BUSINESS STRATEGY

BUSINESS STRATEGY
31/12/2013
Lecturer: Dr. Willibeth C. Candol
Written by: LUU NHAT HA

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Table of Contents
INTRODUCTION.........................................................................................................................2
3.1 Analyze possible alternative strategies relating to substantive growth, limited growth or
retrenchment..................................................................................................................................3
Substantive growth strategies............................................................................................3
Limited Growth Strategies.................................................................................................5
Retrenchment......................................................................................................................8
3.2 Select an appropriate future strategy for Nestle SA (Vietnam)...........................................9
Evaluation on the penetration development strategy...........................................................11
Evaluation on the market development strategy..................................................................12
Evaluation on the product development strategy.................................................................13
4.1 Compare the roles and responsibilities for strategy implementation in two different
organizations (Nestle against its nearest competitor)...............................................................14
4.2 Identify and evaluate resource requirements to implement a new strategy for Nestle
Vietnam.........................................................................................................................................21
Finance......................................................................................................................................21
Labor.........................................................................................................................................22
Material.....................................................................................................................................22
Technology................................................................................................................................23
4.3

Discuss targets and timescales for achievement in Nestle to monitor a given strategy
24

CONCLUSION............................................................................................................................29
REFERENCE:.............................................................................................................................30

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INTRODUCTION
Nestle Nutritional Foods is a leading food brand in the world with criteria bring nutritional food
source for the best health and happy life for everyone. Nestls products are always towards to
the best quality and to meet the demand for consumers in every age, gender, work situation....
Although Nestle is taking part in the global competitive market fiercely as well as the pressure of
aptitude products, but companies need to examine the factors inside and outside as well as the
current business situation with the aim of assessing the ability of these strategies through
identifying the strengths and weaknesses of the company. From there, it can help Nestle
understand more about how to put Nestls products into new markets, especially Vietnam, and
meet the elements of the economy.

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3.1 Analyze possible alternative strategies relating to substantive growth, limited growth or
retrenchment.
There are three types of alternative strategies can be applied to business are substantive growth,
limited growth and retrenchment strategies. Nestle can learn and use appropriate strategies to
maintain the best ranking in the nutritional food industry as well as support the development of
Nestle in the future. Thus, before making a suitable strategy for Nestle, I will analyze more
clearly on three alternative strategies for Nestle plans in the future.
Substantive growth strategies
The understanding of the importance of business growth is a necessity for businesses. Businesses
need have to identify development opportunities to become a famous brand and unique as well as
to ensure the sustainable development of enterprises in the future. Substantive growth can be
accomplished through the acquisition of operations, mergers, self-development with the available
resources. They depend on the market, technology, and financial capability. Substantive growth
is implemented through the options following:

Horizontal integration: It is a merger between two companies produce and compete in

the same product line, in the same market. If companies adopt this strategy, the growth
rate can be achieved by extending the internal or external expansion through mergers and
acquisitions of companies providing similar products, in collaboration with the link
reasonable diversification. It will be a huge advantage to grow market share and reduce

competition in the market by applying this strategy.

For Nestle, in 2002, Nestle merged with Dreyer Company in manufacturing ice cream in
the U.S. and acquired the company Chef America, Inc. with $ 2.6 billion. In January
2006, Nestle has completely owned company, Dreyer, and since then the company
became the largest ice cream producer in the world with 17.5% market share.
Source: website Nestle S.A

Vertical integration: When businesses choose to expand by acquiring or taking multiple

stages in the supply. Producer will own suppliers and its distributors. It helps companies
improve efficiency and reduce costs.

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For Nestle, to be able to bring a taste of the most delicious coffee, Nestle has provided a
wide range of Grand Cru coffees, coffee machine, and personal services through the
coffee shop. Since then, Nestle has been operating in the premium segment portioned
coffee worldwide, serving customers in nearly 60 countries. In addition, to ensure the
Nestle food gives consumers adequate nutrition, Nestle has a scientific and the Health
including medical nutrition business of the company, mainly supplying products six areas
to support primary health care, including aging care, critical care, diabetes, obesity,
cancer and pediatric.
Source: website Nestle S.A

Unrelated diversification: The company expanded its business into a new area that is

not related to the brand, product or market current of company.

