FACULTY OF BUSINESS AND MANAGEMENT BACHELOR OF BUSINESS

ADMINISTRATION (HONS.) FINANCE

STRATEGIC MANAGEMENT (MGT657)

COMPANY REVIEW: NESTLE MALAYSIA

PREPARED BY:

NO NAME MATRIX NUMBER

1. NUR AISYA AMALIN BINTI MOHD ZAMRI 2021834298
2. NOR DAYANA NABILA BINTI ROSBAN 2021849846
3. AKILI FARHA BINTI MAT TAHIR 2021477754
4. MUHAMMAD AFIQ BIN ARAHIM 2021864644

CLASS : BA242 5B (GROUP 1)

LECTURER : DR. CHE MOHD SYAHARUDDIN BIN CHE COB
DATE OF SUBMISSION : 26th JUNE 2023
 EXECUTIVE SUMMARY

The purpose of this report is to evaluate the Nestle Company based on a case study
and understand how companies develop strategic intentions for their business organisation.
This follows an analysis of the external and internal business environment. We will analyse
the strategic management process as used by firms to achieve strategic competitiveness and
earn above average returns. We also discuss strategy formulation which includes business
level strategy and corporate level strategy.

It aims to identify marketplace opportunities and threats in the external environment

and to decide how to use their resources, capabilities and core competencies in the firm's
internal environment to pursue opportunities and overcome threats. We also can identify the
problem of Nestle that makes this company more challenging in operating in the market. To
strengthen this assignment about Nestle. There are several data collection methods that have
been carried out such as Space Matrix, BCG Matrix and SWOT analysis.

By the end of this assignment, the future strategy will be mentioned as well as our
suggestions about Nestle that fit the strategic orientation to show better performance in their
business world. From this, Nestle can have established a strong market position and brand
recognition in the future.

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 ACKNOWLEDGEMENTS

Praise be to Allah SWT for giving us the time, health, and strength to complete this
study. Despite a minor hiccup among us while working on this project, group members
completed it to the best of their abilities. Fortunately, all of the issues have been resolved, and
we have been able to adjust effectively and prudently.

Following that, we would like to express our gratitude to our lecturer, Dr. Che Mohd
Syaharuddin Bin Che Cob, for his assistance and support in completing this assignment and
instructing us in this course. He provided us with moral support and counselled us on several
topics. He had been really gracious and patient in presenting us with the outlines of this
report.

Furthermore, we cannot finish this task without the help and cooperation of our group
members, Nur Aisya Amalin Binti Mohd Zamri, Nor Dayana Nabila Binti Rosban, Akili
Farha Binti Mat Tahir, and Muhammad Afiq Bin Arahim. We are also grateful to our family
and friends, who have always been supportive of us in finishing our report efficiently and
providing us with many useful remarks, which have really aided us in preparation for this
task.

Lastly, many thanks to the Business Management faculty for giving us enough
material to finish this evaluation report, as well as to those who have contributed directly or
indirectly.

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 TABLE OF CONTENTS

EXECUTIVE SUMMARY…………………………………………………...…………….….i

ACKNOWLEDGEMENTS………………………………………………..…….……………ii

TABLE OF CONTENTS………………….……………………………….………………iii-iv

1.0 BACKGROUND OF NESTLE

1.1 HISTORY OF NESTLE…………………………………...…………………….1-3

1.2 VISION…………………..……………………………………..…………………4

1.3 MISSION…………...…………………………………………..…………………4

1.4 ORGANISATIONAL CULTURE……………………………..…………………..5

1.5 GOALS AND OBJECTIVES……………………………………..……….……6-7

1.6 LOGO……………………………………………………………..……………….8

1.7 BOARD OF DIRECTORS………………………………………..……………….9

2.0 COMPANY REVIEW

2.1 SWOT ANALYSIS………………………………………………………………10

2.1.1 STRENGTHS…………………………………………..…………..10-13

2.1.2 WEAKNESS…………………………………...…………………...13-15

2.1.3 OPPORTUNITIES……………………………...…………………..16-17

2.1.4 THREATS……………...…………………………...………………18-19

2.2 STRATEGY FORMULATION FRAMEWORK (STAGE 1)

2.2.1 IFE…………………………………………...……………………...20-22

2.2.2 EFE………………………………………………..………………..23-25

2.2.3 CPM………………………………………………………...………26-27

2.3 ACHIEVEMENTS……………………………………………………………….28

2.4 PROBLEMS…………………………………..……………………………...29-30

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 2.5 CONCLUSION…………………………………………………………………..31

3.0 COMPANY STRATEGIC PLAN

3.1 STRATEGY FORMULATION (STAGE 2)

3.1.1 SPACE MATRIX……………………..…………………………….32-33

3.1.2 BCG MATRIX……………………………...………………………34-35

3.2 STRATEGY FORMULATION (STAGE 3)

3.2.1 QSPM…………………………………………..….………………..36-37

3.3 CONCLUSION…………………………………………………………………..38

4.0 STRATEGY IMPLEMENTATION

4.1 PRODUCT INNOVATION………………………………………………………39

4.2 AFFORDABLE, ACCESSIBLE NUTRITION…………….……………...……40

4.3 PREMIUM PRODUCTS……………………………………………….………..41

4.4 CONCLUSION…………………………………………………………………..42

5.0 CONCLUSION AND RECOMMENDATIONS

5.1 EXPECTATION OF THE NEW STRATEGIES…………………………………43

5.2 RECOMMENDATIONS…………………………………………………………44

REFERENCES……………………………………………………………….………………45

APPENDICES……………………..…………………………………………………………46

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1.0 BACKGROUND OF NESTLE

1.1 HISTORY OF NESTLE

1866-1905

In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable
to breastfeed. His first success was a premature infant who could not tolerate his
mother's milk or any of the usual substitutes. People quickly recognized the value of
the new product, after Nestlé's new formula saved the child's life, and soon,
FarineLactée Henri Nestlé was being sold in much of Europe.

1905-1918

In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the
early 1900s, the company was operating factories in the United States, Britain, Germany
and Spain. World War I created new demand for dairy products in the form of government
contracts. By the end of the war, Nestlé's production had doubled.

1918-1938

After the war Government contracts dried up and consumers switched back to
fresh milk. However, Nestlé's management responded quickly, streamlining operations
and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate
the Company's second most important activity.

1938-1944

Nestlé felt the effects of World War II immediately. Profits dropped from $20
million in 1938 to $6 million in 1939. Factories were established in developing countries,
particularly Latin America. Ironically, the war helped with the introduction of the
Company's newest product, Nescafe, which was a staple drink of the US military. Nestlé's
production and sales rose in the wartime economy.

1944-1975

The end of World War II was the beginning of a dynamic phase for Nestlé.
Growth accelerated and companies were acquired. In 1947 came the merger with
Maggi seasonings and soups. Crosse & Blackwell followed in 1960, as did Findus
(1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in
L'Oréal in 1974.

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1975-1981

Nestlé's growth in the developing world partially offset a slowdown in the

Company's traditional markets. Nestlé made its second venture outside the food industry by
acquiring Alcon Laboratories Inc.

1981-1995

Nestlé divested a number of businesses 1980 / 1984. In 1984, Nestlé's improved

bottom line allowed the Company to launch a new round of acquisitions, the most
important being American food giant Carnation.

