Report On Internal and External Factors of Nestle and Comparison With Unilever
Report On Internal and External Factors of Nestle and Comparison With Unilever
By
An internship report submitted to the BRAC Business School in partial fulfillment of the
requirements for the degree of
Masters of Business Administration (MBA)
1. The internship report submitted is my/our own original work while completing degree at
Brac University.
2. The report does not contain material previously published or written by a third party, except
3. The report does not contain material which has been accepted, or submitted, for any other
___________________________________________
Shaikh Afnan Birahim
Student ID: 17264040
___________________________________________
Dr. Salehuddin Ahmed
Professor, BRAC Business School
BRAC University
2
Letter of Transmittal
Subject: Submission of case study report on Internal and External factors of Nestle and
Comparison with Unilever.
Dear Sir,
I’m very glad for submitting my case study report on Internal and External factors of Nestle and
Comparison with Unilever. As it is an important part of MBA degree requirement, I have included
all the knowledge which I have gained from doing MBA courses in this case study. I tried my best
to prepare this case study report though had to face various challenges and obstacles while making
this case study report.
I would like to heartily thank my supervisor for guiding me to prepare the case study report.
Without your guidance it would be very hard to successfully complete this report. Hence, I hope
you will appreciate the information that I have provided in the report. However, this report shows
some limitation because of the shortage of time duration. Please inform me if you have any
inquiries about the report, I am glad to provide you any help to clarify on my report.
Sincerely yours,
Shaikh Afnan Birahim
ID: 17264040
BRAC Business School
BRAC University
Date: 19 September, 2020
3
Acknowledgement
First of all, I would like to thank Almighty Allah for giving me the strength and will power for
I am very much thankful for the help given by my Academic Supervisor Dr. Salehuddin Ahmed
who guided me while preparing the case study report. Without his help it would have been
Furthermore, my thanking goes to Syed M. Alamgir, who helped me with information so that
I would also like to thank Arifur Rahman Khan, for explaining me different parts of the case
study.
Lastly, I would like to thank my friends Omar Saad, Akef Mozid, Sumona Akter, Nishat Jahan,
Sanjana Shahjahan, Shayeda Afsar Moumita and Bantee Rahman for helping me with different
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Executive Summary
In the food sector, Nestle is the largest company and also in terms of growth and revenue. It is
also a very trusted brand name and people use its products undoubtedly. Nestle continuously
is innovating through its R&D department to make new and attractive products. This paper
discusses the history of Nestle Bangladesh, its products and services, marketing strategies,
general management and financial management. Also, Nestle’s growth compared to Unilever’s
growth is compared as well as the comparison between Nestle and Unilever’s management is
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Table of Contents
Declaration…………………………………………………………………………………...2
Acknowledgement .................................................................................................................... 4
Chapter 1 Introduction............................................................................................................ 7
Chapter 8 Conclusion……………………………………………………………………….57
References ............................................................................................................................... 58
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Chapter 1
Introduction
Nestle is one of the most famous Multi-National Companies of the whole world. It’s very
famous for its variety of foods and drinks. In fact, it’s the world’s largest company if it’s
considered from the side of food and beverage. It’s also the largest food company if measured
It’s main headquarter is in Vevey, Switzerland. Nestle is one of the most trusted names in the
industry of high-quality food products. Nestle has a variety ranges of products such as tea,
juices, cereals, baby foods, chocolates, dairy products, sports nutrition etc. From the beginning,
In 1992 Nestle started its operations on Bangladesh. Its one and only factory is located in
Sreepur of Gazipur. At 1998, Nestle S. A’s full subsidiary became Nestle Banlgadesh.
650 people work in Nestle Bangladesh. Other than that, another 1000 people are recruited by
Nestle’s suppliers and distributors. The products which gets the most sells in Banlgadesh are
Nescafe, Nido, Maggi, Maggi soup, Koko krunch and corn flakes cereals, coffee-mate and
many others.
Nestle is situated all around the world. All parts of nutrition such as infant formula, milk
products, culinary products, frozen foods, sports drinks etc. are covered by Nestle.
