Strategic Management Springer Science & Business Media

Question: Describe about the Strategic Management for Springer Science Business Media. Answer: Part A Background information Nestle ice-cream is Australias one of the favourite premium brand and a true icon. Nestle combines nutrition with taste with an active imagination as they strive to innovate in order to be a dynamic company in order to cope up with changing market condition (Nestle, 2016). The company was established by Fred Peters in 1907. Management of the company is not afraid of change as they always find new ways to deliver ice-cream to customers by making use of unique know-how and latest technologies. Their success mantra is to Dive In embodies in order to satisfy needs of customers in best possible manner. Their famous ice-cream brands are Frosty Fruit, Connoisseur, Original and Drumstick. Nestle Peters is a boon for ice-cream lovers as taste provided in their products touches the heart and leaves a long lasting taste (Arbuckle, 2013). The company is expanding their business in Japan, New Zealand and in other European countries in respond to increasing demand. Ownership of a Peters Ice Cream (in individual status) in Western Australia passed as part of Peters and Brownes (PB) in 2006 to Fonterra and to Nestl in 2009. It had provided Nestl nationwide control of the brand (Nestle, 2016). Since 2012, The Peters Ice Cream business, including its Mulgrave factory, was purchased by Pacific Equity Partners with a license to manufacture sub-brands retained by Nestl, such Drumstick. Company has huge potential to expand in near future as their products are loved by the public and by considering their response to aim to make continuous improvement in it. External analysis Being an ice-cream producer, Nestle interacts in the industry which is directly affected by several external factors. These factors can be analysed by making use of PESTLE analysis. This is an effective tool to review pressure imposed by the external environment on ice-cream brand. PESTLE analysis Political factors: In Australia, there is political stability which provides Nestle major prerequisite for operating a profitable However, tax policies influence price and cost and company are required to operate by considering laws and regulations of government. Although Nestle ice-cream is a premium brand, still they are required to consider the interest of government agencies and pressure groups in their business strategies. Economic factors: The low economic growth of Australia is a significant issue for Nestle due to which they are not able to enhance sales of their ice-cream products. Company deals in premium brand while their competitors are providing their products in lower price shows disadvantage for Nestle. In addition, to this, inflation and increasing in cost fuel has enhanced the overall cost of operating activities due to which profit margin of the company is reduced. Social Factors: Over the years, consumers perception has been changing towards ice cream as they prefer healthier products along with the good taste. Thus, Nestle is required to provide ice-cream with fewer calories by reducing the use of sugar and fat ingredients (Haskelberg, Thomas Gill, 2016). In addition to this, management of Nestle ice cream is required to adopt different cultural settings to operate in an effective manner. Technological factors: Technology is constantly improving in all industries, and business is required to adopt it for survival and to attain competitive advantage. Nestle ice-cream is actively worked on innovation and new technology for better productivity and profits. Through social media, they are taking feedback from Australian consumers in order to provide better products to them. Legal factors: Nestle ice cream is required to consider changing regulations of Australia to prevent hindrances in smooth operations of business (Savio, Udell Coveney, 2013). It is because contradiction of these laws can lead to severe penalties and adverse impact on the goodwill of business. Environmental factors: Nestle ice cream is required to focus on their CSR by considering environmental concerns. For this purpose, they can use recycling strategy in packaging and use environment-friendly processes for business. Summary In accordance with the PESTLE analysis of Nestle ice cream, it can be said that company is required to modify their pricing strategies by considering the low economic growth of Australia. They should modify their business strategies by considering changing preference of customers and environment-friendly practices. They can use new technologies for production activities and strengthen their online presence. The company is required to strictly adhere food and corporate regulations to prevent hindrances in smooth operations of business. Porters 5 Model Figure 1: Porters 5 Model of Nestle Ice cream The threat of new entrants: Threat of new entrants is low in the Australian economy as consumers do not prefer new brands easily. However, expansion of foreign brands in Australia like Amul is a significant threat (Nestle, 2013). Nestle ice cream has a strong name in the market, but ice cream industry is huge and viable, so new entrants of existing brands as the potential to reduce the market share of the company. The threat of substitute goods: Threat of substitute goods is negligible as his because the product is very common for consumption. Due to this aspect, Nestle is required to innovate their products in a tremendous manner to stay in the market and reducing the threat of substitute. In this aspect, they are considering health consciousness and wellness factor in their ice cream products. Bargaining power of suppliers: Bargaining power of suppliers is moderate for Nestle as they are known for strengthening supplier relations due to their gigantic buying power (Tan, 2012). Further, quality is considered crucial aspect thus they had developed sturdy relations for further improvement in products. In addition to this, they take guidance of suppliers to operating efficiently and reduce operational costs. Bargaining power of customers: Bargaining power of consumers is high because they have various options. Due to this aspect, it is essential for the company to consider requirements and expectation of customers to make them satisfied with the quality and taste of products (Nestle, 2016). Nestle ice cream is concerned towards their customers thus they had innovated new ice-cream for individuals who are more health conscious. Competitive rivalry within the industry: Nestle ice cream has a strong position in Australia, but there is strong competition in the market. Major competitors of the company are Lion Dairy and Drinks, Tasmanian Heritage St Claire and Bulla Dairy Foods. Thus, the threat of competitive rivalry within the industry is high for Nestle ice cream. In order to remain competitive, Nestle is required to focus on innovation and technology by considering preferences of consumers. Summary Porters analysis of Nestle ice-cream shows strong marking position of the company. However, Nestle is required to innovate their products in a tremendous manner to stay in the market and reducing the threat of substitute. They are required to continue producing ice-cream having fewer calories as customers are concerned towards their health. Further, they should provide innovative flavours to remain competitive. References Books and Journals Arbuckle, W. S. (2013). Ice cream. Springer Science Business Media. Haskelberg, H., Thomas, B., Gill, T. (2016). High variation in the manufacturer-declared serving size of packaged discretionary foods in Australia. British Journal of Nutrition. 115(10), 1810-1818. Nestle, M. (2013). Today's" Eat More" Environment. In Public Affairs. Savio, S., Udell, T., Coveney, J. (2013). A survey of the reformulation of Australian child-oriented food products. BMC public health, 13(1), 1. Online Nestle. (2016). [Online]. Retrieved from https://www.nestle.com/Pages/Nestle.aspx . [Accessed on 11 December 2016]. Tan, G., (2012). Nestle Puts Australian Ice Creams Business on the Block. [Online]. Retrieved from https://blogs.wsj.com/dealjournalaustralia/2012/04/18/nestle-puts-australian-ice-creams-business-on-the-block/ . [Accessed on 11 December 2016].