For Nestle, Nestle began diversifying product when starting shareholding in L'Oral in
1974. Nestl holds 26.4% stake in the company L'Oral, the leading cosmetics company
in the world. Laboratoires Inneov is joint venture project about nutritional cosmetics
between Nestl and L'Oral. Galderma is a joint-venture project in the field of
dermatology different between Nestl and L'Oral. Other projects include Cereal Partners
Worldwide (with General Mills), Beverage Partners Worldwide (Coca-Cola), and Dairy
Partners Americas (with Fonterra).
Source: website Nestle S.A

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Therefore, the substantive growth strategy will have advantages and disadvantages.
Advantages
- Nestle will achieve high growth rate, large-scale and better when faced with

competition.
Nestle improve and enhance product quality thanks to the application of modern

technology production.
Besides, from the buy and hold shares of other companies in the same industry, It

helped Nestle to expand market share and increase market efficiency.

The use of diversification, Nestle can enhance brand, engage and try to produce brand

new products.
Disadvantages
- It can cause high risks and affect the current market share.
- It requires a lot of time and cost for machinery, equipment, materials and staff salaries
-

for more.
When inflation and the crisis is happening and growing, Nestle does not necessarily

engage in new markets or new areas.

Limited Growth Strategies
Limited growth options: include market penetration, market development, and product
development.

Market penetration: is a strategy to grow the same product of the company in the same
market. The only way to gain more market share with the same product in the same
market is to attract competitors customers and get more loyal customers by marketing
strategies, advertising strategies, promotions, open more selling points to increase sales.
(Source: businessdictionary.com). Therefore, Nestle to invest in advertising through
media such as newspapers, television, Internet.... It often helps the company maintain or
increase market share, dominance safety, increase the use of existing customers and
market restructuring. For Nestle Vietnam, Nestle Vietnam implementing market entry
strategies through specific marketing strategies as:

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Advertising: TV programs and newspapers advert of Nescafe, Nestea, Bear milk, Milo ... Sponsorship of television programs, music programs, sports tournaments. Organizing workshops
about public health nutrition; nutrition advice for growing children. (Bear milk, cereal).
Organizing activities to introduce product outdoors: product introductions trial to schools or
supermarkets (sour milk, pasteurized milk, Milo, Maggi, Nescafe...). Implementation of
promotion program like gift Milo, Nestea...
Advantages:
-

The great population of Asia (especially is Viet Nam) somehow provides a huge

amount of potential customers for Nestle.

This strategy will help Nestle sustain and increase the market share of present

products.
Creating competitive advantages (different high technologies, etc.) to challenge
potential competitors.

Disadvantages:
-

Nestle faced with competitors like Starbucks and PepsiCo, Inc. ... in Vietnam market.
It takes time to adapt Nestle, access to customers and find out consumer demand in new

markets.
If the world economy is crisis, not boost sales or promotions not attract customers in new

markets lead to a loss for Nestle.

In addition, Nestle may be obsolete by the use of promotional measures more is focused

on production of new products.

Market Development: is the name given to a growth strategy where the business sells
existing products into new markets. Is the process by which the firm seeks new markets
for its current products? There are many possible approaches: new geographical areas,
different package sizes, new distribution channels, differential pricing policies, new
market segments. (Source: Business Environment course book, p161) For Nestle
Vietnam, The Companys products have been launched two markets of Vietnam is two
big cities such as Hanoi and Ho Chi Minh City. Through strategic market development,
the company has gradually built distribution systems and retail systems on the entire
Vietnam. In 1998, Nestle Vietnam only nine distributors including six distributors in Ho

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Chi Minh City and Hanoi, currently has 120 distributors across the provinces and cities in
the country.
Advantages:
-

New geographical area, the Asian market is booming and this market brings enormous

revenue for Nestle.

It requires Nestle to spend the finance resource that is not too large.
Nestle has a larger market and more customers, increase sales, and promote the
development of the company in the future.

Disadvantages:
-

When Nestle implement market development strategies, they takes time to have the
strategy performed because Nestle need to have the permission of each government in
their new market shares before investing. Moreover, they have to research new markets

and a lot of risk in the marker.

