Business strategy assignment 2

Unit OutcomesOutcome Evidence for the criteria Feedback Assessor’s decision Internal Verification First attempt work 3.1 Select an appropriate future strategy for a given organisation 4

Assignment Received By: Date:

BANKING ACADEMY OF VIETNAM BTEC HND IN BUSINESS (ACCOUNTING)

ASSIGNMENT COVER SHEET

NAME OF STUDENT Nguyễn Thị Kiều Anh - Snow - F05A

UNIT TITLE Unit 7 Business Strategy

ASSIGNMENT TITLE Nestle Strategic Evaluation and Implementation

NAME OF ASSESSOR PhD Pham Quoc Khanh

SUBMISSION DEADLINE 9th June 2014

I, _Nguyen Thi Kieu Anh hereby confirm that this assignment is my own work and not copied or plagiarized from any source I have referenced the sources from which information is obtained by me for this assignment.

Unit Outcomes

Outcome Evidence for the

criteria Feedback Assessor’s decision

Internal Verification

First attempt

work

3.1

Select an appropriate future strategy for a given organisation

4.1

Evaluate resource requirements to implement a new strategy for a given organisation

4.2

Discuss targets and timescales for achievement in a given organisation to monitor a given strategy.

4.3

Merit grades awarded M1 M2 M3

Distinction grades awarded D1 D2 D3

( ) Well-structured; Reference is done properly / should be done (if any)

Overall, you’ve

Areas for improvement:

ASSESSOR SIGNATURE DATE / /

NAME:

(Oral feedback was also provided)

STUDENT SIGNATURE DATE / /

NESTLÉ STRATEGIC EVALUATION AND IMPLEMENTATION

Prepared for:

Lecturer, PhD Pham Quoc KhanhUnit 7: Business Strategy Banking Academy, HanoiBTEC HND in Business (Finance)

Prepared by:

Nguyễn Thị Kiều Anh – Snow - F05ARegistration No: ITP F05-014Submission date: 9th June 2014

TABLE OF CONTENTS

EXECUTIVE SUMMARY 6

INTRODUCTION 7

CONTENTS 8

4.1 Compare the roles and responsibilities for strategy implementation 8

4.1.1 Role and responsibility for strategy implementation of Nestlé 9

4.1.2 Role and responsibility for strategy implementation of Starbucks 11

4.1.3 Conclusion 13

4.2 Evaluate resource requirements to implement a new strategy for a given organisation 14

4.2.1 Resources for each activities 14

4.2.2 Summary of resource allocation for each stages 20

4.3 Discuss targets and timescales for achievement in a given organisation to monitor a given strategy 20

4.3.1 Action plan for each department 20

4.3.2 Measurement 26

REREFENCES 27

CONCLUSION 28

EXECUTIVE SUMMARY

In the previous report, I prepared an outlines of business environment of Nestlé for thepurpose of supporting future strategy formulation and planning in this report As an assistantresearch analyst working in a team for a research firm in Vietnam My task in this report is toprovide to our team leaders on the following for the coming discussion with the client

The presentation notes are addressed on the following matter:

 Analyse possible alternative strategies relating to substantive growth, limited growth

or retrenchment

 Select an appropriate future strategy for Nestle Vietnam

A report format on the situation between Nestlé and Starbucks demand in the consumer’s

market based on the following below for the coming discussion:

 Compare the roles and responsibilities for strategy implementation in two differentorganisations (Nestle against its nearest competitor)

 Identify and evaluate resource requirements to implement a new strategy for NestleVietnam

 Discuss targets and timescales for achievement in Nestle to monitor a given strategy

INTRODUCTION

Nestlé is a multinational corporation, headquarter in Switzerland, is one of the largest foodcompany in the world Nestlé Vietnam which is established in 1992 is a member of NestléGlobal After more than 10 years operating, Nestlé Vietnam has become one of the successfulcompany in the field of beverage drink and nourishing food in Vietnam market NestléVietnam has gradually confirmed as a leading food company in Vietnam deserves to be amember of Nestlé Global One of the key factors contributing to Nestlé Vietnam success isdue to building business strategy rightly, flexibly, and determining to pursue this strategy for

a long time

In this report, I will compare the roles and responsibilities for strategy implementationbetween Nestlé and Starbucks, identify and evaluate resource requirements to implement anew strategy for Nestle Vietnam From that, discuss targets and timescales for achievement inNestle to monitor a given strategy

