International market evironment analysis

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The competitive advantages consist of:

1. People, Culture, values and attitude

The Nestle culture values diversity and always open to innovation. With the cultures that roots back to 150 years ago, Nestle believed in bringing their people together from all over the world with a shared set of behaviours and values into a single way of doing business.

2. Unmatched Geographic Presence

Nestle unmatched geographic presence has created a strong relationship between the corporation and the consumers which enable them to anticipate the needs and the quality expectations from consumers.

3. Unmatched Research and Development Capability

The global innovation, technology, research, and development capacity help them to be innovation in relevant and attractive for consumers and that advances their leadership in Nutrition, Health and Wellness.

4. Unmatched Products and Brand Portfolio

Their products and portfolio ranges from global icons to local favourites

Nestlé’s Growth Driver

1. Nutrition, Health and Wellness

To be the leader in Nutrition, Health and Wellness by providing wide varieties of healthier F&B choices which means responding to specific nutritional needs.

2. Emerging markets and Popularly Positioned Products

Nestle created Popularly Positioned products to emerge with lower incomes consumers, providing the nutritional information and also with promised quality and against nutritional deficiencies.

3. Out of home consumption

Out of home consumption is a fast growing part of the industry. It covers leisure, from the roadside kiosks in Asia to gourmet restaurants in the capitals of the world and institutional catering from schools to hospitals.

4. Premiumisation

Nestle also provide premium products for consumer that seek for the better quality F&B and willing to pay more for the premium products.

In addition, we have set out six strategic priorities.

1. Make Choices

Putting resources behind the ideas, products and categories that help Nestle on their journey to recognise Nutrition, Health and Wellness leadership, and to deliver sustained financial performance.

2. Grasp Opportunities

To see the opportunity in change and trends, and translate them into concrete business opportunities.

3. Value What Consumers Value

All that the company do should create value for consumers and drive out waste.

4. Engage with Stakeholders

Nestle wants to be trusted by all consumers and stakeholders as a genuine and responsible member of the community.

5. Embrace Digital

Deepen the connection with consumers through the growing e-commerce channel and through real-time listening, engagement and dialogue.

6. Win through People and Teams

Assigning the right people with the right capabilities and effective leadership at all levels to engage, empower and enable everyone to give their best.

4.2 STRATEGIC CHOICES

A decentralized and aligned organization

It is clear that Nestle is adopting Global strategy with having 436 factories in 85 countries and having their products being sold in 189 countries as per October 2016. Nestle is focusing on their product development as well as their geographical development. But, the unique thing in Nestle business is that they adopted decentralized strategy. Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree of autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. Products and services on sales in different countries were adapted to suit local market conditions. Local Nestlé units work within a global framework based on the Nestlé principle: “centralise what you must, but decentralise what you can“. In this way we combine the advantages of a worldwide company with the advantages of smaller, local businesses. Although Nestlé is very global, essentially it’s a company made up of smaller local units. Their global sales are simply the result of adding together the sales of each local company.

Nestlé has its own local companies in most countries. The Head Office in Switzerland sets overall strategy which is directed via Zone Management and the Strategic Business Units (SBUs). Geographically, Nestlé’s three Zones (Europe; America; Asia, Oceania, Africa and the Middle East) work closely with the local markets and the SBUs. Their primary role is that of enablers, acting as the voice of the centre to the markets, and the voice of the markets to the centre. Nestlé shares their company vision so that everyone around the world understands the direction to take – and how to get there with common tools, common strategies and common values. This ensures that Nestlé’s people around the world know how to act, and have a very strong framework of values and a clear reference point for fast decision-making.

Nestle also uses management development programs as a strategic tool for creating an esprit de corps among managers. At Rive-Reine, the company's international training centre in Switzerland, the company brings together managers from around the world, at different stages in their careers, for specially targeted development programs of two to three weeks' duration. The objective of these programs is to give the managers a better understanding of Nestlé’s culture and strategy and to give them access to the company's top management.

In addition to how the managers carry out their work as leaders, Nestlé pragmatically implements the following organisational principles:

- Being as decentralised as possible to optimally respond to the needs of consumers, within the framework defined by our fundamental policies, strategic