Nestle have to understand and meet the needs of customers in new markets.
Spending more money on research and provide new products to compete with rivals in

new markets.
Nestls profits may go down due to the negative change of currency exchange rates and

political situation
Product Development: offering new products to existing markets and increasing the
product's features such as improved design and packed to launch product to the market.
Example: Ever since commercial operation in 1997, Nestle Vietnam market constantly
making new products like these Milo, Nescafe, Maggi sauce, Maggi Number powder,
yogurt ...Most of the new products in recent years of the company. It is products
manufactured according to Vietnam from the origin products of Nestle worldwide.
Research Center and development of Nestle launched the new products to serve to
affiliates of Nestle worldwide. And based on the results of this research and the
information market, the product development department of Nestle Vietnam adjustments
from the original recipe of products to suit the tastes, habits, preferences of consumers in
Vietnam.... Frequent changes related to packaging, packaging, creating new flavors and
ingredients. It is suitable for the living conditions of the people of Vietnam
Advantage
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-

Nestle always make new and improved products to create differentiate and attract

customers in the current market. It helps Nestle gain much market share
Nestle has many advantages with strong financial resources to support R&D department
Nestle has many advantages over the competition.

Disadvantage:
-

Nestle would have cost a lot of money for advertising new products to attract the

attention of customers.
Nestle will face high risks, if Nestle does not succeed in producing a new product or not

collected revenue from new products.

Nestle takes much cost analysis and market research before the implementation of

strategies.
Retrenchment
This strategy can bring stability to the company. The company has cut employees, cut spending
when companies realize that they are not strong enough to compete with other competitors.
There are three types of cutting strategies that Nestle could make to their company:

Cut-off labor: Nestle will cut unnecessary spending and labor when Nestle took profits

and their share in the market.

Divestment: Nestle may sell or liquidate part of the assets of the company or a large

department.
Liquidation: this is considered to be the most difficult because Nestle could lose assets. It
leads to serious consequences for the employees that they will lose their jobs. Moreover,
it lost the opportunity that Nestle pursue in the future.

Advantage:

Reduction strategies can help save money over Nestle to focus on their core

competencies.
Nestle will stabilize the financial problems.

Disadvantage:
-

Nestle faced with financial and resource distribution in the company when Nestle cut

costs and resources.

Lack of staff leads to a decrease in production efficiency profits will decrease.
Nestle caused high unemployment rates.

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-

Liquidation can cause serious consequences like bankruptcy.

After analyzing the advantages and disadvantages of each strategy, I think Nestle should
choose limited growth strategies. It fits with the current business situation and business
development activities in the future of Nestle. Thus, Nestle needs to focus on improving product
quality; diversifying business activities and increase efforts to attract customers using advertising
tools to develop new products and services for customers know the new products easily.

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3.2 Select an appropriate future strategy for Nestle SA (Vietnam)
Based on the advantages and disadvantages analyzed alternative strategies for Nestle, Nestle
should be carefully analyzed to select an appropriate strategy for the company. In particular,
limited growth strategy is considered appropriate and at least pose a risk. This strategy promotes
the available resources and capabilities of Nestle. In addition, product development and market
development is feasible to Nestle have many opportunities to expand new markets, enhance
brand and business development objectives, vision and mission that Nestle has put place. Nestle
can evaluate three strategies of limited growth through Ansoff Matrix (not including the
diversification strategy). Since then, the management of Nestle can make the right decision to
become a Nestle brand leading food nutrition world, especially to overcome the competition in
Vietnam market as Starbucks.

There are three main factors to help Nestle evaluate strategic is: suitability, feasibility and
acceptability to stakeholders (SFA).

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Evaluation on the penetration development strategy

Suitability

This strategy is appropriate for Nestle to develop because it based on the strengths, weaknesses,
opportunities, threats of Nestle to fit the missions and the capabilities. Thus, Nestle wants to
develop a sustainable business activity in Vietnam. Nestle to overcome the great competitor and
also is expanding market share to Vietnam as Starbucks. To be able to successfully compete and
do master Vietnam market, Nestle need to make a difference, market research and find out the
basic needs of the people of Vietnam to be changed accordingly. Nestle must have technology
development, brand and products closer to consumers through advertising, promotions. For
example, Nestle has links with the National Nutrition Institute to open and operate health care
services to the consumer, or consulting services, customer care. (Source: Nestle)

Feasibility

Apply penetrating the market has highly feasible for Nestle. Nestle has resources such as capital,
labor, modern technology and are in stable condition. Besides, Nestle has providers available and
the long term in the market the Vietnam as coffee farms in the Central Highlands. Nestle signed a
contract with the supplier to ensure that materials are purchased in large numbers, high quality
and reasonable price. Nestls human resources are carefully selected. Employees have
knowledge and experience, professional training suit each location. They are talented, energetic,
creative, enthusiastic and responsible job. On the other hand, Nestle organize training programs
for staff to develop their skills.