1996-2002

The first half of the 1990s proved to be favourable for Nestlé: trade barriers
crumbled and world markets developed into more or less integrated trading areas.
Since 1996, there have been acquisitions including San Pellegrino (1997), Spillers Pet foods
(1998) and Ralston Purina (2002). There were two major acquisitions in North
America, both in 2002 in July, Nestlé merged its U.S. ice cream business into
Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America.

2003 and above

The year 2003 started well with the acquisition of Mövenpick Ice Cream,
enhancing Nestlé's position as one of the world market leaders in this product category.
In 2006, Jenny Craig and Uncle Toby's were added to the Nestlé portfolio and 2007
saw Novartis Medical Nutrition, Gerber and Henniez join the Company.

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 Nestlé is a Swiss multinational food and drink processing conglomerate corporation
headquartered in Vevey, Vaud, Switzerland. It has been the largest publicly held food
company in the world. Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk
Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactée
Henri Nestlé, founded in 1866 by Henri Nestlé.

Nestlé has a big range of products across markets, this includes coffee, baby food,
medical food, bottled water, milkshake, breakfast cereals, infant foods, performance and
healthcare nutrition, seasonings, soups and sauces, frozen and refrigerated foods, and pet
food. Twenty-nine of Nestlé's brands have annual sales of over 1 billion about US$1.1 billion,
including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi.
Nestlé has 447 factories, operates in 194 countries, and has around 339,000 employees under
Nestle.

Lastly, Nestle's company strategy has few basic principles. Products of Nestle produce
through Innovation and transformation, at the same time balanced local production line and
activities. As the leading Food, Nutrition, Health and Wellness Company, Nestlé is the
provider of the best food for whatever time of day and for whatever time of your life.

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1.2 VISION

The company’s vision is to be a leading, competitive, Nutrition, Health and Wellness

Company delivering improved shareholder value by being a preferred corporate citizen,
preferred employer, preferred supplier selling preferred products.

1.3 MISSION

The company’s mission is "Good Food, Good Life" is to provide consumers with the best
tasting, most nutritious choices in a wide range of food and beverage categories and eating
occasions, from morning to night.

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1.4 ORGANISATIONAL CULTURE

Nestlé is a multinational food and beverage corporation with a global reach. Nestlé's
organisational culture is defined by many important characteristics that are reflected in the
company's values and practices. First and foremost, there is a focus on the consumer. Nestlé
prioritises knowing and addressing the requirements of its customers. The firm seeks to
produce high-quality products and services that improve people's and families' lives.

Nestlé is also devoted to providing goods that satisfy the highest quality and safety
requirements. To continually enhance its goods, the firm has built stringent quality control
methods and invests in research and development. Next is diversity and inclusion, which
values diversity and believes in creating an inclusive work environment where employees
feel respected, valued, and empowered. The company recognizes the strength that comes
from a diverse workforce and fosters a culture that celebrates differences.

They promote an environment of innovation and constant progress. The firm strives to
remain at the forefront of the food and beverage sector by investing in research, development,
and technical developments while also being a good corporate citizen and prioritising
sustainability in its operations. The company's goal is to reduce its environmental effect,
encourage responsible raw material procurement, and positively contribute to the
communities in which it operates.

Finally, Nestlé encourages cooperation and teamwork across all of its divisions and
activities. Working together and exploiting the varied abilities and viewpoints of its workers,
the organisation thinks, leads to greater outcomes. Nestlé supports high integrity and ethical
standards in its business practices. In all nations where it works, the firm is devoted to
openness, responsibility, and compliance with laws and regulations. These elements work
together to shape Nestlé's organisational culture, influencing how the firm works, takes
decisions, and interacts with its workers, customers, and stakeholders. Nestlé has a unique
collaborative culture where we expect employees to be agile and make decisions quickly. We
want people who bust through roadblocks and move fast. (Jon Salmons)

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1.5 GOALS AND OBJECTIVES

Nestlé has a set of objectives and goals that guide its strategic direction and shape its
operations. First is sustainable growth. Nestlé aims to achieve sustainable and profitable
growth by expanding its product portfolio, entering new markets, and capturing opportunities
in emerging economies. The company seeks to achieve this growth while maintaining its
commitment to quality, innovation, and consumer satisfaction. They are also dedicated to
enhancing the quality of life and contributing to a healthier future for individuals and
families. The company strives to provide nutritionally balanced products and promote healthy
eating habits through initiatives such as portion control, reducing added sugars, and fortifying
products with essential nutrients.

Next is committed to reducing its environmental effect across its supply chain. The
firm works on issues such as water conservation, waste reduction, greenhouse gas emissions,
and raw material sustainability. Nestlé aspires to eliminate waste to landfill and make
considerable progress towards meeting its climate change targets. They understand the
significance of assisting rural areas, particularly those in the agricultural industry. The
company's goal is to improve farmers' lives and encourage ethical sourcing practices. Nestlé
offers farmers with training, information, and tools to assist them enhance their productivity,
sustainability, and overall agricultural practices.

In addition, is employee development and engagement. Nestlé cherishes its staff

members and works to provide a welcoming workplace. The business supports the
professional growth of its staff members by offering chances for training, mentorship, and
career progression. In addition, Nestlé promotes employee involvement because it
understands that empowered and driven workers are essential to the success of the business.
To address societal issues and give back to the areas where it works, Nestlé also actively
participates in corporate social responsibility (CSR) projects. The firm focuses on issues
including rural development, encouraging ethical corporate conduct, and aiding local
communities through a variety of charity initiatives.

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 Lastly is ethical business practices. Nestlé has an unwavering commitment to
responsible conduct and ethical business practices. In all of its activities, the corporation
makes an effort to uphold the greatest levels of honesty, openness, and legal and regulatory
compliance. Along the entire value chain, Nestlé works to guarantee that human rights,
labour laws, and ethical business practices are upheld. These aims and objectives show
Nestlé's dedication to long-term sustainability, customer focus, worker welfare, and ethical
business practices. By coordinating its actions with these goals, Nestlé hopes to increase
value for its shareholders, benefit society, and have a beneficial influence on the areas where
it conducts business.

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1.6 LOGO OF NESTLE

Figure 1 : Nestle Logo

The bird theme on the logo of the company is explained by its name, as The surname
of Henri Nestle, the founder of the company is translated as the “Small Nest”. Also the
historical coat of arms of his family depicts a bird in a nest. The Nestle bird is a blackbird of
a thrush . Next, the iconic Nestle logo with the mother bird and her two kiddies, sitting in a
nest, symbolises love and cares, showing maternal tenderness and attention. Apart from these
deep emotional meanings, the badge just depicts a feeding process and the company
specialises in food products. The bold black “Nestle” lettering was written over the nest
emblem, which was redrawn in simpler lines with fewer shadows and accents. Then, the bold
rounded typeface of the nameplate was changed to a stricter and more geometric one. The
lines were clean and straight and the cuts and serifs were distinct and confident. The whole
picture looked more modern and stylized. The wordmark got replaced and now it was set
under the image, executed in a modern custom sans-serif with the bar of the “N” elongated
and stretched above inscription, extended till the “T” and then appearing above the “E”,
making an “é”. The wordmark uses a simple sans-serif type with a recognizable “N”
character. The original emblem featured the combination of brown and white, while the
current logo may use either a grey-and-white or a black-and-white colour scheme.

