Nestle SA: Nutrition, Health and Wellness Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nestle SA: Nutrition, Health and Wellness Strategy
In 1997 NestlA? committed to a strategic vision of becoming the leading nutrition, health and wellness (NHW) company in the world. Over the next 13 years, the NHW strategy guided strategic decisions and choices at NestlA? including merger and acquisition choices, strategies for improving products, and packaging innovations that helped NestlA? built credibility with the consumer in NHW, raised profit margins, continued strong growth and differentiated the firm.
Swot Analysis of "Nestle SA: Nutrition, Health and Wellness Strategy" written by Rebecca Henderson, Ryan Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nhw Nestla facing as an external strategic factors. Some of the topics covered in Nestle SA: Nutrition, Health and Wellness Strategy case study are - Strategic Management Strategies, Emerging markets, Growth strategy, Innovation, Internet, Mergers & acquisitions, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Nestle SA: Nutrition, Health and Wellness Strategy casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing commodity prices,
increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Nestle SA: Nutrition, Health and Wellness Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nestle SA: Nutrition, Health and Wellness Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nhw Nestla, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nhw Nestla operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nestle SA: Nutrition, Health and Wellness Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Nestle SA: Nutrition, Health and Wellness Strategy case study
2. Improving business portfolio management of Nhw Nestla
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nhw Nestla
Strengths Nestle SA: Nutrition, Health and Wellness Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nhw Nestla in Nestle SA: Nutrition, Health and Wellness Strategy Harvard Business Review case study are -
Highly skilled collaborators
– Nhw Nestla has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nestle SA: Nutrition, Health and Wellness Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Nhw Nestla
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nhw Nestla does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Nhw Nestla is one of the leading recruiters in the industry. Managers in the Nestle SA: Nutrition, Health and Wellness Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Nhw Nestla are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Nhw Nestla is present in almost all the verticals within the industry. This has provided firm in Nestle SA: Nutrition, Health and Wellness Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Nhw Nestla has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nhw Nestla has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Nhw Nestla is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Rebecca Henderson, Ryan Johnson can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Nhw Nestla has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Nestle SA: Nutrition, Health and Wellness Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Nhw Nestla is one of the most innovative firm in sector. Manager in Nestle SA: Nutrition, Health and Wellness Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Nhw Nestla has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nhw Nestla to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Nhw Nestla has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Nhw Nestla has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nestle SA: Nutrition, Health and Wellness Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Nestle SA: Nutrition, Health and Wellness Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nestle SA: Nutrition, Health and Wellness Strategy are -
Skills based hiring
– The stress on hiring functional specialists at Nhw Nestla has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Nhw Nestla needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Nhw Nestla products
– To increase the profitability and margins on the products, Nhw Nestla needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Nestle SA: Nutrition, Health and Wellness Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nestle SA: Nutrition, Health and Wellness Strategy can leverage the sales team experience to cultivate customer relationships as Nhw Nestla is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Nestle SA: Nutrition, Health and Wellness Strategy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Nestle SA: Nutrition, Health and Wellness Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nhw Nestla 's lucrative customers.
Need for greater diversity
– Nhw Nestla has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nestle SA: Nutrition, Health and Wellness Strategy, in the dynamic environment Nhw Nestla has struggled to respond to the nimble upstart competition. Nhw Nestla has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Nhw Nestla has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nestle SA: Nutrition, Health and Wellness Strategy, is just above the industry average. Nhw Nestla needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nhw Nestla is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nestle SA: Nutrition, Health and Wellness Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Nestle SA: Nutrition, Health and Wellness Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nestle SA: Nutrition, Health and Wellness Strategy are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nhw Nestla in the consumer business. Now Nhw Nestla can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nhw Nestla can use these opportunities to build new business models that can help the communities that Nhw Nestla operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nhw Nestla can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Nhw Nestla can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Nhw Nestla can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Nhw Nestla has opened avenues for new revenue streams for the organization in the industry. This can help Nhw Nestla to build a more holistic ecosystem as suggested in the Nestle SA: Nutrition, Health and Wellness Strategy case study. Nhw Nestla can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Nhw Nestla has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Nestle SA: Nutrition, Health and Wellness Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nhw Nestla to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nhw Nestla can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Nhw Nestla can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nhw Nestla in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Loyalty marketing
– Nhw Nestla has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Learning at scale
– Online learning technologies has now opened space for Nhw Nestla to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nhw Nestla can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Nestle SA: Nutrition, Health and Wellness Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Nestle SA: Nutrition, Health and Wellness Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nestle SA: Nutrition, Health and Wellness Strategy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nhw Nestla can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Nestle SA: Nutrition, Health and Wellness Strategy .
Environmental challenges
– Nhw Nestla needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Nhw Nestla can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Nhw Nestla
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nhw Nestla.
Stagnating economy with rate increase
– Nhw Nestla can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nestle SA: Nutrition, Health and Wellness Strategy, Nhw Nestla may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nhw Nestla with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nhw Nestla business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nhw Nestla in the Strategy & Execution sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nhw Nestla can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Nhw Nestla has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nhw Nestla needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nhw Nestla in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Nhw Nestla demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Nestle SA: Nutrition, Health and Wellness Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nestle SA: Nutrition, Health and Wellness Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nestle SA: Nutrition, Health and Wellness Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nestle SA: Nutrition, Health and Wellness Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nestle SA: Nutrition, Health and Wellness Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nhw Nestla needs to make to build a sustainable competitive advantage.
