MANAGEMENT THEORY AND PRACTICE

1. Every major strategic decision is made after accessing one’s capabilities and position in
the environment where the decision will have a significant impact. The assessment helps
one to make an informed decision and be better prepared for any contingencies.
SWOT is an acronym for Strengths, Weakness, Opportunity and Threats. It helps us to
understand one’s internal capabilities and external positions. Internal capabilities include
the Strengths and Weaknesses, whereas the opportunities and threats determine external
positions.
The simplicity of the SWOT is its more comfortable to apply to everything that is
influenced by internal and external factors. It can be used in situations, industries,
activities, products, businesses, strategies, products, and even people.
Strengths and opportunities bring in a positive impact and determine one’s core
competencies and help in expanding. Weaknesses and threats, on the other hand, are
detrimental to one’s growth.
Nestle India Ltd, is one the biggest players in the FMCG segment,and has its presence in
milk & nutrition, beverages, prepared dishes & cooking aids & chocolate &
confectionery segments. The company is engaged in the food business.

Strengths of Nestle
Nestle’s continuous presence over the years is attributable to numerous internal factors.
These factors form the strengths of the Nestle group, and here I will be taking you
through what are the strengths of Nestle briefly:
● Global Presence: Nestle’s active presence in 187 countries is advantageous to its
undivided growth. The presence in some countries is over 150 years, establishing the
brand in the local environment. This means that their product is available to the people
in these many countries, and it creates a long-lasting impact on people as well.
● Strong Supply Chain operations: The nestle group encourages innovations at the local
levels, incorporates technology and is increasing the traceability of the sources of the
raw materials of its products. This enables the group to achieve substantial operational
efficiencies.
● Fast Innovation: Application of science across all platforms and innovating through
collaboration with the local players allows Nestle to innovate faster and according to
local demands.
● Digital Transformation: Nestle’s investment in digital transformation across fields like
marketing, social media, e-commerce, manufacturing and supply chain has helped
them become data-driven. This enables them to personalize their consumer’s needs
and achieve higher satisfaction.
Weaknesses of Nestle
Nestle core competencies lie in its strengths, but the global giant also faces numerous
internal weaknesses. Here, we can easily understand what are the weaknesses of Nestle:
● Problems in product marketing: Nestle has time and again faced a massive backlash
from people across the globe for not correctly positioning and marketing their
products. One classic example is the marketing of breastfeeding baby formula to
people in poorer nations. Uneducated mothers were using the product with
contaminated water, causing high cases of sickness from the same.
 ● Organizational Structure: Nestle’s current organizational structure is divided based on
its product portfolio and not based on its geographical operations. This creates a vast
power distance when it comes to decision making and prevents agility in operations.
In expanding its operations, this always proves to be a major hurdle.
● High dependence on advertising: Nestle is majorly dependent on advertising to
promote its products; it increases the marketing costs and consequently, a high risk
associated with the returns. With disruptions coming up, this strategy will not sustain
Nestle in the long run.
Opportunities of Nestle
The dynamic environment is now more connected than ever. It provides numerous
opportunities for the group to thrive and grow. I have listed some of them for your
understanding:
● Increasing Transparency: The present consumer holds more information than ever.
With the growing presence on the internet, it will be favorable to increase
transparency. Increasing transparency would mean that the consumer knows where the
raw materials are sourced from, when they are sourced and who sourced them. The
consumer feels more connected and is trusting the brand more.
● Sustainability: Integration and operating sustainably will help the group to reduce
costs, increase efficiency and utilize labor properly. Local integration and production
will make operations lean, which will reduce long term expenses.
● Increasing disposable Income: Increase in the average household income in Asia,
Oceania and Sub-Saharan regions is an excellent opportunity for Nestle to expand its
operations. Introduction of new or existing products can be taken up to increase its
product portfolio and hence increased presence and profits.
● Diversifying its product portfolios: Nestle has a great opportunity in introducing
products into sectors other than food and beverages. Merging through strategic
alliances can help Nestle to diversify and tap into markets other than food and
beverages.

Threats to Nestle
The same dynamic environment provides numerous threats owing to its ever-changing
environment. Frequent disruptions, emerging technology and continuous innovations
drive the changes. Nestle, to sustain has to focus on these parameters to grow
continuously:
● Climate Impact: Changes in the climate and its subsequent impact can be seen on
numerous Nestle product’s raw materials. Raw materials like coffee, wheat and dairy
are affected by climate change. They are highly likely to affect Nestle’s growth over a
while.
● Strategic Investment choices: Investment choice’s failure to align with such a diverse
product run group is exceptionally high. The group runs a higher risk of losing brand
presence and a potential sum of money.
● Product Quality and Safety: Nestle, in the past, faced many negative effects on its
reputation and consumer trust after non-compliance of food safety. The best example
is of Maggi in India, which failed to comply with one of the laboratory tests and lost a
massive share in the market.
 ● Rising Competition: Nestle’s product portfolio competes with various multinational
players and numerous local players. With the advent of more technology and constant
disruptions in the industry, nestle is always at a risk of losing its existing consumer

Nestle group’s ever-growing product portfolio and its global presence are attributed to
their focus on its core strengths and its alignment with the opportunities available. At the
same time, Nestle’s focus on threats and has to work on its weaknesses to tackle every
change in the environment.

Resources:
Nestle: Nestle.com
https://www.capitalmarket.com/Company-Information/Information/About-Company/Nestle-Indi
a-Ltd/175

2. The Just-In-Time (JIT) concept is a manufacturing workflow methodology aimed at

reducing flow times and costs within production systems and the distribution of
materials.
Lean production is a production methodology focused on eliminating waste, where
waste is defined as anything that does not add value for the customer. Lean
manufacturing takes the concept of JIT and reexamines it in the light of customer value.
The first step in the lean manufacturing process is to consider what the real value of your
product is for the customer. For instance, if your customer is buying a stereo speaker, he
might be looking for sound quality, durability and affordability. The first principle of lean
manufacturing is that every step in the production process must add something of value
that the customer actually wants. Another difference between just-in-time and lean
manufacturing processes is how they view the production process.