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1.7 BOARD OF DIRECTOR

Figure 2 : Organisational Chart

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2.0 COMPANY REVIEW
2.1 SWOT ANALYSIS

STRENGTHS WEAKNESS
● Strategy promotion ● Price fluctuations
● Brand recognition ● Complicated promotion terms and
● Skilled workforce condition
● Customer base and loyalty ● Potential conflict between health and
● Research & Development efficient wellness
● Company always adapts the new ● High mobilisation cost
technology ● Warehouse storage problem
● Company has the ability to compete ● Less consumer research in few areas
in a dynamic environment ● Increasing instances of product
● Offering thousands of local recalls hampering brand equity
products ● Entering into markets that are
● Signifies the quality image high already mature
standard and quality product ● The distribution cost is high
● Have a very long history over 140 ● Geographic Concentration
years

OPPORTUNITIES THREATS
● Strategic partnership ● Buyer interest
● Sufficient purchasing power ● Customer privacy
● Good agricultural technique and ● Government regulation
technology ● Product description
● Raw resources are less expensive ● Increasing competition from other
● Globalisation brands
● Online Shopping ● Price
● Authentic Labelling ● Buyer power
● Establish New Joint Venture ● Product Quality
● Demand Healthier Food ● Economic Condition
● Broad Sale Channel ● Water Scarcity

2.1.1 STRENGTHS

1. Strategy promotion
Nestlé utilises integrated marketing communications to ensure a consistent
brand message across multiple channels. It combines traditional advertising methods
such as television, print, and radio with digital platforms, social media, and content
marketing. Nestlé's advertising often emphasises the quality, taste, and nutritional
benefits of its products, creating strong brand associations in the minds of consumers.
By using a mix of channels, Nestlé aims to reach a wide audience and engage
consumers effectively.
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2. Brand recognition
Nestlé offers a diverse portfolio of products across various categories,
including dairy products, chocolates, coffee, infant formula, pet food, and more. Its
extensive product range allows Nestlé to cater to a wide range of consumer needs and
preferences. By consistently delivering products of high quality and taste, Nestlé has
gained consumer trust and loyalty, further enhancing its brand recognition.

3. Skilled workforce
Nestlé implements performance management systems to assess and monitor
employee performance. The company sets clear performance expectations, establishes
individual goals, and provides regular feedback to employees. This process helps
identify areas for improvement and development, enabling employees to enhance
their skills and contribute more effectively to the organisation.

4. Customer base and loyalty

Nestlé caters to different consumer segments through its wide range of
products. The company targets individuals of various age groups, including infants,
children, adults, and seniors, offering products tailored to their specific needs. Nestlé
also considers factors such as lifestyle, dietary preferences, and cultural differences
when developing and marketing its products, ensuring relevance and appeal to
different consumer segments.

5. Research & Development efficient

Nestlé recognizes the value of intellectual property protection for its R&D
efforts. The company actively manages its intellectual property portfolio by securing
patents, trademarks, and copyrights for its innovative products, technologies, and
processes. Effective management of intellectual property safeguards Nestlé's
investments in R&D and encourages continued innovation by providing a competitive
advantage.

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6. Company always adapts the new technology

Nestlé leverages technology to optimise its supply chain and logistics

operations. This involves using advanced inventory management systems, demand
forecasting tools, and real-time tracking solutions to improve efficiency, reduce
inventory waste, and enhance visibility across the supply chain. Smart logistics
solutions can enable Nestlé to monitor and manage inventory, transportation, and
distribution more effectively.

7. Company has the ability to compete in a dynamic environment

Nestlé has a strong track record of adapting to changing consumer preferences,
market trends, and competitive landscapes. The company continually monitors market
dynamics, conducts consumer research, and adjusts its product portfolio to meet
evolving demands. Nestlé's ability to identify emerging opportunities and swiftly
respond with innovative products has allowed it to maintain a competitive edge.

8. Offering thousands of local products

Nestlé operates production facilities in different countries, allowing for local
manufacturing and production of products. This decentralised approach enables
Nestlé to produce and distribute thousands of local products efficiently. By having
manufacturing capabilities in various regions, Nestlé can respond quickly to local
market demands and ensure freshness and quality.

9. Signifies the quality image high standard and quality product

Nestlé maintains strict quality control measures throughout its operations.
From sourcing raw materials to manufacturing processes and packaging, Nestlé
adheres to rigorous quality standards. The company implements comprehensive
quality management systems and regularly conducts quality checks and audits to
ensure that its products meet or exceed regulatory requirements and consumer
expectations.

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10. Have a very long history over 140 years
Nestlé was founded in 1866 by Henri Nestlé, a Swiss pharmacist. The
company's initial focus was on the development of infant formulas to address infant
mortality and malnutrition. Henri Nestlé's invention of a nutritious infant cereal
known as "Farine lactée" laid the foundation for the company's early success.

2.1.2 WEAKNESS

1. Price fluctuations
Nestlé uses a wide range of raw materials, including agricultural commodities,
dairy, cocoa, coffee, and sugar. Fluctuations in the prices of these raw materials can
have a significant impact on Nestlé's costs and in turn of product prices. Factors such
as changes in global supply and demand, weather conditions, geopolitical events, and
currency exchange rates can influence raw material costs and lead to price
fluctuations.

2. Complicated promotion terms and condition

Promotions are subject to legal regulations and requirements imposed by local
authorities or governing bodies. To ensure compliance, companies like Nestlé often
include specific terms and conditions to address legal obligations, eligibility criteria,
and other relevant factors. These terms and conditions can sometimes be detailed and
complex due to the need to cover various legal aspects and protect both the company
and participants.

3. Potential conflict between health and wellness

Health-conscious consumers increasingly seek products that are nutritious,
wholesome, and aligned with their wellness goals. However, taste preferences,
convenience, and indulgence also play significant roles in consumer choices. Nestlé
may face conflicts between developing products with optimal nutritional value and
meeting consumer demands for taste, convenience, and enjoyment. Striking a balance
between nutritional content and consumer preferences can be challenging.

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4. High mobilisation cost
Expanding operations typically requires investment in marketing and
promotional activities to build brand awareness and attract customers. Nestlé needs to
allocate significant resources to develop marketing campaigns, advertising, product
launches, and promotional events specific to the target market. These costs can be
substantial, particularly when considering market research, advertising expenses, and
the development of localised marketing materials.

5. Warehouse storage problem

Nestlé offers a diverse range of products, including various sizes, packaging
formats, and temperature-sensitive items. Storing and handling different types of
products with varying storage requirements can be challenging. Inadequate
segregation of products, improper temperature control, or inadequate storage
conditions can impact product quality, shelf life, and storage capacity utilisation

6. Less consumer research in few areas

Nestlé, like any other multinational company, may prioritise its consumer
research efforts based on market size, growth potential, and strategic importance. As a
result, there might be regions or countries where Nestlé allocates fewer resources for
consumer research due to their relatively smaller market share or lower strategic
significance. This does not imply a complete absence of research in those areas but a
lesser emphasis compared to more significant markets.

7. Increasing instances of product recalls hampering brand equity

Recalls can lead to negative publicity and media coverage, which can damage
Nestlé's reputation. News of product recalls spreads quickly through traditional and
social media, potentially reaching a wide audience. The negative perception
associated with recalls can tarnish Nestlé's brand image and reputation, making it
more difficult to rebuild trust among consumers.