As to complete this report, I based on information in the Business Strategy course book andsome reference books, many sources from internet, newspapers Specifically, I would like toexpress my deep gratitude to my lecturer, PhD Pham Quoc Khanh who supports, motivates

me during the process of completing this report

CONTENTS Summary of strategy (5-year objectives, strategy and main activities)

Objective 1

Belonging to top three

leading food and

 Do market research and market segmentation

to identify new groups of customersàDeveloping new distribution channels

 Do research about Vietnamese’s tastes aboutsuccessful brand name (Nescafé, Nestea,Milo ) à Carrying on R&D activities for newflavours, added ingredients to meet moreVietnamese preference

 Do market research about customers’ demand

à Develop new promotion and advertisingplans to attract new customers (packaging size,different pricing policies…)

 Set up new production line for the bestquality of product and supply enough amount

of goods for customers demand

 Provide training farmer to supply enoughthe amount of materials Nestlé need inproduction process

4.1 Compare the roles and responsibilities for strategy implementation

Nestlé joins Vietnam market in 1992 while it was not until 2013 Starbucks joins officially intoVietnam market In Vietnam market, Nestlé launched many products with many brand name such

as Nescafé, Nestea, Maggie, Milo ; while Starbucks penetrates Vietnam market mainly byStarbucks coffee along with handcrafted beverages, non-coffee beverages, fresh foods Withdifference about joining time and range of brand products, these two companies have large gaps Insome research, it is said that Starbucks and Nestle aren’t exact competition in Vietnam Withstrategy I recommend for Nestlé in the first parts In this part, I will show differences inimplementing strategies between two companies within Vietnam market in order to clarifybetter that matter

4.1.1 Role and responsibility for strategy implementation of Nestlé

out each activities

4 large cities: Hanoi, HCM, Da Nang, Hai Phong

- Do market research to find out new potential segments in Hanoi, HCM, DaNang, Hai Phong

R&D

- Contact and arrange the meeting to discuss, negotiate and createrelationship with new potential distribution channels (retailers, wholesaledealers )

- Prepare documents and legal procedure for signing contract

Administration

Maintaining customer base and increasing number of new customers by 15%

- Conduct survey to know customer needs and wants in new areas

- Set suitable promotion campaigns (packaging size, different pricingpolicies ) for each kind of customers

- Carry out campaigns

Sale and Marketing

Setting up a new production line to provide enough amount

of goods delivering to new market

- Make a plan for buying new production (list of suppliers, cost of new

- Take agreement from mother company to invest to set up new productionline (additional capital, budget)

- Choosing a good production line

Administration

Launching new product

of Nescafé, Nestea with new flavor, added ingredients to meet Vietnamese preference

- Do research about Vietnamese’s tastes (coffee, tea) in different areas

- Generate ideas and identify goods ones

- Develop and test the new product

R&D

- Control quality of new product sampling before launching into market Quality Control

- Develop suitable and effective marketing strategy to launch new product Marketing

Double customer awareness to Nestlé product

- Provide advertising campaign such as posters, magazines, TV, internet,holding workshops to present new products and make it closer tocustomers, do charity to make beautiful image in customers’ eyes

- Customer consulting to help customers know deeply about features ofNestlé’s product so that they can exploit the its innovation in flavor, healthysafety

Sale and Marketing

Training 5,000 Vietnamese farmer to support for supplying material for Nestlé

- Research climate change (plants) and infectious diseases (animals) inVietnam to give solutions for each situation, ensure smarter use naturalresources by not wasting, not polluting, not destroying

R&D

- Take employees who were educated to support for Vietnamese farmerssteps in producing raw material (train in techniques to adapt to climatechange temperature increases and limited rainfall )

- Listen farmers’ questions and opinions to answer, assist them immediately

Human resources

4.1.2 Role and responsibility for strategy implementation of Starbucks

Overall

Objective Sub-objectives Key activities to achieve the objectives

Department to carry out each activities

At Starbucks, coffee is the heart and soul of our company

- Ensure 100% of coffee is ethically

- Commit to buying and serving high-quality coffee that is responsibly grownand ethically traded by responsible coffee purchasing practices, farmersupport, loan programs and forest conservation efforts à Starbucks believedthat it will helps foster a better future for farmers and helps mitigate theimpacts of climate change (more stable climate) for the planet (Starbucks,n.d.)

