Nestle Space Matrix

Financial Strength
1. Nestles net sales increased by 20% in 2009 as compared to 2008
2. Net profit increased by 94% in 2009 as compared to 2008
3. Debt equity ratio changes from 63:37 to 66:34
4. Price earnings ratio in 2009 was 18.8 as compared to 2008 38.9
5. Return on capital employed increases by 40%
Industry Strength
1. Increase in consumer food industry by 14%
2. All companies contribute only 6% to processed milk market
3. Market segment growth has attracted new entrants to increase profit potential
4. Due to ease of entry in market, Engro foods, Shezand foods and Shakarganj are
properly utilizing their resources

3
5
3
5
4
20
5
4
5
4
18

Competitive Advantage
1. Nestle enjoys strong customer loyalty
2. Quality product distribution networks in country
3. Nestle extended product life cycle is being ensured due to quality brand extension
strategy
4. Nestle product are market leaders in many product categories
Environmental Stability
1. Economic slowdown can lower the demand
2. Fluctuating rate of inflation in the country
3. Price range of competing products
1) Average FS= +20/5 = +4 3) Average IS= +18/4= +4.5
2) Average CA= -7/4 = -1.75 4) Average ES = -5/3 = -1.67
X= CA+IS= (-1.75)+(+4.5)= +2.75
Y= FS+ES = (+4)+(-1.67) = +2.33

-2
-1
-2
-2
-7
-2
-2
-1
-5