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8. Entering into markets that are already mature
Nestlé needs to carefully evaluate market dynamics, competition, and
consumer preferences. The company should focus on continuous innovation, brand
building, and understanding local market nuances to effectively penetrate and thrive
in these markets.

9. The distribution cost is high

Nestlé operates in numerous countries worldwide, and its products are
distributed across different regions and markets. Managing a global supply chain and
distribution network involves navigating various regulatory requirements, customs
procedures, and cultural differences. Coordinating logistics, transportation, and
warehousing across geographically dispersed locations can add to the complexity and
cost of distribution.

10. Geographic Concentration

Concentrating operations in specific regions makes Nestlé more vulnerable to
regional challenges such as economic fluctuations, political instability, natural
disasters, or regulatory changes. Any adverse events in those regions can significantly
impact the company's operations and financial performance.

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 2.1.3 OPPORTUNITIES

1. Strategic partnership
Nestle has already formed agreements with a number of significant
corporations like coca-cola and [Link] is just a beginning for the company. Nestle
also has a major shareholder in Loreal. As a result, Nestle has been able to enter new
markets and leverage local expertise.

2. E-commerce
The rise of e-commerce gives Nestle the opportunity to reach more consumers
and expand its distribution channels. The company can partner with e-commerce
platforms and invest in its online store to make it easier for consumers to access its
[Link] operating brand specific websites or online stores in mobile applications.
3. Good agricultural technique and technology
Nestle may provide training and support programs to farmers by helping them
adopt good agricultural practices and improve productivity. These programs often
focus on agricultural technique and [Link] also involves use of
technologies like blockchain to track the origin.

4. Raw resources are less expensive

For Malaysia, it has a lot of raw material in many places and everything is
easily accessible. Nestle took advantage of these circumstances to boost their
company in Malaysia. They can easily create their products in Malaysia due to ease
of obtaining the product. In addition, the materials are also reasonably priced
compared to other countries.

5. Globalisation
Nestle has a global footprint, with operations in more than 180 countries. The
company has established manufacturing facilities and sales channels in multiple
regions to cater to local markets. This approach allows Nestle to innovate and
introduce products with consumers in different regions.

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6. Online Shopping
Nestle has more opportunities to improve its e-commerce site and online
shopping platform such as Alibaba, Amazon and so on. A small number of CPGs
offer online services to make the shopping experience more convenient and pleasant.
Although Nestle has its online stores in several countries, expanding its online
services to more areas will prove a satisfactory result for the company.

7. Authentic Labelling
Nestle has already been criticised for providing misleading nutritional
information on its labels. So, there is an opportunity to improve its practices by
providing reliable information and labelling its products accurately such as the correct
ingredient use

8. Establish New Joint Venture

Nestle has a fantastic opportunity to grow the number of small food start-ups
under its popular brand name. Nestle can also collaborate with the new start-ups to
promote its brand name like Blue water coffee and Freshly

9. Demand Healthier Food

By improving the nutritional value of its food, the company has been able to
improve its brand image by promoting itself as a company that has an interest in
creating shared value. The company has reduced the amount of sugar in its products
by 5.1% since 2017 and empowered 83% of its affordable nutrition products to
low-income countries. This is approximately 124.6 billion servings of affordable
nutrition with micronutrient fortification.

10. Broad Sale Channel

Nestlé focuses on increasing its input into profitable ventures by conducting

extensive market research overseas to identify opportunities in profitable markets, as
well as evaluating existing ventures to identify which are profitable and which are not.

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 2.1.4 THREATS

1. Supply chain disruptions

Nestle relies on a complex global supply chain to source its ingredients and
manufacture its products. Disruptions in the supply chain such as natural disasters or
political unrest can impact a company’s ability to deliver products to consumers.

2. Customer privacy
Nestle likely has measures in place to securely store customer data using
encryption and access control to prevent unauthorised access, loss or theft of personal
information. They should clearly communicate the purpose of collecting the data and
obtain appropriate consent.

3. Government regulation
Nestle operates in many countries around the world, which means that it is
subject to various regulations. Changes in regulations such as taxes on sugar or
packaging waste reduction laws can increase costs for companies.

4. Product description
Consumers are increasingly concerned about the environmental impact of
packaging and Nestle has packing that contains more plastic. This can help towards
environmental pollution and reduce the interest of environmentally conscious
consumers.

5. Increasing competition from other brands

The pricing strategies and promotional activities also influence competition. It
is because Nestle also operates in multiple product categories including beverages,
baby food and pet [Link] may be numerous competitors offering similar
products. Local competitors can vary based on the specific regions and markets where
Nestle operates.

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6. Price
Nestlé sells most of its products through retailers, therefore price fluctuations
by retailers can negatively affect consumer confidence in the brand and improve the
position of alternative brands.

7. Buyer power
In the Malaysian market, it has a high diversity in products that offer different
benefits and features. It is difficult for Nestle to keep customers loyal to their products
because of the wide variety of products that offer different flavours that Nestle has not
yet created.

8. Product Quality
In the past Nestle has faced many negative effects on its reputation and
consumer trust after food safety non-compliance. The best example is Maggi in India,
which failed to comply with one of the laboratory tests and lost a large share of the
market.

9. Economic Condition
Nestle sales were not drastically affected during the pandemic due to panic
buying by recent events. The company's revenue is still threatened by economic
uncertainty and a downturn in global markets

10. Water Scarcity

Nestle production is highly dependent on water consumption. Accessing clean
water through cheaper sources has become difficult for companies for many reasons.
These include population growth, climate change, increased demand for food and
water, increased pollution, water wastage, and overexploitation of resources.

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 2.2 STRATEGY FORMULATION FRAMEWORK (STAGE 1)

2.2.1 IFE

IFE MATRIX

External Weight Rating Score

(a) (b) C=axb

Internal Strengths

1. Strategy promotion 0.03 2 0.06

2. Brand recognition 0.0386 2 0.0772

3. Skilled workforce 0.04 1 0.04

4. Customer base and loyalty 0.03 3 0.09

5. Research & Development efficient 0.04 1 0.04

6. Company always adapt the new technology 0.02 4 0.08

7. Company has the ability to compete in a 0.0054 3 0.0162

dynamic environment

8. Signifies the quality image high standard and 0.02 3 0.06

quality product

9. Offering thousand of local products 0.05 3 0.15

10. Have a very long history over 140 years 0.1 2 0.2

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 Internal Weaknesses

11. Price fluctuations 0.03 3 0.09

12. Complicated promotion terms and condition 0.021 3 0.063

13. Potential conflict between health and 0.03 3 0.09

wellness

14. High mobilisation cost 0.04 4 0.16

15. Warehouse storage problem 0.2 4 0.8

16. Less consumer research in few areas 0.01 3 0.03

17. Increasing instances of product recalls 0.02 3 0.06

hampering brand equality

18. Entering into market that are already mature 0.075 3 0.225

19. The distribution cost is high 0.05 3 0.15

20. Geographic concentration 0.10 3 0.3

Total
1 2.7814

21
 The IFE matrix is a strategic management tool used to evaluate the divisions' existing
position and provide future initiatives. The EFE matrix and the IF matrix, for instance, are
both continued in the IEmatrix. Each primary feature should be given a weight ranging from
0.0 (low importance) to 1.0 (great importance). Quantity conveys the significance of the
factor for a business's ability to compete in the market. The two variables will be equally
important if no weights have been assigned, which is an improbable scenario in the universe.
Each weight must add up to exactly one. With a weighted score of 0.06, Nestle demonstrates,
in accordance with the aforementioned table, that "strategy promotion" are its primary
competitive advantage. This demonstrates Nestle's most crucial component in the success of
all its goods. Additionally, 'price fluctuations' with a weight value of 0.09. As a result, Nestle
will need to make significant changes to address this weakness.

