MOSCU TEAM GRAND MATRIX

Area Aprox. Market share Market growth Quadrant

Beverages 27% 5,40% I
Milk 43% 3,40% IV
Prepared
Dishes 80% -0,10% IV
Health science 10% 8,70% II
Pet care 18% 5,60% II
Confectionary 14% 4,20% III
Water 12% 5,30% II

Recommended strategies by Quadrant

I II III IV
1. Market 1. Market 1. 1. Related
development development Retrenchment diversification
2. Market 2. Market 2. Related 2. Unrelated
penetration penetration diversification diversification
3. Product 3. Product 3. Unrelated 3. Joint
development development diversification ventures
4. Forward 4. Horizontal
integration integration 4. Divestiture
5. Backward
integration 5. Divestiture 5. Liquidation
6. Horizontal
integration 6. Liquidation
7. Related
diversification
 Rapid market growth

Strong Weak
Competitive Competitive
position position

Health Science

Pet Care Beverages

Water

Milk
Confectionary
Prepared Dishes

Slow market growth

  According to the matrix we recomend to take strategies for every area or divition
related to the quadrant that each one of them are located, and that kind of
strategies suggested are at the table we present before.

Below we development the QSPM based on the case of 2016

 Strategy Strategy
0 = Not applicable One Two
1 = Not attractive
horizontal
integration
expand
(acquire
internally
competitor
2 = Somewhat attractive )
3 = Reasonably attractive
4 = Highly attractive
AS
AS Ratings
Ratings
Strengths
1 Quality product distribution networks all around the world. 1 3
2 21 centers of research and development with more than 5000 employees globally. 4 3
3 Net profit increased by 2979. 3 3
4 Socially responsible company. 2 2
5 Quick and easy adaptation to the evolution of technology 2 4
6 Sales force as a major physical resource strength 2 3
7 1,1 billion in revenues in a single day 1 3
8 Free cash flow increased 52% (from 1,9M to 2,9M). 3 3
Nestlé owns more than 2000 brands globally and renovated over 8000 products for nutrition and health
4 4
9 considerations.
10 Price earning ratio of 52,55 bz. 2 4

AS
Ratings AS Ratings
Weaknesses
1 Nestlé milk always stands at last because of low advertisement. 0 1
2 Low credit sales and profit margin to retailers compared with competitors. 1 3
3 Weak promotional activities through websites. 3 4
4 Sales decreased in 5 product categories. 3 3
5 Lack of awareness among target market. 3 4
6 Revenues decreased in 3,1% respecto to the last year. 3 3
7 Unethical claims due to child labor claims in cocoa farms in Ivory Coast. 4 2
8 Mainly dependence on advertising that doesn't work 2 2
9 Removal of contaminated food. 1 3
10 Criticisms of high water consumption, sale of contaminated food and antiunionis. 2 3

AS
Ratings AS Ratings

Opportunities
1 1,1% increased in population growth rate. 2 3
2 Disposable income increased by 1,84%. 3 4
3 Hair and skin care products are the two largest revenue producing contribution to the industry. 3 3
4 Customer loyalty to the brand. 2 3
5 Cocoa prices are expected to increase more than 25%. 3 3
6 Food and beverage companies have been popular targets for activist shareholders. 3 2
7 Recognized as the largest beverage and food company in the world. 2 3
8 Use of online media. 2 4
9 5.9% growth of the retail market. 3 3
10 Business alliances with companies like Starbucks. 3 4

