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MGT603 Strategic Management Assignment 2 Solution Fall 2012

The case:
Nestle is the world’s leading nutrition, health and wellness company. Its portfolio covers almost every food and beverage category – giving consumers tastier and healthier products. The group’s products included beverages, milk based products, ice creams, noodles, cerelac, chocolate & confectionaries, prepared dishes and pharmaceutical products. Nestle primarily operates in Europe, the Americas, Asia, Aceania and Africa. The group is headquartered in vevey, Switzerland and employee 283,000 people.
Nestle has number of strong points over its competitors such as brand strength, product innovation, good research and development, strong financial position, good market share and low overhead cost while in a market there are various opportunities available for them e.g. expansion, product offerings and global hub etc.
Nestle owns several different strategic business units (SBUs). One unit emphasizes on milk products and nutrition such as “milk pack”, where the firm has a large share in a market that is not growing. Another unit of Nestle produces “Mineral water”, a market that has high share while competing in a fast growing industry. Nestlé’s unit of prepared dishes and cooking aids produces “magi noodles”, where the firm has a low share in a market that is growing rapidly. Finally, Nestle makes “chocolates”, a product with low market share while competing in a mature and slow growing industry.
The requirement:
Q # 01:
Being a strategic decision maker, you are required to identify the Quadrant of the mentioned products of Nestle by using BCG matrix and also suggest appropriate strategies to the company according to selected quadrant.
(20 marks)
Q # 02:
After analyzing above mentioned information, you are required to generate at least five SO strategies. (5 marks)
Solution:


Answer 1) milk pack – cash cow ( high market share & low market growth)
mineral water – star (high market share & high market growth)
magi noodles – question mark ( low market share & high market growth)
chocolates – dog ( low market share & low market growth)

Answer 2) The 5 strategies are following:

1) The company has great brand strength in the competitors and has the opportunity to introduce new products under its brand name.

2. Product innovation

3. Good research and development

4. Strong financial position

5. Good market share

6. Low overhead cost

and opportunities are : Expansion, product offering,  global hub


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