Assignment on EFE, CPM and IFE of Nestlé
Submitted By:
Sheikh Abira Khalid
Sania Ali
Sarah Shariq
Zehra Jabeen Khan
Usman Ikram
Submitted To:
Dr. Shameel Ahmed Zubairi
External Factor Evaluation
Key External Factors Weight Rating Weighted Score
Opportunities:
1. Due to high dairy production Nestle can
increase its food segment by ice-cream, milk
products. 0.07 3 0.21
2. Growing ready-to-drink (RTD) tea and RTD
coffee markets. 0.05 2 0.1
3. Advertise Brand’s clearer image in
consumers mind by allowing visitors to kitchen. 0.1 1 0.1
4. Fall of communism- Nestle benefited in the
former Soviet Union and Eastern Europe.
0.07 1 0.07
5. Potential in dairy and agro products in
Pakistan. 0.06 4 0.24
6. Opportunity in baby food product line. 0.15 3 0.45
Threats:
1. Dairy products are being replaced by vegan
diets (Sales Decrease). 0.06 3 0.18
2. Packaging in plastic fails to comply with
current regulations. 0.11 2 0.22
3. As coffee beans are getting short being a
renewable resource, price of coffee and
chocolate products will get rise. 0.09 3 0.27
4. Increased competition in food and
beverage industry. 0.17 3 0.51
5. Tax fluctuation policies are always a major
threat for food industry. 0.04 1 0.04
6. Food contamination rumor. 0.03 4 0.12
Total 1.00 2.51
Competitive Profile Matrix (CPM):
NESTLE UNILEVER HERSHEY’S
Critical Success Factor Weight Rating Score Rating Score Rating Score
Brand reputation 0.13 4 0.52 4 0.52 3 0.39
Level of product integration 0.08 4 0.32 3 0.24 2 0.16
Range of products 0.05 3 0.15 4 0.20 2 0.10
Successful new introductions 0.04 3 0.12 3 0.12 3 0.12
Market Share 0.14 4 0.56 4 0.56 3 0.42
Sales per employee 0.08 3 0.24 3 0.24 4 0.32
Price competitiveness 0.05 2 0.10 3 0.15 4 0.20
Variety of distribution channels 0.07 4 0.28 3 0.21 3 0.21
Customer retention 0.02 3 0.06 4 0.08 4 0.08
Global Expansion 0.11 3 0.33 4 0.44 3 0.33
Product Quality 0.15 4 0.60 4 0.60 4 0.60
Successful promotions 0.08 4 0.32 4 0.32 3 0.24
Total 1.00 - 3.60 - 3.68 - 3.17
Internal Factor Evaluation
Key Internal Factors Weight Rating Weighted Score
Strengths:
1. Nestle water can lead upto 25% - 36% the total
market sales. 0.16 3 0.48
2. Unmatched research and development. It spent
1,687 CHF million in 2018 on R&D. 0.05 4 0.2
3. Strong geographic presence, with sales and
distribution across 190 countries. 0.06 4 0.24
4. Energy optimizations across operations resulted
in a reduction of 3% GJ per ton from 2018 by
optimizing the usage of energy across the sites of
Nestle. 0.09 3 0.27
5. In 2008, Nestlé Waters became the largest
bottled water brand in the world, it has roughly
31,740 employees and includes 51 distinct brands. 0.06 4 0.24
6. Very strong value of stock. In Pakistan it is Rs.
6,410. 0.13 3 0.39
Weaknesses:
1. Low cost products, Nestle can't go to expensive
products. 75% of the revenue is generated
through low cost products. 0.07 2 0.14
2. Criticism over high water usage, selling
contaminated food. Maggi brought half a billion
rupees loss to Nestle in India. 0.13 2 0.26
3. Price fluctuations by retail giants. 0.05 2 0.1
4. Trend towards healthy food. 0.1 1 0.1
5. The rival company Danone is one of the largest
competitors in the dairy product market. 0.04 1 0.04
6. Alternatives of chocolate products are available
in the market, which has dropped the market
share of Nestle by 20%. 0.06 1 0.06
Total 1.00 2.52