AS
Ratings AS Ratings

Threats
1 Increase awareness of sugars harmful effects on people. 3 2
2 Market segment growth could attract new entrants. 2 4
3 Strong advertisement from major competitors. 3 3
4 Very unstable economic and exchange rate policies that can affect production costs 3 4
5 Environmental concerns from consumers including concerns over packaging/recycling. 2 3
6 Increased trend towards healthy eating 2 4
7 Mondelez and MARS as major competitors 3 3
8 Mondelez and DEMB merged to create a company specialized in coffee 2 2
9 As a multinational, foreign-exchange rates and prices. 2 3
10 Coffee-growing regions are in parts of the world most severely affected by climate change 2 3
 horizontal
expand integration
internally (acquire
competitor)
Strengths Weight AS TAS AS TAS
Quality product distribution networks
1 0,04 1 0,04 3 0,12
all around the world.
21 centers of research and development
2 with more than 5000 employees 0,06 4 0,24 3 0,18
globally.
3 Net profit increased by 2979. 0,08 3 0,24 3 0,24
4 Socially responsible company. 0,07 2 0,14 2 0,14
Quick and easy adaptation to the
5 0,06 2 0,12 4 0,24
evolution of technology
Sales force as a major physical
6 0,04 2 0,08 3 0,12
resource strength
7 1,1 billion in revenues in a single day 0,03 1 0,03 3 0,09
Free cash flow increased 52% (from
8 0,08 3 0,24 3 0,24
1,9M to 2,9M).
Nestlé owns more than 2000 brands
globally and renovated over 8000
9 0,04 4 0,16 4 0,16
products for nutrition and health
considerations.
10 Price earning ratio of 52,55 bz. 0,05 2 0,10 4 0,20
horizontal
expand integration
internally (acquire
competitor)
Weaknesses Weight AS TAS AS TAS
Nestlé milk always stands at last
1 0,03 0 0,00 1 0,03
because of low advertisement.
Low credit sales and profit margin to
2 0,05 1 0,05 3 0,15
retailers compared with competitors.
Weak promotional activities through
3 0,04 3 0,12 4 0,16
websites.
Sales decreased in 5 product
4 0,08 3 0,24 3 0,24
categories.
Lack of awareness among target
5 0,05 3 0,15 4 0,20
market.
Revenues decreased in 3,1% respecto
6 0,05 3 0,15 3 0,15
to the last year.
Unethical claims due to child labor
7 0,05 4 0,20 2 0,10
claims in cocoa farms in Ivory Coast.
Mainly dependence on advertising that
8 0,06 2 0,12 2 0,12
doesn't work
9 Removal of contaminated food. 0,02 1 0,02 3 0,06
Criticisms of high water consumption,
10 sale of contaminated food and 0,02 2 0,04 3 0,06
antiunionis.
horizontal
expand integration
internally (acquire
competitor)
Opportunities Weight AS TAS AS TAS
1,1% increased in population growth
1 0,05 2 0,10 3 0,15
rate.
Disposable income increased by
2 0,05 3 0,15 4 0,20
1,84%.
3 Hair and skin care products are the two 0,06 3 0,18 3 0,18
largest revenue producing contribution
 to the industry.
4 Customer loyalty to the brand. 0,03 2 0,06 3 0,09
Cocoa prices are expected to increase
5 0,06 3 0,18 3 0,18
more than 25%.
Food and beverage companies have
6 been popular targets for activist 0,06 3 0,18 2 0,12
shareholders.
Recognized as the largest beverage and
7 0,03 2 0,06 3 0,09
food company in the world.
8 Use of online media. 0,03 2 0,06 4 0,12
9 5.9% growth of the retail market. 0,04 3 0,12 3 0,12
Business alliances with companies like
10 0,10 3 0,30 4 0,40
Starbucks.
horizontal
expand integration
internally (acquire
competitor)
Threats Weight AS TAS AS TAS
Increase awareness of sugars harmful
1 0,06 3 0,18 2 0,12
effects on people.
Market segment growth could attract
2 0,04 2 0,08 4 0,16
new entrants.
Strong advertisement from major
3 0,04 3 0,12 3 0,12
competitors.
Very unstable economic and exchange
4 rate policies that can affect production 0,02 3 0,06 4 0,08
costs
Environmental concerns from
5 consumers including concerns over 0,04 2 0,08 3 0,12
packaging/recycling.
6 Increased trend towards healthy eating 0,05 2 0,10 4 0,20
Mondelez and MARS as major
7 0,05 3 0,15 3 0,15
competitors
Mondelez and DEMB merged to create
8 0,11 2 0,22 2 0,22
a company specialized in coffee
As a multinational, foreign-exchange
9 0,02 2 0,04 3 0,06
rates and prices.
Coffee-growing regions are in parts of
10 the world most severely affected by 0,06 2 0,12 3 0,18
climate change
TOTALS 4,03 4,96