The scores in the internal matrix demonstrate how strong or weak each component of
the organisation is. The range is from 4 to 1, with 4 maybe representing a major strength, 3
possibly a moderate strength, 2 possibly a minor weakness, and 1 possibly representing a
major weakness. Only 3 & 4 (i.e., 2 & 1) points of weakness can be awarded to strengths.
Utilising the benchmarking function could substantially simplify the process of rating the IFE
matrix. The criteria like "have a very long history over 140 years” have the best strength
rating of 4 in the IFE Matrix schedule for the companies in Nestle as shown above. For rock
bottom rating, there are weaknesses such as 'price fluctuations’, ‘complicated promotion
terms and conditions’, ‘potential conflict between health and wellness’, ‘high mobilisation
cost’, ‘warehouse storage problems’ and others.

The rating was multiplied by the average load to determine the score. Each key
element needs to be ranked. The total of each individual weighted score makes up the
cumulative weighted score. The company will receive the same total score, which ranges
from 1 to 4, in both matrices. A median score is two, which sums up the results. The overall
weighting score for the Nestle group of firms is higher than the average grade 2.7814. This
indicates that the organisation's strategy is effective at grabbing opportunities or defending
itself against threats. Companies should continue to work on creating their plans and
concentrate more on ways to utilise the resources at their disposal.

22
 2.2.2 EFE

EFE MATRIX

Weight Rating Score

(a) (b) C=axb

Opportunities

1. Strategic partnership 0.06 4 0.24

2. Sufficient purchasing power 0.03 3 0.09

3. Good agriculture technique and technology 0.03 3 0.09

4. Raw resources are less expensive 0.04 3 0.12

5. Globalisation 0.06 1 0.06

6. Online shopping 0.06 1 0.06

7. Authentic labelling 0.05 2 0.10

8. Establish new joint venture 0.05 3 0.15

9. Demand healthier food 0.05 1 0.05

10. Broad sales channel 0.03 3 0.09

23
 THREATS

11. Buyer interest 0.04 4 0.16

12. Customer privacy 0.05 3 0.15

13. Government regulation 0.05 4 0.20

14. Product description 0.07 4 0.28

15. Increasing competition from other brands 0.04 1 0.04

16. Price 0.11 4 0.44

17. Buyer power 0.03 3 0.09

18. Product quality 0.03 4 0.12

19. Economic condition 0.08 3 0.24

20. Water scarcity 0.04 2 0.08

Total 1.00 2.85

24
Rating indicator:
4- Major strength
3-Minor strength
2-Minor weakness
1-Major weakness

Weighted score indicator:

Ranges from 0.00 (not important) to 1.00 (all important)

EFE is a matrix that The EFE Matrix is a strategic tool that is used to look at the
company's external environment and find possible possibilities and risks. For other
objectives, for instance, we must list, assess, and employ SWOT analysis or IE matrix. When
all of the opportunities and risks for Nestle are added together, the overall weightage score is
2.85, according to the EFE matrix. The maximum total weightage score that may be achieved
is 4.0; Nestle’s actual total weightage score is 2.85. The following weight is 1.0. The
aggregate weighted score only ranges from 1.0 to 4.0 and takes into account all opportunities
and threats. The Nestle overall weighted average score is 2.85. Additionally, if a company's
total weight score is 4, it suggests that it is operating effectively, taking advantage of
available possibilities, and reducing risk as well.

According to Nestle’s EFE matrix, The efficacy of the company's existing tactics was
indicated in the external evaluation component. The best answer, which received a score of 4,
was "strategic partnership." The rating of 3 denotes a reaction that includes "establish new
joint ventures", "sufficient purchasing power", “good agriculture technique and technology”
and “raw resources are less expensive”. The rating 2 says "water scarcity,". Threats that are
rated 1 and have poor responses from Nestle include "increasing competition from other
brands".

25
 2.2.3 Competitive Profile Matrix (CPM)

NESTLE DUTCH LADY KRAFT FOODS

Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.15 3 0.45 3 0.45 2 0.30
Domestic Market
0.05 4 0.20 4 0.20 3 0.15
Penetration
Customer Service 0.13 2 0.26 3 0.39 2 0.26
Product Variety 0.05 4 0.20 2 0.10 3 0.15
International Market
0.05 3 0.15 3 0.15 3 0.15
Penetration
Employee Dedication 0.03 2 0.06 2 0.06 3 0.09
Financial Profit 0.03 4 0.12 4 0.12 3 0.09
Customer Loyalty 0.08 4 0.32 3 0.24 3 0.24
Market Share 0.20 3 0.60 2 0.40 2 0.40
Product Quality 0.05 4 0.20 3 0.15 3 0.15
Top Management 0.06 4 0.24 3 0.18 4 0.24
Price Competitiveness 0.12 3 0.36 4 0.48 3 0.36
Totals 1.00 3.16 2.92 2.58

The Competitive Profile Matrix (CPM) analysis provides a comprehensive evaluation

of Nestlé Malaysia Berhad, Dutch Lady Malaysia and Kraft Foods Malaysia based on critical
success factors (CSFs) in the industry. The research gives each component a weight to
indicate its relative relevance and evaluates any company on a scale of 1 to 4. The
evaluations are then multiplied by the weights to provide weighted scores, which allow for a
comparison of the firms' competitive profiles.

Based on the CPM results, Nestlé emerges as the company with the highest total
weighted score of 3.16, indicating a relatively stronger competitive position. Nestlé
demonstrates notable strengths in areas such as product variety, financial profit, customer
loyalty, market share as well as product quality. These factors contribute to Nestlé's
competitive advantage and showcase its ability to meet market demands and customer
expectations effectively.

26
 Dutch Lady Malaysia closely follows Nestlé with a total weighted score of 2.92. It
demonstrates strengths in customer service, financial profit, domestic market penetration, as
well as price competitiveness. These factors contribute to Dutch Lady Malaysia’s competitive
positioning and its ability to cater to a broad customer base.

Kraft Foods Malaysia lags slightly behind with a total weighted score of 2.58. While it
shows strengths in areas such as product variety, employee dedication, as well as top
management, there are areas where improvement could enhance its competitive standing.

The CPM analysis provides useful insights into the competitive profiles of the
organisations, helping them to discover areas of strength and weakness. Companies may
improve their competitiveness and market position by exploiting their strengths, resolving
their weak spots, and strategically concentrating on crucial success elements.

27
 2.3 ACHIEVEMENTS

1. LazMall MOST POPULAR GROCERY BRAND PARTNER

Testament to Nestlé Malaysia’s position as a top brand partner regionally and its
successful collaborations with Lazada throughout the year, the Company was recognised as
LazMall’s Most Popular Grocery Brand Partner in 2022.

