Conducting an Internal Environment Analysis

The process of internal study is mainly based on the ways by which cost position, competency and the competitive viability of an organization can be analysed. Internal analysis is mainly built on the information which is collected with respect to the strengths, weaknesses, opportunities and threats which have been developed during the course of its operations. Internal analysis is thereby considered to be highly important for the ways by which organizations are able to develop their strategic plans and maintain sustainability in operations as well (Ferraris, Santoro & Dezi, 2017). The sustainable competitive advantage is able to play a vital part in the ways by which an organization is able to maintain a profitable position in the industry.

The internal environment of Nestle Australia can be analysed in an active way with the help of proper application of SWOT framework. This framework is able to play a key part in the ways by which Nestle aims at developing different strategies based on its growth in the industry.

Strengths – The diverse range of products which are offered by Nestle in the Australian retail industry is considered to be a major strength and is helpful un proper management of the brand as well. The organization is able to satisfy the customers with the help of different products which are able to fulfil their needs and demands. The organization also has a major focus on the research and development based activities within the industry (Hanson et al., 2016).

Weaknesses – The organization has shown a huge lack of consistency in the quality of products which are offered to the customers. Some of the poor quality based products that have been offered by the organization have faced a huge risk related to possibilities of cancer. This also has a negative effect on the consumption of the products by customers.

Opportunities – Mergers and acquisitions have been able to provide major growth based opportunities to Nestle Australia. The research and development based activities of the organization have played a key part in the ways by which Nestle Australia has been able to maintain its operations (Hill, Jones & Schilling, 2015).

Threats – The legal issues which have been faced by Nestle related to food safety have caused major issues in its operations. The rise which has taken place in the prices of raw materials have also affected the production costs. The costs based on production have further led to the increase in prices of products (Jenkins & Williamson, 2015).

Key Resources, Capabilities and Core Competencies

Tangible resources – The major resources which have been gained by Nestle Australia are based on the research and development based centres which are located in different areas. The nutritional scientists and research facilities are considered to be effective resources of the organization (Hill, Jones & Schilling, 2015).

Intangible resources – The brand value of Nestle is considered to be a major intangible resource of the company. Nestle has been able to create a future based road map in order to align the operations with objectives (Wheelen et al., 2017).

Core competencies – The core competencies of Nestle Australia are built on the ways by which the company is able to operate in the industry with the help of effective product differentiation. The competitive edge has been developed by the organization with the help of this method (Wheelen et al., 2017).

Capabilities of Nestle Australia – The levels of investment which are made by Nestle Australia in the manufacturing and research based activities are considered to be important capabilities in the food industry (Hanson et al., 2016).

Conclusion:

The analysis can be concluded by stating that internal resources which have been gained by Nestle Australia have been helpful for the organization to develop its position in the retail industry. The brand value has proved to be highly effective for the successful operations of the company.

Business level strategy is considered to be a process which is based on different actions that are taken in order to offer effective value to the customers. The development of effective competitive advantage and exploitation of the core competencies are considered to be important factors related to formation of business level strategy (Hill, Jones & Schilling, 2015). The analysis in the report will be based on the business level strategy that has been implemented by Nestle Australia in order to gain competitive advantage in the industry.

The major business level strategy which has been developed by Nestle Australia in order to focus on differentiation and leadership based on low cost leadership in some brands, operational areas and products. Another major business level strategy which has been implemented by Nestle Australia is differentiation with the help of its products. Different features which are effective in the formation of business level strategy include, pricing, labelling, quality, packaging (Nestle.com.au., 2018). For example, products like, Nestle Dolce Gusto, Nespresso and Nestle Carnation. The different brands that are offered by Nestle follow different strategies which are based on the major factors which include, creation of low-cost products that are highly efficient in nature and are able to improve the levels of communication with the consumers.

Business Level Strategy of Nestle Australia

Pros – The low cost leadership strategy has helped Nestle to gain a huge market share and customer base in the industry.

Cons – The strategy of low cost leadership has led to issues based on quality of products which are offered by the organization. For example, the issues faced by Nestle due to the ban of Maggi Noodles (Nestle.com.au., 2018).

The value chain of Nestle Australia is based on the primary and support activities which are performed in order to develop effective operations. The suppliers or the distributors of the organization are considered to be a major part of the value chain of an organization in the industry (Nestle.com.au., 2018). The knowledge is thereby transferred to the farmers which is helpful for the proper alleviation of the food value based chain. The processes which are thereby implemented by Nestle Australia are also sustainable in nature. The pressure based on cost and prices are able to affect the productivity of the members (Bhargava, Bafna & Shabarisha, 2018).

The education based programs which have been implemented by Nestle Australia are also an important part of the value chain. The government based tax and sustainability of operations is considered to be a major factor which is a part of the supply chain. The shareholders have become an important part of the operations which are conducted by the organization in an effective way (Mudambi & Puck, 2016). The value chain is considered to be a significant part of effective operations of Nestle in the industry. The company has been able to develop its place in the industry with the help of the value chain which has been created in the course of its operations in the retail industry (Engert, Rauter & Baumgartner, 2016). The employees are also able to form an important part of the value chain which has been developed by Nestle in Australia. The human resources have thereby played a key part in the ways by which Nestle has developed its brand name in the industry (Nestle.com.au., 2018).

Conclusion:

The analysis can be concluded by stating that Nestle Australia has been able to operate in a sustainable manner in the retail industry of the country with the help of its value chain. The strength of the value chain has been able to play a crucial part in the revenues and profitability. The company has thereby been able to operate profitably in the retail industry with the proper implementation of business level strategy which has provided profitability as well.

References: 

Bhargava, A., Bafna, A., & Shabarisha, N. (2018). A Review on Value Chain Analysis as a Strategic Cost Management Tool. Account and Financial Management Journal, 3(03), 1386-1393.

Engert, S., Rauter, R., & Baumgartner, R. J. (2016). Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, 2833-2850.

Ferraris, A., Santoro, G., & Dezi, L. (2017). How MNC’s subsidiaries may improve their innovative performance? The role of external sources and knowledge management capabilities. Journal of Knowledge Management, 21(3), 540-552.

Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Competitiveness and globalisation. Cengage AU.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2015). Strategic management theory. Cengage Learning.

Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis. Routledge.

Mudambi, R., & Puck, J. (2016). A global value chain analysis of the ‘regional strategy’perspective. Journal of Management Studies, 53(6), 1076-1093.

Nestle.com.au. (2018). Home. Retrieved from https://www.nestle.com.au/

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.