Acceptability

This is a strategic interest of the shareholders and the stakeholders because they can achieve
more profit from this strategy. Or is this strategy can spend money on advertising, marketing to
attract customers. Moreover, this strategy is less risky for Nestle. It focuses on the current market
and the customer of Nestle desire many change to choose. Besides, Nestle will be allowed to
expand market share in Vietnam if Nestle comply with laws and government regulations such as
labor law, environmental policy, etc.

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Evaluation on the market development strategy

Suitability

The Asian market is a huge potential for Nestle, especially Vietnam. Nestle is trying to introduce
existing products to new markets. Although, it is more risky than the market penetration strategy,
but it can be an opportunity for Nestle to make more profit because many Asian countries have a
stable political situation and GDP figures such as Vietnam, Singapore, Myanmar, etc.. Vietnam's
population is quite high, this is a great opportunity and potential for market growth and increased
profitability at Nestle Vietnam.

Feasibility

Nestle has built a strong workforce of market research from many different countries come with
different cultures . In addition, Nestle also has a chain of reputable providers, quality and longterm. Nestle support for cultivation at coffee farms and dairy farms .... Besides, Nestle also
open more branches or retail stores so that customers can easily find and buy Nestle products.

Acceptability

For investors and shareholders, they are always interested in the company's profits, and they
want to get higher returns from this market. If Nestle succeeded in developing markets, they will
be more profitable. Moreover, customers also play an important role in this strategy, they will
decide the success of this strategy and profitable for Nestle or not. Shareholders and investors
will continue to invest in building more branches worldwide. when expand business into new
markets, Nestle must comply with the rules and regulations of the countries where they operate
as the law of environmental protection policies, taxation and consumer protection. These rules do
not cause difficulties for Nestle because they have a lot of experience in operations in many
countries around the world.

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Evaluation on the product development strategy

Suitability

This strategy is an appropriate strategy for the current operations of Nestle. Applying this
strategy, Nestle need to update the market trends to improve and develop new products to meet
market demand. During development, continuous innovation and Nestle launched the new
product line to meet the needs and accordance with the consumer. In addition, Nestle has always
focused on the application of technology, the most modern techniques to make products with the
highest standards to bring satisfaction for consumer products. With strategic bring nutritious food
sources and healthy consumers, Nestl provides nutritious foods such as milk, nutrition flour
and confectionery for children.

Feasibility

Nestle has huge financial resources and human resources to implement the strategic plan of
services and product development. Technology is an important part of the R & D of Nestle.
Nestle has engineers working in R & D in many areas - from packaging equipment, food
processing technology and production of new beverage systems such as Nespresso, Nescafe
Dolce Gusto, especially. T&BabyNes. Together with the engineers, food scientists Nestle
developed processes and technologies that enable the development of safe, nutritious food and
beverages in order to bring the most delicious taste of Nestle food.

Acceptability

This strategy is also affecting sales of the company as well as the interests of stakeholders. Nestle
can expand the market share with new segments to serve the needs of our customers. It is not
easy to anticipate customer's needs, so Nestle should have more specific strategies for
advertising, promoting. If these products can meet the needs of customers, they will get more
belief and the number of products sold increased as well as profit from higher sales.
Consequently, stakeholders will have more profit and they will accept this strategy. More
importantly, Nestle need create strong relationships and long-term supplier. It ensures adequate
supply of raw materials to manufacture new products....

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Recommendation: Through the analysis and evaluation of three factors as Suitability,
Feasibility and Acceptability to stakeholders. Nest can see that Market development,
products development strategy are good choice. It can increase the reputation and
competitive advantages of the company. Moreover, with this strategy, Nestle can use
maximize resources of company. Therefore, this is a good strategy for development of the
company in the future.
4.1 Compare the roles and responsibilities for strategy implementation in two different
organizations (Nestle against its nearest competitor)
Each company has different strategies for their business activities, including Nestle. Moreover, to
achieve objectives and effectively manage a business, Nestle needs to define the role and clear
responsibilities for each department of the company. Following are the roles and responsibilities
in each department of Nestl to ensure success strategy selected.