2. THE NESTIES 2021

In 2022, MAGGI Malaysia’s Program Mentor Wanita Cukup Berani took home an
award for the Brand PR category from among 130 submissions, highlighting its best use of
product brand in corporate communications. The Nesties is an annual global competition
where the best work of Corporate Communications teams across Nestlé markets around the
world are celebrated.

3. MALAYSIAN INTERNATIONAL HALAL SHOWCASE (MIHAS)

BEST MALAYSIAN BOOTH 2022
Shortlisted from more than 1,000 Malaysian businesses, Nestlé Malaysia was named
Best Malaysian Booth at the 18th edition of MIHAS in September 2022, through a strong
engaging multipronged brand presence showcasing Nestlé’s Halal Promise.

4. THOMSON REUTERS TOP 100 DIVERSITY & INCLUSION

INDEX 2018
Designed to transparently and objectively measure the relative performance of over
7,000 companies worldwide, the Thomson Reuters Top 100 Diversity & Inclusion Index aims
to highlight global companies that have demonstrated clear leadership in embedding
Diversity & Inclusion within their company strategy. In 2018, Nestlé Malaysia was included
in the index for the first time, ranking number 88.

28
 2.4 PROBLEMS

1. Child labour issues

In some of its cocoa supply chain, Nestle has been charged of exploiting child labour
and other forms of abuse against minors. The Fair Labour Association (FLA), an independent
auditor, said in a study that Nestle had engaged in "multiple serious violations" of the supplier
code set forth by the business itself. The code contains provisions for working conditions,
safety, and child labour.

The most crucial and expensive raw ingredient in chocolate production is cocoa.
According to earlier studies, 1.8 million kids in West Africa are at risk of maltreatment
because of hazardous child labour. What a tragedy that the children of Western Africa live in
such extreme poverty. The majority of them had to start working when they were young in
order to support their families. Some of them wind up on cocoa farms because they are in
need of employment and traffickers promise them high wages. Other youngsters are "sold" by
their own families, who are ignorant of the hazardous working conditions and the absence of
any educational opportunities, to traffickers or farm owners. Young children are frequently
kidnapped by traffickers from small communities in neighbouring African nations like
Burkina Faso and Mali, two of the world's poorest nations. The children might never see their
families again after being sent to the cocoa farms. Reporters have found youngsters as young
as five years old working on cocoa farms, although most of them are between the ages of 12
and 16. Additionally, 40% of these kids are girls; some stay for a short while, while others
stay and work on the cocoa farms until they are adults.

29
 2. Ethical and boycott issues

In 1977, the first boycott of Nestle was organised in the US. In the early 1980s, it
swept throughout the United States and then into Europe. Concerns about Nestle's
"aggressive marketing" of breast milk alternatives, particularly in developing nations, led to
this decision. Since then, the International Baby Food Action Network (IBFAN) has
continued to monitor Nestlé's and other alternative producers' business practices, leading to a
renewal of the boycott. Because they promote breast milk for newborn nourishment, the
organisers of the boycott contend that using breast milk replacements puts infants at risk for
health problems.

Since the revelations, certain institutions, colleges, and schools have also prohibited
the sale of Nestle products from their stores and vending machines. The Nestlé boycott is
supported in the UK by 73 student unions, 102 companies, 30 religious organisations, 20
health organisations, 33 consumer organisations, 18 local governments, 12 trade unions,
education organisations, 31 MPs, and numerous celebrities.

3. Raw materials and capacity planning

Although there is a fairly continuous demand for Nestle's milk products throughout
the year, milk supply varies greatly from season to season. The fact that the composition of
milk purchased from farmers fluctuates adds another layer of complexity. Nestle must
therefore manage its production capacity in the most effective manner possible in light of
both significant supply-side limitations and variations in demand. Seasonality and shifts in
product demand have also made capacity planning more challenging. For instance, the
demand for chocolate tends to rise more throughout the winter, particularly during the
Christmas and Easter holidays, and decline more frequently during the summer.

30
 2.5 CONCLUSIONS

The SWOT analysis, IFE, EFE, and Competitive Profile matrix are all significant
strategic management techniques that may assist an organisation such as Nestle Malaysia in
identifying its internal strengths, weaknesses, and external opportunities and threats. It is also
used to compare the performance of a firm to that of its competitors.
Furthermore, the SWOT analysis reveals that Nestle Malaysia has a strong presence
in every country, a diverse product portfolio that reduces operational risk, strong financial
performance, a prominent position as one of Malaysia's major business conglomerates, and
other internal company strengths. However, the firm has flaws such as difficult advertising
terms and conditions, a possible contradiction between health and wellness, high mobilisation
costs, warehouse storage issues, and a lack of consumer research in a few locations. Strategic
partnerships, adequate purchasing power, strong farming technique and technology, and so on
are examples of external opportunities. Then there are external factors such as stronger
rivalry from other brands, buyer power, product quality, economic conditions, and so on.
Then, the IFE matrix shows that Nestle's highest weighted score strengths are having
a long and strong presence in every country for over 140 years, offering thousands of local
products, customer base and loyalty while highest weighted score weaknesses are geographic
concentration, entering into market that are already mature and the distribution cost is high.
Moreover, the EFE matrix shows that Nestle's highest weighted score opportunities
are strategic partnership, raw resources are less expensive, authentic labelling and
establishing new joint ventures while its highest weighted score threats are government
regulation and product description, price, buyer power and economic condition.
Finally, the Competitive Profile Matrix shows that Nestle Malaysia key strength is its
product variety, and customer loyalty. When it is compared to Dutch lady and Kraft Foods,
Nestle is the leader mostly based on their sectors. It shows the effectiveness of Nestle
Malaysia because of their primary success factors for the organisation.
Finally, by utilising all of these frameworks, Nestle Malaysia may identify its
internal strengths and weaknesses, as well as external opportunities and dangers. It has a
competitive market position. This data may be utilised to generate new strategies for
improving firm performance and remaining competitive in the industry.

31
3.0 COMPANY STRATEGIC PLAN
3.1 STRATEGY FORMULATION (STAGE 2)

3.1.1 SPACE MATRIX

32
 The Space Matrix is a strategic management tool that helps analyse a company's
competitive position by considering its internal and external factors. When applying the
Space Matrix to Nestlé Company with an Aggressive strategic posture. It is because Nestlé
has strong internal capabilities and resources that contribute to its aggressive strategic
posture. The company has a diverse product portfolio, global presence, and extensive
distribution networks, which provide a solid foundation for aggressive market expansion.
Nestlé's brand recognition, research and development capabilities, and skilled workforce also
contribute to its aggressive stance in the market.

Nestlé operates in a highly competitive industry with constantly evolving consumer

preferences and market dynamics. However, the company has effectively positioned itself to
take advantage of opportunities and overcome threats. Nestlé's aggressive strategy aligns with
the external environment by leveraging emerging market trends, capitalising on growth
opportunities, and staying ahead of competitors through innovation and strategic partnerships.

Nestlé's aggressive strategic posture helps the company build and sustain a
competitive advantage in the market. By actively pursuing growth opportunities and
proactively responding to market changes, Nestlé can maintain market leadership, gain
market share, and outperform competitors. The company's aggressive approach allows it to
be proactive rather than reactive in its decision-making and actions.