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1.2 Product and Services
From the last 20 years, Nestle has given various types of products and services to the people
of all ages of Bangladesh. Nestle has helped people take care of themselves and also their
family members. Nestle has also engaged themselves deeply with the communities where
they function. They have ensured high quality training of the farmers and thus enhancing
livelihoods of the people they work with. Nestle is also educating children with their families
No.
2. NIDO FortiGrow
3. Maggi Shaad-e-Magic
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4. Beverages 1. Nescafe Classic
2. Nescafe 3in1
3. Nestle Coffeemate
4. Nestea
2. Nestle Milo
2. Lactogen
3. Nan
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1.3 Nestle Bangladesh Competitor Analysis
Nestle is still in its development stage in Bangladesh. So, its still facing competition from
other companies. Some of the companies it’s facing competition alongside their products are:
BRAC (Aarong)
Pran (Mr.Noodles)
Ispahani (Tea)
Kellogs (Cereal)
By observing carefully and through consumer feedback, the main culinary competition Nestle
Bangladesh is facing from Mama Noodles and Knorr Soup. Although its true that Maggi is the
most popular noodles and most people grew up eating it, many people say that its taste is not
quite up to the mark. Maggi provides with all the necessary nutrition, but the consumer wants
something tastier. Similar thing can be said about Maggi Soup. But Maggi is leading if seen
from the view of market share. Munch rolls are considered cheap but people still prefer Kitkat
which is priced higher. Kitkat is a nestle product but not made in Bangladesh. Kitkat is available
is available in the smallest shops but munch rolls are not. Many people questioned the quality
of chocolate in munch rolls because of its cheap price. It’s quite clear that people of low income
In breakfast cereals, Kellogg’s is a renowned name. Nestle cereals are quickly bought because
of their small size compared to Kellogg’s. But there is no complain about the taste. If we look
into baby food, we can see that cerelac is no.1 compared to other baby foods. And we can see
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that Nescafe too is no.1 in terms of other coffee brands. Consumers claim that NIDO is a bit
expensive compared to other powdered milk brands. It’s been also called unhealthy and it was
quite controversial. So, people prefer Diploma, Red Cow over NIDO.
Mission
Nestle’s tagline/mission statement is “Good food, Good life”. Nestle Bangladesh’s mission is
also aligned to it. Its mission is to be the whole world’s best nutrition leading, wellness and
health company. Nestle wants to claim this by making tasty, healthy foods and drinks. They
create this food for any time (day and night) and for any occasions.
Vision
The vision of Nestle is to be a leader in nutrition, health and wellness through improving the
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Nestle Bangladesh’s Vision
Nestle Bangladesh’s Vision is to be the leading food and beverage company of Bangladesh. It
wants to be so by creating sustainable and profitable growth and continuously improving results
Nestle is currently working a lot for the development of rural areas. This is in alignment with
Nestle’s global creating shared value model. For other projects taken by Nestle are:
Thus Nestle puts ethical business practices guided by corporate principles. And through this
The proposed vision statement of Nestle Bangladesh is to be the best food and beverage
company of Bangladesh. And by doing this it will also ensure health and wellness alongside
profitability and growth. Any multinational companies’ main goal is to increase shareholders
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share price. Nestle Bangladesh’s main goal is also the same. Nestle Bangladesh’s another aim
is to target suppliers selling targeted products. Nestle tries it best to make its vision real.
The main tagline “Good food, Good life” is also same for Nestle Bangladesh. Its mission is to
produce various foods that can be eaten through morning to night. And, the foods and beverages
Chapter 2
For the developed countries, external factors are much more important in role than internal
Political Factors
Government intervention can easily affect the production of any company. Because of
government policy and its changes, many problems can arise like bottlenecks.
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Nestle has to also follow the food standards and other regulations set by the Government.
If they don’t follow this, Government will intervene and thus it will not be a positive thing for
Nestle.
Economic Factors
Rate of Inflation
In 2019, the inflation rate in Bangladesh was almost 5.6% [2]. So, if it increases it will also
The GDP growth of the fiscal year of 2017-2018 of Bangladesh was 7.9%. Nestle productivity
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Social factors
Consciousness of health
In present world people are being more and more health conscious. Nestle knows this and they
are trying to make their products healthier. Different elements of health are added to the Nestle
products.