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Role

Human

Human resources play a very important role for the development of a company.
Therefore, Nestle needed to maintain stability human resource. Nestle need to

Resources
Department

recruit effective human resource for the company, from which provides and
competency assessment of each employee, then

company arrange human

resources in the appropriate position for each plan in order to maximize

profitability and ensure

future

for Nestle. Nestls staffs have to meet the

expectations of the customer to ensure the long-term goals for the company.
Responsibility
All responsibility is to ensure that Nestle to achieve their business goals through:
Recruitment and training of staff professional development more, Nestle to comply
with labor laws, paid to employees based on labor law, to ensure that staff can
develop through wages, health care, equal treatment, and morality with staff.
Besides, creating a pleasant working environment, effective and providing training
professional programs for staff. On the other hand, Nestle needs to build a specific
work plan to create a balance between needs and resources to reduce stress among
employees. Taking advantage of available qualified human resources in the
company to keep objectives cost less.

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Role

Financial
Department

The finance department is an important department in a company. For Nestle, too,

all the profits, cost, and debt will be finance department controlled and measured
through financial statements. In addition, this department can be adjusted cash
flow and raise capital for investment activities and business of Nestle. Besides, the
finance department also created good working relationships with other
departments within the company to run the company efficiently.
Responsibility
The finance department is responsible for some certain of activities:
The finance department should ensure that salaries and bonuses for staff, pay bills,
pay dividends to shareholders must be paid on time. On the other hand, this
department is responsible for monitoring the changes in business conditions and
forecast performance indicators such as sales revenue or cost of Nestls
investment as well as analysis of credit risk and interest profits to invest in new
markets. Moreover, the finance department have to ensure the operational budget
of the other parts, then, internal communications and make forecasts about future
budgets for other departments

Marketing

Role

Department

To reach out to customers effectively, bring in revenue, and profit for the company,
Nestle must have marketing departments. The marketing department will
represents for company create a relationships and good image in consumers'
hearts. This department play a role search new market has the potential to expand
the business. Then, it has to research, analyze, and survey the needs of customers
to produce new products. Moreover, this department needs to work with other
departments to identify potential as well as the target market.

Responsibility

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There are some marketing aspects that this department strongly takes responsibility
for:
Nestle needs to build a strong brand and reputation with customers by advertising
products on television and newspapers and hired an advertising agency to do the
project, to get the best professional results. The marketing department shall have to
research the market and considering the attitude of customers with products of
Nestle, from which, change or create new ideas and unique products to attract
more customers than competitors. It is responsible for supporting the efforts of the
sales department. Furthermore, the marketing department needs to invest strongly
in advertising campaigns or promotion program. Besides, it must build a clear
distribution system for customers to buy products more easily and provide
consulting services for product and health care for consumers.

Manufacturing Role
Department

Ensure market demand by producing high quality products as well as ensuring

input materials and the quality of the product in output. That is a process of
product manufacturing and this department has role to control the production
process without incident occurs or delayed.
Responsibility
Production department is responsible for research new or modifying existing
products. Setting standards and goals for each department of the production
process and check each stage of production of products and raw materials for the
manufacturing process. After that, the department must ensure and certainly that
all products must be standards before launching into the market. All products must
meet the requirements as: No products recall, Quality, High satisfy

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This section will compare the roles and responsibilities of the department in Nestle and
Starbucks.

Slogan

Mission

Good Food, Good Life " is the Mission: to inspire and nurture the human
mission statement of Nestle in 2013. spirit one person, one cup and one
With this mission, Nestle provide neighborhood at a time.
consumers with the best tasting, most
nutritious choices in a wide range of
food and beverage categories and

Establish

Starbucks

as

the

premier

purveyor of the finest coffee in the world

eating occasions, from morning to

night. (Nestle, n.d.).
Nestle was producing nutritious food
with great taste and reasonable price
but is produced in standard and
conditions the best. The company
designed specifically for products in
accordance with needs of local.
Nestle ensures that the product will
always be in the right place and the
right time.