Nestlé's aggressive strategy prioritises growth and expansion into new markets,
product categories, and consumer segments. This approach enables Nestlé to enter untapped
markets, introduce innovative products, and capture market share from competitors. By
pursuing aggressive growth initiatives, Nestlé aims to maximise its market presence and
revenue generation potential.

Overall, Nestlé's aggressive strategic posture in the Space Matrix reflects its
commitment to growth, innovation, and market dominance. The company capitalised on its
internal strengths while being responsive to external opportunities and challenges. By
adopting an aggressive approach, Nestlé aims to maintain a strong competitive position and
achieve sustainable long-term success in the dynamic consumer goods industry.

33
 3.1.2 BCG MATRIX
BCG Matrix made a significant contribution to strategic management and continues to
be an important strategic tool used by companies today. The matrix provides a composite
picture of the strategic position of each separate business within a company so that the
management can determine the strengths and needs of all sectors of the firm.

1. Stars
The stars are the high relative market share and high market growth. In the BCG
matrix of Nestle, we can see that Milo is a star product. It is because Milo has a variety of
flavours that we can consume as hot or cold beverages that most people like. The pure
chocolate taste and the price of Milo drink is also affordable compared with other similar
chocolate drinks. So, it is suitable for all generations. Milo is also easy to get everywhere like
the coffee shop or restaurant that we go to.

34
 2. Cash cows
The cash cows are those products that have high market share in a low growth market
.In the BCG Matrix of Nestle, we can see that Maggi is a product that is definitely a cash
cow. With a market share of 80-85%, Maggi has a very strong position in the market and has
high customer loyalty. While the number of repeat buyers is high in the case of Maggi, the
rate of increase among new buyers is also increasing. This product requires very little
investment to maintain its market share and fend off competition.

3. Question mark
Question marks are products that formulate a part of the industry that is still in the
development stage and yet the company has not been able to establish a significant position
in this industry. Due to the small market share that the company has achieved, the future
prospects for the product are uncertain and therefore investing in such an area is considered
a risky decision. In BCG Matrix of Nestle, we can see that Kit Kat is the question mark
product. Due to its crunchiness and superior quality, Kit Kat has an edge over its competitors.
However, due to the rise of competitors, especially Perk, Kit Kat seems to have loosened its
grip on the market and has lost some of the top recognition it previously commanded. The
brand has potential but does not have significant market share so far.

4. Dog
Products with low growth and market share and no promising growth chances are
called dogs. Management usually does not show any interest in these products and doesn’t
invest because of low chances of profit. Nestle Ice cream is the product called dog in BCG
Matrix. Nestle ice cream is a sweet food beverage with a creamy taste. Although it has a
growing market, it has been positioned as a dog due to the lack of inherent core qualities that
make it different from other brands This is the main reason why it has never been considered
as a competitor by other ice cream manufacturers and consumers

35
 3.2 STRATEGY FORMULATION (STAGE 3)
3.2.1 Quantitative Strategic Planning Matrix (QSPM)

Affordable and
Accessible Product Innovation
Nutrition
Strengths Weight AS TAS AS TAS
1 Strategy promotion 0.03 2 0.06 3 0.09
2 Brand recognition 0.04 2 0.08 2 0.08
3 Skilled workforce 0.04 1 0.04 1 0.04
4 Customer base and loyalty 0.03 3 0.09 2 0.06
5 Research & Development efficient 0.04 1 0.04 1 0.04
6 Company always adapts the new technology 0.02 4 0.08 3 0.06
7 Company has the ability to compete in a dynamic
0.02 2 0.01
environment 0.01 3
8 Offering thousands of local products 0.02 3 0.06 4 0.08
9 Signifies the quality image high standard and quality
0.15 2 0.10
product 0.05 3
10 Have a very long history over 140 years 0.10 2 0.20 2 0.20

Affordable and
Accessible Product Innovation
Nutrition
Weaknesses Weight AS TAS AS TAS
1 Price fluctuations 0.03 3 0.09 2 0.06
2 Complicated promotion terms and condition 0.02 3 0.06 2 0.04
3 Potential conflict between health and wellness 0.03 3 0.09 3 0.09
4 High mobilisation cost 0.04 4 0.16 3 0.12
5 Warehouse storage problem 0.20 4 0.80 3 0.60
6 Less consumer research in few areas 0.01 3 0.03 4 0.04
7 Increasing instances of product recalls hampering brand
0.06 4 0.08
equity 0.02 3
8 Entering into markets that are already mature 0.08 3 0.23 4 0.30
9 The distribution cost is high 0.05 3 0.15 3 0.15
10 Geographic Concentration 0.10 3 0.30 2 0.20

36
 Affordable and
Accessible Product Innovation
Nutrition
Opportunities Weight AS TAS AS TAS
1 Strategic partnership 0.06 4 0.24 3 0.18
2 Sufficient purchasing power 0.03 3 0.09 2 0.06
3 Good agricultural technique and technology 0.03 3 0.09 3 0.09
4 Raw resources are less expensive 0.04 3 0.12 4 0.16
5 Globalisation 0.06 1 0.06 3 0.18
6 Online Shopping 0.06 1 0.06 1 0.06
7 Authentic Labelling 0.05 2 0.10 1 0.05
8 Establish New Joint Venture 0.05 3 0.15 2 0.10
9 Demand Healthier Food 0.05 1 0.05 2 0.10
10 Broad Sale Channel 0.03 3 0.09 2 0.06

Affordable and
Accessible Product Innovation
Nutrition
Threats Weight AS TAS AS TAS
1 Buyer interest 0.04 4 0.16 3 0.12
2 Customer privacy 0.05 3 0.15 2 0.10
3 Government regulation 0.05 4 0.20 2 0.10
4 Product description 0.07 4 0.28 3 0.21
5 Increasing competition from other brands 0.04 1 0.04 2 0.08
6 Price 0.11 4 0.44 3 0.33
7 Buyer Power 0.03 3 0.09 2 0.06
8 Product Quality 0.03 4 0.12 2 0.06
9 Economic Condition 0.08 3 0.24 3 0.24
10 Water Scarcity 0.04 2 0.08 2 0.08
TOTALS 5.63 4.86

Table 4 : QSPM Matrix

Explanation:
Based on the QSPM matrix above, the best strategy for Nestle Malaysia to implement is
Affordable and Accessible Nutrition because it is the highest point of QSPM which is 5.63
compared to Product Innovation which is 4.86.

37
 3.3 CONCLUSION

This assists in identifying an organisation's general competitive strategy after

determining the correct posture of the organisation. As a result, the strategic emphasis of the
company is established. The top management and managers of the organisation can then
decide on the best strategy to employ in order to achieve the strategic target and goal.

As a result, we can say that the Strategic Position and Action Evaluation Matrix will
help the organisation come up with its strategic objectives and determine where it stands in
relation to its competitors.

38
4.0 STRATEGIC IMPLEMENTATION

4.1 PRODUCT INNOVATION

Nestlé focuses on continuous product innovation and renovation to meet changing

consumer preferences and needs. They invest heavily in research and development to create
new products, improve existing ones, and offer healthier choices. Nestlé's strategy includes
launching new flavours, packaging formats, healthier alternatives to cater to diverse
consumer demands and product variants to keep their offerings fresh and appealing.

