Running Head: Swot Analysis 1

SWOT ANALYSIS OF NESTLE

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Dated

16-09-2024
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SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT analysis is a

technique for assessing these four aspects of your business. SWOT Analysis is a tool that can help you to

analyze what your company does best now, and to devise a successful strategy for the future. As a manager,

your role in any strategic planning is likely to involve providing operational data to help assess the internal

capabilities, and (depending on your job function) you may also be asked to provide market intelligence. The

completion of a SWOT analysis should help you to decide which market segments offer you the best

opportunities for success and profitable growth over the life cycle of your product or service. The SWOT

analysis is a popular and versatile tool, but it involves a lot of subjective decision making at each stage. It

should always be used as a guide rather than as a prescription and it is an iterative process. There is no such

thing as a definitive SWOT for any particular organization because the strengths, weaknesses, opportunities,

and threats depend to a large extent on the business objective under consideration.

1. Strength

A strength is something that has a positive implication. It adds value, or offers your organization a

competitive advantage. Strengths include tangible assets such as available capital, equipment, credit,

established and loyal customers, existing channels of distribution, copyrighted materials, patents,

information and processing systems, and other valuable resources. You may want to look at and evaluate

your strengths by function, for example marketing, finance, production, and support. Looking at things in

this way can make it easier to identify the positive attributes within each function.

The sort of questions you can ask to ascertain your strengths are:

● What do we do well?

● What qualities or aspects persuaded our customers to choose our product or service?

● What resources do we have at our disposal?

● What do others see as our strengths?

● What areas are we seen as being expert in?

● What advantages do we have over our competition?

However you judge the responses to these questions it must be from the perspective of your operating

environment and not from an internal aspect. For example, if ‘guaranteed next day delivery’ is the norm

within your industry then this cannot really be considered a strength because your customers would expect

it. On the other hand, if ‘guaranteed next day delivery’ is not normal in your industry then it could

legitimately be classified as a strength.

 Nestle is one of the most critical foods and beverage companies globally, with a long history and strong

business in more than 186 countries.

 Products are highly diversified, with the most well-known and popular brands. Its subsidiaries have

advantages over competitors. People are familiar with Nestlé’s products and have been using the

products for several generations.

 With a natural growth rate of 3.6 percent in 2020, the highest in the last five years, the country has

strong financial capacity.

 In several countries, Nestle have built solid working relationships with well-known retailers and

suppliers.

 The powerful R & D department is committed to developing environmental protection products. Up to

293 factories have attained pollution-free status. At the same time, according to the environmental

protection

2. Weakness

These are the characteristics of your product or service that are detrimental to growth. Weaknesses are

those things that detract from the value of your offering or place you at a disadvantage when compared with

your competitors.
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Factors that are identified as weaknesses can often be remedied with suitable investment or

restructuring. In the example above, it might be possible to relocate the business or set up a distribution center

in the south of the country, but both of these things would require changes to the way the business currently

operates.

The type of questions you would be asking and discussing to identify your weaknesses are:

 What can be improved or altered?

 What do we do badly?

 How do we compare with others?

 How does our performance compare with our competitors?

 What have our customers told us?

 How did we respond to this feedback?

 What should we avoid?

 How do third parties judge our performance or service?

 Have we self-imposed any constraints?

Some products have bad reputation problems in manufacturing and advertising. For example, some infant

milk powder in China includes excessive arsenic, a California company is suspected of illegal water use

and anti-union sentiment, and some developing-country suppliers exploit child labor. These have caused

harmful public praise, which indicates that the legal department has weaknesses in not taking the

appropriate measures.

Highly dependent on advertising to promote their products and compete with competitors, which leads to

expensive marketing costs.

Mislabeling products in the past has led to people losing confidence in Nestlé’s products and losing

essential market shares, such as India and China.

Lack of visibility as a responsible and environmentally friendly company.

Some goods have excessive amounts of sugar and sodium, which contradicts the company's health image.
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The more accurately you identify your weaknesses, the more valuable the SWOT analysis will be.

However, because weaknesses are by definition internal there can be a lot of resistance to admitting to them. In

fact, highlighting weaknesses can be synonymous with drawing attention to areas of the organization which

have been badly managed or where poor decisions have been made. This can make it very difficult to talk about

weaknesses objectively if you want to keep your job.

3. Opportunities

Opportunities can occur for a variety of reasons and may result from changes within the market, customer

lifestyle changes, and advances in technology, new production methods, etc.

These opportunities for growth can also occur from a resolution of a problem associated with your current

product. For example, Skoda’s market share rose considerably once its cars were known to be reliable.

Successful organizations are constantly reviewing their market and services to see how they can increase their

market share. Opportunities have a wide variety of origins as shown in the diagram above.

With the expansion of digital media, e-commerce sales accounted for 8.5% of the total amount in 2019,

with a growth rate of 18.5%.

Although Zone Asia, Oceania, and Sub-Saharan Africa have the lowest overall turnover they have

enormous potential and a high number of growing economies. Nestle can increase its market penetration

in AOA countries and regain people's trust.

To promote the new face of Nestle and participate in environmental sustainability, form collaborations

with strategic ecological companies such as NGO protection international.

Preference for pre-packaged food is a recent trend, and individuals choose functional food due to longer

working hours. This category's overall sales rose steadily from fifth place in 2018 to fourth place in

2020.

Strengthen relationships with retailers to promote healthy eating.

New trends: environmental and social awareness.

4. Threats

The final part of the SWOT process involves assessing the external risks your organization Faces. These are

referred to as threats and are made up of external factors that are beyond your control. Even though they are

external, which means that you have little or no control over them, your organization should consider making

contingency plans, no matter how sketchy. This will ensure that you are not taken completely by surprise, but

perhaps more importantly, it can put items ‘on the agenda’ for discussion that people may be more comfortable

ignoring. The greater your ability to identify potential threats the more proactive you will be able to be in your

planning for and responding to such events. Anticipating and responding to your competitors’ actions is one of

the biggest challenges your organization has to face and clearly indicates the need for gathering good market

intelligence.

Changes in
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People are paying more attention to the composition of items due to the new healthy lifestyle, which may

Damage Nestlé’s sales because the key ingredients in most products are artificial.

Many retailers are producing their own products. Nestle is facing new rivals in terms of pricing and

retailer strategic positioning.

Because of the changed work habits, individuals are spending less time at home, which implies there is

less time for the demand for specific Nestle items.

Rising prices of raw materials, such as coffee beans.

Customer loyalty is declining, and people prefer price to brand. Some Nestle products have lost

popularity in recent years as a result of fierce competition, particularly in dairy products.