Nestl opens for staff not only an Starbucks

is

looking

for

staff

can

opportunity for attractive jobs but communicate in two languages, English

also a lot of professional development and Vietnamese, have great passion in
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opportunities

long-term

and business always learn and meet customer

abundance.
Human resources
Department

needs, all staff must be linked together.

Activity in the area associated with

the essential needs of human beings,
so that Nestl is a company built on a
foundation very cloning. At Nestl,
human is central to the success of the
company. Nestle interested in their
staff on all aspects, to help them
develop a better way and try to bring
them the most practical benefits.

Listen and communicate well with other

members inside and outside Starbucks,
creating a teamwork environment friendly
and

efficient.

And

most

importantly,

employees must have the spirit of learning

and responsibility towards work. Starbuck
create career development opportunities in
a professional way. Starbucks will help
employees go on the road to developing a
sustainable career.

Source: website Nestle

Source: website Starbuck

Nestle need to study and find out The company focuses on its initial products
gather

and

consumers.

information
Also,

find

from include good coffee, quality of service and

out

the create a friendly atmosphere while in

competitors and the fluctuation is Starbuck.

going on in the market.

Social Media Strategy of Starbuck was

Nestle need to analyze the strengths built on the website including Twitter,
and weaknesses their products and Facebook, Youtube. Starbuck always create
Marketing
Department

proposed a new marketing strategy.

new ideas.

Moreover, during the crisis period of Starbuck nurture current relationships of

the global financial, Nestle also them. This ensures customers will continue
influenced.

Therefore,

businesses to support the brand in long time.

need marketing strategies with the

lowest cost but the best effective as
media, newspapers, the Internet....
On the other hand, Nestle should
organize events to promote the brand
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Starbuck has promotions such as "buy 1 get

1 free" attract a large number of customers
for Starbucks.
http://www.digitalsparkmarketing.com/c
reative-marketing/socialPage 19

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and image to customer

media/starbucks-marketing/

At Nestle, Nestle comply with the Starbuck's products concocted according to

Manufacturing
Department

strict requirements of the production preferences of customer. Since the process

process. Build trust by providing of finding the best material resources until
products and services accordance process of Coffee making implemented
with expectations and preferences of carefully and detailed. Each step is
consumers. Nestle commitment to important in determining the taste of
good quality and safe product for coffee. Starbucks have to bring satisfaction
consumers is a top priority of Nestl.

to customers.

To achieve this, Nestl has built 17

leading research centers in the world,
and a staff and engineers of Nestl
constantly research can be applied the
development of technologies into
improve

products,

products,

develop

contributes

create

new
to

sustainable competitive advantage for

the company, To confirm the trust of
consumers.

4.2 Identify and evaluate resource requirements to implement a new strategy for Nestle
Vietnam.
Nestle should assess resource requirements carefully. This will help the company understand the
situation and their capacity. There are four types of resources; it needed for Nestle really can