Nestlé places a strong emphasis on health and wellness in its product innovation
efforts. They focus on reducing levels of salt, sugar, and unhealthy fats in their products while
increasing the use of natural ingredients and fortifying products with essential nutrients.
Nestlé aims to provide healthier choices to consumers without compromising on taste or
quality.

Nestlé is also actively working on sustainable packaging solutions to reduce the

environmental impact of its products. They are investing in research and partnerships to
develop alternative packaging materials, increase recyclability, and minimise plastic waste.
Nestlé aims to achieve 100% recyclable or reusable packaging by 2025.

Through these product innovation strategies, Nestlé aims to create products that
resonate with consumers, address their evolving needs, and contribute to a healthier and more
sustainable future.

39
 4.2 AFFORDABLE, ACCESSIBLE NUTRITION

Nestlé aims to provide affordable and accessible nutrition to consumers around the
world. The company focuses on several key areas to achieve this goal. Nestlé offers a diverse
range of products designed to meet the nutritional needs of individuals at various life stages.
They produce everything from infant formula and baby food to dairy products, cereals,
beverages, and confectionery. Nestlé aims to provide options that cater to different dietary
preferences, including vegetarian and vegan choices.

Nestlé is committed to the development of products that promote nutrition and health.
The company invests in research and development to improve the nutritional profile of their
products, reduce sugar, salt, and unhealthy fats, and fortify products with essential nutrients.
Nestlé also provides nutritional information and guidance on product packaging to help
consumers make informed choices

After that, Nestlé continually works on innovation and reformulation of their products
to improve their nutritional value without compromising taste and quality. This includes
reducing the amounts of additives, preservatives, and artificial ingredients, as well as
incorporating healthier ingredients and addressing specific dietary needs. Next, Nestlé aims
to make their products accessible and affordable to consumers worldwide. They employ
various strategies to achieve this, such as offering products at different price points, adapting
portion sizes to fit different markets, and partnering with local communities and organisations
to enhance affordability and availability in underprivileged areas.

40
 4.3 PREMIUM PRODUCTS

Nestlé offers a range of premium products across various categories to cater to

consumers who seek higher quality, unique flavours, and enhanced experiences. These
premium products are positioned at a higher price point and often feature premium
ingredients, innovative formulations, and specialised packaging.

Some examples of Nestlé's premium product offerings is Nespresso. It is Nestlé's

premium coffee brand, known for its high-quality coffee capsules and machines. Nespresso
offers a wide selection of premium coffee blends sourced from top coffee-growing regions
worldwide. The brand emphasises sustainability and provides a sophisticated coffee
experience for enthusiasts who appreciate the art of coffee-making.

Next, Perrier is Nestlé's premium sparkling mineral water brand. It offers a range of
carbonated water products sourced from natural mineral springs in France. Perrier is known
for its elegant packaging, distinctive green bottles, and refreshing taste, targeting consumers
seeking a premium alternative to regular still or sparkling water.

Häagen-Dazs is Nestlé's premium ice cream brand, known for its indulgent flavours
and high-quality ingredients. Häagen-Dazs offers a wide range of premium ice cream, gelato,
and sorbet products, often featuring gourmet flavours and innovative combinations. The
brand focuses on providing a luxurious ice cream experience for consumers who value
exceptional taste and quality.

The company recognizes the demand for elevated experiences and higher quality
products in the market and strategically develops premium offerings to cater to those
consumer preferences.

41
 4.4 CONCLUSION

In conclusion, the reason for Nestle loss is its inappropriate strategy in a few
segments. Nestle is trying to recover its market share by making a strategy in product
innovation. They invest heavily in research and development to create new products, improve
existing ones, and offer healthier choices. Strategy in price and health lifestyle nutrition offers
a diverse range of products designed to meet the nutritional needs of individuals at various
life stages and premium products. By focusing on this, Nestle has been able to maintain its
position as a leading player in the food and beverages industry.

Other companies have successfully targeted the domestic market based on their
competitive advantage as a local company. Other companies can take advantage of good
relationships with carriers, offering well-customised products at low material costs. They
have relatively high brand awareness and better distribution channels than multinational
competitors in Malaysia. The Malaysian government has developed support and investment
policies for businesses. From this, It can be a reference for the Nestle company in building a
strong market by improving the strategy in the future.

42
5.0 CONCLUSION AND RECOMMENDATION
5.1 EXPECTATION OF THE NEW STRATEGIES

Many businesses are putting more of an emphasis on sustainability, which includes

lowering carbon emissions, minimising waste, and encouraging ethical ingredient
procurement. Nestlé has previously committed to improving sustainable practices, and it's
probable that they will keep making investments in these fields. Consumer preferences for
food options that are healthier and more nourishing have been increasing since then. The
sugar and sodium content of Nestlé's products have been reduced, and the company has
increased the use of natural and organic components. This pattern is anticipated to continue,
and Nestlé is probably going to spend money on developing new, healthier goods.

Companies are putting more emphasis on digital transformation activities since

e-commerce has grown in popularity and the value of digital channels has increased. To
effectively communicate with customers, Nestlé is probably going to keep investing in
e-commerce platforms, direct-to-consumer channels, and digital marketing methods. Then,
consumers look for goods and experiences that are customised to their own preferences. In
order to better understand consumer preferences and deliver tailored solutions, Nestlé may
explore technologies and tactics to offer personalised products and packaging.

Lastly, Nestlé is well-established in many global markets. They might keep

concentrating on strengthening their presence in developing nations where the middle class is
expanding and there is more discretionary income in order to spur growth. This could entail
modifying goods to suit regional tastes and preferences or purchasing regional brands to
increase market share.

43
 5.2 RECOMMENDATIONS

For recommendation, Nestle continues to invest in research and development to drive

innovation and stay ahead of changing consumer preferences. Consumers are more concerned
about their health and well-being. There is a growing demand for nutritious and healthier
food options with a focus on reducing sugar and artificial ingredients. They are also
increasingly looking for products from companies that demonstrate sustainability, responsible
sourcing and environmentally friendly packaging. This new development also helps Nestle in
developing and creating a competitive advantage over which they will have complete control
and monitoring. With all the technology they acquired during the expansion of the market.
So, they will have access to the base to produce new technology to make their goods more
advanced.

Next, Nestle needs to further leverage digital technologies to improve operations,

enhance customer experience, and drive innovation. Invest in e-commerce capabilities,
personalised marketing, and data analytics to gain insights into consumer behaviour, optimise
product offerings, and create targeted marketing campaigns. Enhance direct communication
and engagement with consumers through social media platforms, interactive websites, and
mobile apps. Create campaigns that educate consumers about nutrition, promote healthy
lifestyles, and share the company's sustainability initiatives.

The aimed at furthering Nestlé's position as a leader in the food and beverage industry
while addressing evolving consumer preferences, sustainability challenges, and digital
transformation opportunities. It's important for Nestlé to continually assess the market
landscape and adapt strategies accordingly to stay ahead in a competitive environment.

44
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About us: Strategy at Nestlé | Nestlé. (n.d.). Nestlé.

[Link]

Awards and Achievements. (n.d.). Nestlé Malaysia.

[Link]

Nestlé - Wikipedia. (1866, January 1). Nestlé - Wikipedia.

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APPENDICES

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