- All Starbucks coffee which is manufactured in America also ensure meetstandards for high quality before being exported into Vietnam market selling

in retail stores

- Other variety of products is ensured fresh, delicious

Administration andQuality Controldepartment

Starbucks aims for continued supply, increase mass-market reach

- Open fourth stores in Vietnam market in order to supply Vietnamesedemands in different areas with slogan “We are brewing a new store and will

be serving you soon” (all stores of Starbucks is opened at the most beautiful,expensive places in Vietnam)

- Besides selling its products through direct retail system in company-ownedstores, Starbucks also sells its products in shopping centres, has distributionagreements with office coffee suppliers, hotels and airlines (focus on luxury

R&D, Businessplanning, Sale andFinance department

- Customers is enjoyed coffee with customer target middle class to upper class(priced slightly more expensive than expected based on brand identification

- expressed ‘American dream’ toward Vietnamese) at unique and relaxing

“experience” and “atmosphere” for people to go to between home and workwith slogan “people come here for the coffee, but ambience is what makesthem want to stay” (Dang, 2013)

- Stores is decorated with main color is green and white which similar to itslogo in order to deliberately appeal to consumers who were upwardly mobileand environmentally aware (Giedt, 2012)

Sale, Marketing andDesign department

Increasing efforts to sell ready-made drinks, coffeebeans

- Making employees feel value in order to increase their performance

- Create a Starbuck community - The Starbucks marketing strategy has evenexpanded to create a community around their brand On their website,individuals are encourages to express their experiences with Starbuckshistory, and the company strives to personally join in the discussions

- Brand marketing: the Starbucks market strategy has always focus on of-mouth” advertising and letting the high quality of their products andservices speak for themselves

“word-Sale, Marketing andFinance department

- Promotion: Internal advertisements within its retail stores such as posters,new product signage and other internal means, develop its promotionthrough media, electronic media and social network (official facebook ofStarbucks and Twitter) (Moratin, 2011).

Manufacturing to distributing to retailers, wholesaledealer, large supermarkets in Vietnam (by developingdistribution channels)

Delivery products directly to each customer (by its ownstores with creating customer experiences )

Increasing sales by launching products with competitiveprices, cheap product segments )

Increasing sales by brand identification with high prices,focus on middle and upper class

Export products which is manufactured in Vietnamfactories into other countries

Import products which is manufacturing of mothercompany into Vietnam market

Developing products by enhancing variety of flavour bymodifying famous brand

Developing products by ensuring that providing 100% ofcoffee is ethically and environmentally aware

Tapping into Vietnamese resources Build demand in Vietnamese consumer market From the table above, we can clarify statement that Starbucks and Nestle aren’t exact competition in Vietnam market

4.2 Evaluate resource requirements to implement a new strategy for a given organisation

4.2.1 Resources for each activities

Stage Sub-objectives Key activities to achieve the

Do market research to find out new potential segments in Hanoi, HCM,

Da Nang, Hai Phong

Prepare documents and legal procedure for signing contract

Administration

- Human resources: Need 20 people of administration department

- Finance: This is assigned work of staffs

- Information: time to meet new potential distribution channels, terms of contract and time to sign contract

- Time: 1 month

Maintaining customer base and increasing number

Conduct survey to know customer needs and wants in new areas

Sale andMarketing

- Human resource: 3 teams (1 team to conduct marketsurvey, 1 team to plan promotion campaigns, and 1team to carry out campaigns)

of new customers

by 15%

Set suitable promotion campaigns (packaging size, different pricing policies ) for each kind of customers

Carry out campaigns

- Finance resource: about 400 million VDN for eachcampaign

- Information: lists of collected information fromsurvey

to find out customer needs and wants

- Time: 1 month to conduct survey, 1 month toprepare plans, 4 months to carry out advertising andpromotion campaign

Setting up new production line to provide enough amount of goods delivering to new market

Make a plan for buying new production (list of suppliers, cost of new production line )

Administratio

n

- Human resources: 5 people in business planning department

- Finance: This is assigned work of staffs

- Information: lists of supplier, cost of production line

- Time: 2 months

- Human resources: Business planning department

- Finance: This is assigned work of staffs

- Information: cost arising in purchase and installation process

- Time: 1 months Take agreement from mother

company to invest to set up new production line (additional capital, budget)