become their leveraging factor among their competitors.
The MAS holding design studios are situated in New York, London, Hong Kong and Colombo and they keep them accustomed to their customer markets and latest fashion trends world-wide. Their MAS manufacturing facilities in India and Sri Lanka are highly reputed to be excellent in quality, workplace standards and processing. The MAS Holdings product designs and development capability combined with their integrated supply chain have enabled them to offer comprehensive satisfactions to their customers. Over the years they have grown as a convincing partner to brands such as Victoria’s Secret, VS Pink, VSX, Nike, Marks & Spencer and GAP Body etc.
Vision Statement of MAS Holdings
Vision of MAS Holdings is to set the benchmark in the apparel sector by developing joint strategic CSR initiatives with all of its key vendors in order to impact employees and the communities in which it operates – with the ultimate hope of making a genuine difference in society”. Figure [ 3 ] Structure of MAS intimates
Propose targets and time plan for achievement within next 5 years (P4.3) Increase the profit margin by 25% within the five years Nestle as mentioned above is reputed and well known to be a huge, diverse organization, so the organization is already in a high competitive position with stores all over the world. Because of that fact there are no intentions for the Nestle to make an aggressive move and to create more outlets within the country or other locations. So the prime objective of the organization which I created was regarding the profit margin. Nestle is well known for their products and they earn approximately profit margins in billions of dollars etc.
So in this case the organization should strategize themselves in order to achieve the objective of increasing the profit margin by 25% within the next two years or so. The ways in which the organization can achieve this objective is as follows, By innovation of new products which are not their ion the market Nestle can achieve the profit maximization objective easily by introducing new products to new markets which will attract new segments of customers. Since the organization is already producing and manufacturing a diverse amount of goods, the organization can eye on the service sector which will pay back good in my opinion.
Increasing the Promotional Campaigns
By increasing the promotional factors within the organization, the organization can convey and communicate with the targeted customer segment and remind, inform and persuade customers to purchase the products.
The organization can collaborate and make mergers and joint alliances This is another strategy that where the organization can achieve the profit maximization objective. Especially in case of joint alliances which are short term. But if the organization improvises and merges with one of the
leading organizations, there is a high possibility of achieving the target. Especially an organization like Cadbury would help to achieve the target objective successfully.
Recommendations for Nestle
Organizations have a mixture of organizational theories which they adapt in day to day organizational activities depending on the position of the organizations and the goals which should be achieved by them. Both Nestle and Unilever can be taken as rival competitors in the fast moving consumer goods market while the other organization, MAS holdings is a apparel related organization. Basically Nestle and Unilever are targeting more of marketing concepts rather than MAS holdings because the competitiveness and the demand for the fast moving consumer goods in the domestic market.
The primary distinctive characteristic of Nestle and Unilever is simply the target market and the product width and the length. Unilever doesn’t produce chocolate products while nestle produces and chocolate products for kids are simply their primary target market. However having said that I would like to recommend Nestle the following, Stricter rules, regulations and business ethics within the organization The managers should be stricter in work activities and in leading their subordinates because, the competition in the fast moving consumer goods industry is increasing rapidly and in order to face the challenges of competition and the environment challenges the managers should implement standard procedures and rules and regulations in how work should be done by the manager’s subordinates. This can be done by adapt autocratic leadership styles within the organization where the respective leaders can control the groups the way they want and in a good high standard.
From analyzing the above data and the data which I collected, it is possible for me to come up to the conclusion that Nestle is a huge diversified organization both product-wise and location-wise. And it has the characteristics and charisma of a more modernized and flexible organizational hierarchy rather than any other organization in the fast moving consumer goods industry. I would like to mention that Nestle Human Resource is an open cultured organization. As this assignment was to develop a strategic objective for a specific organization and to strategize in how the organization should achieve the particular objective. From all the information I gained I can conclude the fact in my perspective Nestle has a hint of an advantage over Unilever because they are adapting modernized approaches in achieving organizational goals and objectives. In the strategic objectives I developed for Nestle, are simply regarding profit maximization, increasing market share and the productivity levels.
I stepped onto those strategies because of the fact that Nestle is a huge multinational organization where they have themselves a complete advantage over their competitors in almost every angle. And when I move on to the strategies in order to achieve those strategic objectives are been illustrated to the reader through the GAP analysis and the ansoff’s matrix. However I did not take diversification in to account as a strategy due to it will not have much effect in diversifying the organization because of the high brand and customer loyalty (Brand advocate). And the main factor is the fact that diversifying the organization will cost a large amount of capital.
The assignment was designed in different tasks in order to enrich the students’ practical as well as theoretical knowledge. What I understood from this assignment is the fact that the ability of an organization to face challenges depend on a few things such as the culture, organizational hierarchy and the most important aspect is management practices of resources efficiently and to utilize the correct resource at the correct time. Besides all the facts the most valuable point which a manager should eye on is “people”. Managing People are the ultimate objective for an organization. So in my perspective, overall wise all three the organizations Nestle, Unilever and MAS Holdings have themselves their own unique nature they adapt in achieving organizational goals and objectives. All in all, all the information regarding how to achieve the proposed objectives are been given briefly s possible to make the reader understand my own idea. *
Principles of Marketing – Twelfth Edition – Philip Kotler, Gary Armstrong
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