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meet the goals that they have set up an efficient manner as Finance, Labor, materials, and
technology.
Finance
Financial resources are evaluating the strength of the fastest time and the ability to apply new
strategies. It is an important factor indispensable and should be investment such as product
development, service and market development. When Nestle wanted to implement the new
strategy is to expand new markets, Nestle should have strong financial resources to cover
expenses and provide a new strategy. If finances of Nestle are not big enough to invest, this can
cause high risk for business operations of the company. Therefore, Nestle need to control and
balance the financial situation in order to maintain the company's activities take place smoothly.
They should check on the balance sheet assets and liabilities, bank loans and cash flow. The
financial situation of Nestle, net profit was up CHF 1.1 billion to CHF 10.6 billion, and earnings
per share were up 12.2% reported to CHF 3.33. Underlying earnings per share in constant
currencies were up 7.5%. Nestle increased operating cash flow by CHF 5.6 billion to CHF 15.8
billion, reflecting primarily a substantial improvement in working capital. The strong operating
cash flow, the Groups financial net debt increased from CHF 14.3 billion to CHF 18.2 billion,
with the dividend of CHF 6.2 billion, capital expenditure of CHF 5.4 billion, and the CHF 10.8
billion acquisition of Wyeth Nutrition being the main contributors. The Groups return on
invested capital was 14.1% including goodwill and 30.2% excluding goodwill. The board is
proposing a dividend of CHF 2.05 per share, up from CHF 1.95 in 2011.For decades; Nestl has
had consistent, stable, and accelerated growth in overall turnover. In terms of current
performance, the year 2001 was once again a record year for sales, net profits and dividends to
shareholders, with CHF 84.7 billion in sales, CHF 6 681 million in net profit and 4.4 % real
internal growth. Source: 2012 Nestls annual report. Hopefully this number will go a good
way in the future. With these favorable conditions, Nestle can buy high quality raw materials;
improve services and investment to build new branches as well as new distribution channels.
Labor
Human resources play a very important role in the implementation as well as success strategies.
Human resource is considered a property of Nestle. Recruit and retain talent is the biggest
challenge of the organization. In Asia, especially Vietnam, here is a large potential market for
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human resources. Nestle company with over 280,000 employees from 100 different countries
working in 449 branches in 83 countries, more than one third (33.9%) of the workforce is located
in Europe, 38 % in the Americas and 28.1% in Asia, Oceania and Africa. Culturally unified
everyone on all continents should, therefore, forces personnel from the different cultures of
Nestle have created strength to compete with other companies in the industry. Nestle by the
ability of human resource management; the company has created for the favorite staff work,
which constantly devoted to the future of the organization. Nestle confirms that an employee of
Nestle "you are working in a global environment". Nestle always have the long-term investments
in training and professional development for staff to have the opportunity to do a better job and
higher income. With the principle and its business culture, Nestle used human potential in a safe
working environment, fair, their opinions are heard and the ability to work is highly appreciated.
In addition to an abundance of human resources and capacity to work, Nestle has always had the
policy of recruitment and training through its own training program at the University of Nestle. It
is what the above has helped the company obtain a competitive advantage, a barrier for
competitors in the same industry Nestle. (Nestle. nd)
The human resource of Nestle will contribute an essential part to helps market
development strategy of Nestle carry out easily, This helps Nestle completed their
mission is to bring good nutrition food source for health of consumers
Material
The selection of materials is a very important issue in the product development process.
Therefore, Nestle always choose materials for their products carefully. Company to strengthen
relationships with their suppliers locally and overseas. Currently, Nestle has signed many
contracts with suppliers to ensure the large quantities material. Moreover, Nestle need to keep
their relationship with the supplier in a long time. On the other hand, Nestle is also suppliers
specializing in the manufacture of their own products. Nestl is the world's leading companies in
nutrition, health, and healthy living. Statistics 2010, Nestl has 233 factory, 17 research centers
and development are located in all continents with branches in most countries of the world.
Nestl produces about 10,000 kinds of products. The spread that helped Nestl access to
customer needs, from creating products that best meet consumers needs. It is a great result from

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the tireless efforts of the group through a long-term business process to achieve a global system
that competitor can not easily overcome. (Nestle. nd)
Technology
Technology is one of the important things that help to develop quality products. Technological
environment include elements such as innovation, research and technological development, new
equipment. It is a major impact on the method of marketing and advertising for Nestle. Nestle
may have significantly changed their operating strategy when changing technological
environment. If Nestle focus on developing and innovative environmental technologies, Nestle
will increase product quality, less expensive costs, higher productivity and gain more profit
because of customers will choose products high quality.
Example: Today, with a network of 17 research centers across the globe and Development on 4
continents, Nestl is proud to be a group have capable research on food and nutrition the largest
in food industry world. Nestls Research Center is a center of scientific research in the field of
food and nutrition leading the world. This center has built a solid foundation of scientific
knowledge, the knowledge accumulated to support the business activities of Nestl. Its success is
tied to bring consumers the best products. Despite the world economic situation of the past there
are many difficulties and severely affected from the crisis but Nestl continues to invest in
research and product development. Nestle has ranked in the top 100 and is the leader in invention
patent for the food industry and beverage. Nestle hosted more than 250 patents each year and
manages a portfolio of more than 200,000 patents worldwide. With the motto "Scientific research
to meet a better nutrition," Nestl has always believed that the research helps bring more quality
product than to help people have a better life. (Nestle. nd)
Besides, technology support for Nestle with after-sales service to customers through e-mail,
Facebook, Twitter, YouTube, Instagram and customers can be easy to find the informations
Nestle through the social media high technology.
4.3 Discuss targets and timescales for achievement in Nestle to monitor a given strategy
Market development and product development is considered to be the most appropriate strategy
for survival and development for Nestle. Therefore, Nestle need to set targets and timeframes to

