Swot Analysis of "Nestle's Globe Program (C): "Globe Day"" written by Peter Killing includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Globe Nestle's facing as an external strategic factors. Some of the topics covered in Nestle's Globe Program (C): "Globe Day" case study are - Strategic Management Strategies, Change management, Globalization, Project management, Strategy execution and Global Business.
Some of the macro environment factors that can be used to understand the Nestle's Globe Program (C): "Globe Day" casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing energy prices, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Nestle's Globe Program (C): "Globe Day"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nestle's Globe Program (C): "Globe Day" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Globe Nestle's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Globe Nestle's 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's Globe Program (C): "Globe Day" can be done for the following purposes –
1. Strategic planning using facts provided in Nestle's Globe Program (C): "Globe Day" case study
2. Improving business portfolio management of Globe Nestle's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Globe Nestle's
Strengths Nestle's Globe Program (C): "Globe Day" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Globe Nestle's in Nestle's Globe Program (C): "Globe Day" Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Globe Nestle's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Globe Nestle's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Globe Nestle's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Globe Nestle's 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's Globe Program (C): "Globe Day" - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Globe Nestle's in the sector have low bargaining power. Nestle's Globe Program (C): "Globe Day" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Globe Nestle's to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Globe Nestle's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Globe Nestle's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Globe Nestle's 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.
Ability to recruit top talent
– Globe Nestle's is one of the leading recruiters in the industry. Managers in the Nestle's Globe Program (C): "Globe Day" are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Nestle's Globe Program (C): "Globe Day" Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Globe Nestle's 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 Peter Killing 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.
Learning organization
- Globe Nestle's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Globe Nestle's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nestle's Globe Program (C): "Globe Day" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Globe Nestle's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nestle's Globe Program (C): "Globe Day" 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.
Organizational Resilience of Globe Nestle's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Globe Nestle's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Nestle's Globe Program (C): "Globe Day" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nestle's Globe Program (C): "Globe Day" are -
Low market penetration in new markets
– Outside its home market of Globe Nestle's, firm in the HBR case study Nestle's Globe Program (C): "Globe Day" needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Nestle's Globe Program (C): "Globe Day" 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 Globe Nestle's 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Globe Nestle's supply chain. Even after few cautionary changes mentioned in the HBR case study - Nestle's Globe Program (C): "Globe Day", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Globe Nestle's vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Globe Nestle's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Nestle's Globe Program (C): "Globe Day" should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nestle's Globe Program (C): "Globe Day", is just above the industry average. Globe Nestle's 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.
Increasing silos among functional specialists
– The organizational structure of Globe Nestle's is dominated by functional specialists. It is not different from other players in the Global Business segment. Globe Nestle's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Globe Nestle's to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Nestle's Globe Program (C): "Globe Day", it seems that company is thinking about the frontier risks that can impact Global Business 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.
Slow decision making process
– As mentioned earlier in the report, Globe Nestle's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Globe Nestle's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Nestle's Globe Program (C): "Globe Day" 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's Globe Program (C): "Globe Day" can leverage the sales team experience to cultivate customer relationships as Globe Nestle's is planning to shift buying processes online.
Need for greater diversity
– Globe Nestle's 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.
Lack of clear differentiation of Globe Nestle's products
– To increase the profitability and margins on the products, Globe Nestle's needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Nestle's Globe Program (C): "Globe Day" | 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's Globe Program (C): "Globe Day" 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 Globe Nestle's in the consumer business. Now Globe Nestle's can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Globe Nestle's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Globe Nestle's 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Globe Nestle's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Globe Nestle's can use these opportunities to build new business models that can help the communities that Globe Nestle's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Globe Nestle's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Globe Nestle's 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's Globe Program (C): "Globe Day", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Globe Nestle's 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Globe Nestle's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Globe Nestle's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Globe Nestle's has opened avenues for new revenue streams for the organization in the industry. This can help Globe Nestle's to build a more holistic ecosystem as suggested in the Nestle's Globe Program (C): "Globe Day" case study. Globe Nestle's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Globe Nestle's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Globe Nestle's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Globe Nestle's 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's Globe Program (C): "Globe Day" - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Globe Nestle's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Nestle's Globe Program (C): "Globe Day" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nestle's Globe Program (C): "Globe Day" are -
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Globe Nestle's 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's Globe Program (C): "Globe Day" .
Increasing wage structure of Globe Nestle's
– 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 Globe Nestle's.
High dependence on third party suppliers
– Globe Nestle's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Globe Nestle's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Shortening product life cycle
– it is one of the major threat that Globe Nestle's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Globe Nestle's in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Globe Nestle's 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Globe Nestle's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Globe Nestle's 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. Globe Nestle's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Globe Nestle's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Globe Nestle's needs to keep up with the evolution of technology in the Global Business 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.
Consumer confidence and its impact on Globe Nestle's 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's Globe Program (C): "Globe Day" 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's Globe Program (C): "Globe Day" 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's Globe Program (C): "Globe Day" 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's Globe Program (C): "Globe Day" 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's Globe Program (C): "Globe Day" 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 Globe Nestle's needs to make to build a sustainable competitive advantage.
