SWOT Analysis and finances of Nestle

SWOT psychoanalysis and finances of come on come on is one of the worlds leader in the intellectual nourishment transitioning and consumer jammed franks industry. Founded by Henri nose in 1866 in Vevey Switzerland, it has become worldwide with nigh 85 branches around the world specializing in a variety of products ranging from sm every last(predicate) fry food, drinks and bottled water to confectionery and starter cream. (Micheloud Cie, 2008) In the race to achieve a high market shargon in the wish-wash cream industry, hold tight is followed closely by its global competitor Unilever, a Dutch/British multi subject area operating across many countries in the world with its grow betray name and products. In put up to perform better, nestle followed a series of acquisitions to grow in the global market.In order to light upon step to the fore its resources, capabilities and core competencies, an internal environmental analysis (SWOT Analysis) of Nestle has to be conduct ed.Resources can be divided into tangible and intangible resources. Tangible resources implicate Human resources, equipment, financial resources or capital and raw materials. Such resources argon easier to put a value on, but they are as well clear to copy and hence are not unique to an organization. On the some other(a) hand, intangible resources include technology, knowledge, expertise, soft touch name, copyright, patent, goodwill etc. Such resources are not easy to copy. Hence being unique, a company having such(prenominal) resources should be equal to(p) to achieve sustained war-ridden advantage.SWOT Analysis of NestleSTRENGTHSWEAKNESSESGood Brand Name Nestle has created a brand name for itself in international markets and likewise owns brands such as fit out Kat and Lion Bar.Acquisitions Nestle grew through acquiring various national companies. This meant they had to prepare them to also face the necessary risks involved in the process of acquisition and even after. A lso global integration proved to be a hindrance.L grouchnsed Brands It has l spyglassnsed brands from Disney and in turn has apply this to break out exclusive ice cream products such as Extreme ice cream cones. This grew to Nestles advantage the Disney characters were now linked to Nestle.Weak distribution links Nestle suffered as they did could not reach their products to all the local anesthetic markets overdue to poor distribution links. On the other hand Unilever maintained good relationships with the local companies and retailers to as to ensure adequate freezer space in most of the small outlets in the country. Their objective was to gain maximum freezer space in order to make their products avail satisfactory to the customers at all times. In certain cases the company also rented its freezer to smaller stores.engineering Nestle has invested a great deal in modern technology. It has utilise this technical development wide range of newborn to develop innovations in ice cream and have also launched a chain of patent products. Nestle set up a research laboratory in North America and Europe to research and develop new technologies in ice cream. By doing this the company hoped to achieved a sustained competitive advantage. local Competition It was difficult for Nestle to compete on a local level. Nestle allowed its national companies to develop local flavors which did not prove to be effective. They also could not compete with the low overhead hails from the local supermarket chains and companies.Successful Diversification Nestle has not only succeeded and move on in the ice cream industry but has also apply its knowledge and spread into breakfast cereals, chocolate and confectionery, dairy products, coffee, drinks, baby food and bottled water. Taking this risk of entering new market has proved to be extremely successful for Nestle over the years.Achieving Profitability In countries where Nestle could not achieve a significant market share, achievi ng profitability also proved to be a study predicament.Economies of Scale Nestle has been able to achieve lower costs as a issue of high volumes of production. They achieved economies of scale by branding the products that were usually manufactured at a central location with the national company name, therefrom reducing cost of storage and transportation.Costs Yet another limitation of Nestle was to kill the high fixed costs of developing and distributing ice cream. In order to reduce such high fixed costs, Nestle needs a high market share so that profitability can also be increased.Unilever definitely established a competitive advantage by maintain strong distribution links with its suppliers, an important factor that Nestle did not take into consideration. Unilever also achieved competitive advantages in terms of hearty local tastes and prices. These strengths of Unilever have proved to be threats for Nestle.Comparative Analysis of the Strategies used by Unilever and NestleS TRATEGIESNESTLEMarket Challenger on the firingUNILEVERMarket leader on defenseApproach to Strategy normative Approach Nestle definitely followed a more planned get to achieve its organizational objectives. They stuck to their plans without making major changes. As a result of this planned approach they were able to put their resources to a much more efficient use.Mix of Prescriptive and Emergent Approach Although Unilever had its planned objectives of becoming the world leader in ice cream, they kept developing strategies to improve and work on their weaknesses. They kept up with the changes in the environment and were able to satisfy its huge customer base therefore achieving a competitive advantage over Nestle. Unilever developed flexibility and adaptability.Generic StrategyNestle differentiated itself from its major competitor Unilever by using its huge investment in technology to develop various patented products. It also associated itself with Disney characters by obtain ing licensed brands.Unilever was able to achieve economies of scale which in turn do it easier for them to also achieve cost leadership. They were able to reduce the costs and thus successfully enter the local markets.Growth StrategyNestle followed an inorganic growth strategy through a series of acquisitions. It teamed up with other major companies to expand and develop a quicker market share. They acquired ice cream companies in more 30 major countries. Some major acquisitions included Dreyers, the US market leader and Scholler, a principal ice cream company in 2002.By achieving economies of scale, Unilever was able to keep out new entrants that could not achieve such low costs. In appurtenance to keeping out new entrants, Unilever also worked alongside local brand names thus following an inorganic method of growth.Growth managementNestle diversified by producing new products and entering new markets, thus spreading its risk. It developed breakfast cereal, confectionary, baby f ood, dairy products etc.Unilever on the other hand followed a product development strategy. They developed new products in the existing market. They acquired local brands and developed additional variety of ice cream products.