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ensure effective and successful strategy. It includes plans for short and long term. I will provide
specific information to develop, market development and provides rankings for each plan.
In short term plan:
Objective
Key activity
Action required

Increase market share in new target markets in Vietnam at the end of 2014.
Research, strategic planning and implementation of marketing strategies
Research needs customer and new product innovation at targeted markets
in Vietnam
Introduction and contribute new ideas to improve product marketing
strategy.
Collect and opinion survey and feedback from customers for new products
on the website, phone, e-mail or company.
Subscribe and find out the competitors in the same industry in Vietnam.
Planning for new target markets in Vietnam.

Expected results

Evaluation of the process and results of the implementation strategy.

Increasing the number of loyal customers in Vietnam market.
There is enough information about the needs of customers and competitors

Schedule
Resource

in Vietnam market.
A year (from January 2014 to December 2014)
The annual financial statements of the company.

requirements

There is full information of competitors, including financial reports,

SWOT analysis and so on.

Funding resources
Monitoring

Collect customer information in awareness, behavior and so on.

Owner capital, retained earnings
Feedback from customers.
The annual report of the company.

Code
A

Action
Research needs customer and new product innovation

Timescale
January

at targeted markets in Vietnam

Introduction and contribute new ideas to improve

January to February

product marketing strategy.

Collect and opinion survey and feedback from March

customers for new

Establish and implement planning for new target

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markets in Vietnam.
Subscribe and find out the competitors in the same

industry in Vietnam.
Evaluation of the

process

and

results

of

November
the December

implementation strategy.

Grant chart
Action
Jan
required
A
B
C
D
E
F

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Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

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BUSINESS STRATEGY

In long term plan:

Objective

Become the company leading food nutrition in new markets.

Key activity

Maintain and increase sales

Open more and more distribution channels as well as branches

Action required

around the world.

Research and survey information about new markets.
Determine target markets and marketing plan.
Identify and plan for the target market.
Identifying the factors can avoid the competition and the potential
value of the competitors.
Expanding retailers and agents in new market
Recruitment, training skills as well as their experience for local staff.
Establish good relationships with partners in Vietnam markets

Expected results

Creating customer belief and attract more and more loyal customers.
Increasing market share in Vietnam markets.

Schedule
Resource

Open retailers and resellers in Vietnam market

10 years (from 2014 to 2024)
Staff are trained

requirements

An abundant financial resources and stability for Nestle

Some activities for Nestle such as investment, construction of branch

Funding resources

distribution channels as well as, wages, etc.

Owner capital
Investment

Monitoring

Retained earning
Feedback from customers, managers, and employees.
Good relationship with the government in Vietnam markets.

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Code
A

Action
Research and survey information about new markets.

Timescale
2014

Determine target markets and marketing plan.

2015

Identify and plan for the target market.

2015 - 2016

Identifying the factors can avoid the competition and the

potential value of the competitors.

2017 - 2018

Expanding retailers and agents in new market

2019 - 2024

Recruitment, training skills as well as their experience for

local staff.

Establish good relationships with partners in Vietnam

markets

2021 - 2022

Creating customer belief and attract more and more loyal

customers.

2019 - 2020

2022 - 2023

Collecting customers feedbacks

2023 2024

Summarizing feedbacks, making assessments and Reports.

2024

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Grant chart for long term:

Action
required

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

A
B
C
D
E
F
G
H
I
K

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CONCLUSION
This report will help Nestle can identify and assess resource needs to implement new strategies
to achieve these goals in the future. This requires a concentration of three factors - suitable,
feasible and acceptable strategy. Moreover, in the process of expansion and investment, Nestle
have to political analysis, legal, technology, and environmental technology to understand the
market and the economy. It helps Nestle makes good business activities and maintain a
competitive advantage with other competitors. Nestle to invest in new market with opportunities
and challenges. Therefore, Nestle should be marketing strategy or manufacturing strategy is good
to attract and create trust with customers. Finally, set goals and specific timeframes to help
Nestle can be controlled and timely strategic planning if the problem changes.

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