JIT was designed for processes that delivered one specific item with few variations.
Therefore, the manufacturing processes and employee skill sets tend to be more rigid.
Lean offers more flexibility, emphasizing the production of larger or smaller amounts
depending on fluctuating market needs. Consequently, manufacturing equipment needs to
be flexible enough, so companies do not have to invest in specialized devices every time
they want to launch a new product. Also, employees must have a comprehensive view of
the organization. Whereas shop floor workers only interact with factory equipment and
workers, lean employees collaborate with individuals, marketing managers, and other
positions inside and outside the plant walls.

JIT fits with customers that want the lowest price. But in other instances, consumers
value other qualities, such as higher durability. With lean manufacturing, a supplier
examines its manufacturing processes in search of ways to lengthen the product lifetime.
For instance, they select a higher cost, longer-lasting element to make the product and
meet those customer expectations.
 MG Motors should combine both JIT and Lean production to reduce both time and
wastage in the production system towards bettering their efficiency. JIT and Lean
Production are the most frequently used systems to regulate production and ensure
profitability. They are different but share common ground in terms of their applications in
the automotive industry. JIT (Just-in-Time) is based on production efficiency, while lean
production focuses on utilizing efficiency to increase value for the product end-user. MG
Motors can apply both systems separately or jointly to reduce waste and increase value in
production for the customers. JIT can be used to eliminate waste accumulation in
excessive inventory. The company can also apply Lean production across various
departments, including manufacturing, marketing, and distribution, to boost the
company’s performance in the Indian market. Both systems have shown positive
outcomes in the automotive industry, and the company can succeed in its application to
overcome the challenges.

3. A. Lemon Tree Hotels, the country's largest mid-priced hotel chain, reported an 80 per
cent drop in its cash profit to Rs 9.5 crore in the January to March quarter as compared to
Rs 48 crore in Q4 FY19. Revenue from operations went up 17 per cent to Rs 176 crore in
Q4 FY20 from Rs 150 crore in the same quarter of previous fiscal, but total expenses too,
increased by over 10 per cent to Rs 112 crore from Rs 102 crore.
The nationwide lockdown and the government's requirement that hotels not overcrowd
are affecting the lemon tree hotel line during this epidemic. Hotels are only permitted to
admit a limited number of people, not as previously, to preserve the social distance
guideline.
Political forces that affect lemon tree hotel line during this pandemic are the nationwide
lockdown and the perseverance of the government for hotels not to overcrowd; therefore
they are only allowed to admit a certain number but not as before to maintain the social
distancing rule.
Economic force that affects Lemon tree line of hotels at this time during pandemic is that
due to low customer numbers, the benefits of the business have dropped hugely and they
have had to reduce some workers which in turn lead to slow services as the number of
employees has reduced.
Social forces that have affected the Lemon tree are the fears of many people who have
been contracting the virus. Many people have stopped visiting the hotel premises since
hotels always have a lot of traffic of people coming from different places which people
fear makes the hotels a hotspot for the contraction of the virus.

3. B Steps to a contingency approach of Modern approach for Lemon Tree Hotel in order
to face the pandemic effectively are:
● Coordinate your response
Consider setting up a dedicated team, reporting to senior management, to take
responsibility for assessing and managing the potential impact of Covid-19 (and the steps
put in place by relevant Governments and authorities to deal with it).
● Manage the impact on the workforce
Employers will need to comply with health and safety duties and broader duties of care
and good faith owed to workers.
● Manage contractual risks
Evaluate the potential implications for your customer and supply chain contracts. Review
how Covid-19 will affect your ability to perform your contractual obligations (either
directly or due to issues in your supply chain). Assess what rights you might have if your
counterparty is unable to perform.
● Manage financial arrangements
Borrower and lenders may need to review finance documentation and related
arrangements to assess potential consequences and contingency measures. 5. Consider
insolvency risks
Consider your financial position and that of any contractual counterparties, in particular:
● Any concerns about the solvency position of any counterparties. What would be the
impact on your business if they were to enter into an insolvency proceeding and cease to
trade? Will they be able to continue to perform if their own supply chains are disrupted?
If there are concerns then consider:
○ Finding alternative suppliers.
○ Tightening credit terms and including retention of title clauses until payment has
been made.
○ Renewed efforts to collect any payment arrears.

● Maintain appropriate data and documents

Ensure compliance with relevant data protection legislation. Document decisions and
steps taken in response to the outbreak, for example where this may be necessary to
comply (or evidence compliance) with contractual or legal/regulatory obligations or
helpful in the event of possible future disputes (whether arising under contracts or
otherwise).
● Consider potential insurance claims
Consider whether the consequences of any business interruption can be claimed under
existing insurance policies, and discuss with brokers any need for cover on specific new
exposures. In particular:
● Review existing cover, especially business interruption insurance and “credit insurance”,
if any. For instance, existing cover may provide for “loss of use” of premises due to
contamination or payment protection in the event that a debtor becomes insolvent and
unable to pay. There may also be specific requirements in relation to unoccupied
premises. Check terms for notice periods and other formal requirements.
● Stay up to date on your rights and obligations
Ensure that the team leading the response keeps up to date with the evolving situation:
● Comply with current legal obligations and guidance: many aspects of your response will
be informed by your legal and regulatory obligations in each relevant jurisdiction and by
guidance already given by relevant authorities. It is important that your response team has
a good understanding of those obligations and ensures compliance with them.