Quality of work life is fast and getting better and better in the 21st century. Also, every MNC
is trying its best to offer high quality standards that are adaptive to the modern world.
Technological Factors
In the present world everything is all about competition. Nestle is also accustomed to it and
competing with other food and beverage companies. It knows that it can’t simply exist by a
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number of simple products. So, its continuously diversifying itself. It’s diversifying to keep
Innovation of Products
Innovation is the keyword in today’s world. Innovating the products is a must as customers
today know every basic thing about creating a product by the boon of internet. So, nestle is
Automation is a blessing. It has increased the number of productions of any type of product
rapidly. Efficiency is maintained through automation which can also be called economies of
scale.
Any company emphasizes on its R&D sector. As R&D is the division where technological
changes takes place. So, Nestle puts millions and millions of dollar for the improvement of
R&D sector.
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Modern Communication Technology
Different ways of communication is being adopted by Nestle. Email, mobile phones and
modern ways of communication is being adopted. Nestle has its own website too. The website
includes recent news and other works of Nestle. Anyone can visit it and get a clear picture of
what’s going on in Nestle. Through this communicational changes, work can be quickly done
Environmental Factors
In Bangladesh monsoon occurs frequently. It affects the transportation and thus delivery dates
Due to climate change, some products might have high demand in one season and low demand
in another. Like Nescafe. It has high demand in winter in Bangladesh but few people like to
Nestle makes products being highly concerned about the environment. It’s cautious about the
mother earth and nature so that minimum pollution occurs while creating their products.
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Legal Factors
Taxes
Like other regulations, taxes put upon Nestle can be changed too. If high tax is put on Nestle,
Nestle imposes such laws to the workers that is good for them and it prospers the company.
Environment is one of the largest concerns of Nestle. Nestle manufactures products in such a
way that it harms the environment minimum. Environment is kept into mind by Nestle of any
country.
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Trade Regulations (Foreign)
Nestle mainly operates nationally. So, foreign trade regulations don’t affect that much as
foreign trade regulations affects internationally. Although seeing from the past couple of years
the economy of the overall world is not so great. So, it’s affecting slightly Nestle Bangladesh.
Key Opportunities
In present times Bangladesh Government has taken initiatives that are helpful for foreign
investment. It’s helping the foreign investors in many ways. Some of the steps are: citizenship
facilities, tax holiday, double taxation treaty (with 32 countries), tax exemption, flexible
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Social Trends that are changing
Western culture is taking over our culture. Especially the young generation is heavily
influenced by it. People are eating oats, cereals as their usual breakfast. They are drinking juices
People are becoming more and more health-conscious day by day. Especially Bangladeshi
people are more than they were at the last decade. This is due to some reasons. Such as NGOs
and health organizations like USAID, UN, UNICEF, UKAID, DANIDO etc. has taken
initiatives and health awareness programs. The main goal of this programs is to make people
aware and create good food eating habits in them. People are responding well in this campaigns
and people are starting to eat oats, cornflakes etc. other than their usual rural diet. [4]
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Growth of the Market
Nestle’s market growth is expanding at a fabulous rate. A new research shows that in 2012
people are drinking 85.5 liters of juice per year which now has certainly increased. People are
using more hygienic products than ever before. It’s because of the low hygienic environment
around them. Also, improved logistics has made possible to make the food products reach at
the farthest corners of the country. So, the market expanded from 60,649,009 (urban population
which is app. 35%) to it’s complete that is 166,368,149. So, market growth is increasing in case
of Bangladesh.
Gap of Market
A gap exists in some parts of Bangladesh especially in the rural areas. This is an opportunity
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Government/Political Stability
The present government is a stable government and is going to rule for another 5 years too. So
the rules and regulations are relaxed and there is no risk of sudden change or hard rule
implications.
Economic Boom
Statistics the GDP growth of Bangladesh is 8.2% for the fiscal year 2018-19 and is expected to
increase. Also, it has achieved Millennium Development Goals 8 goals. The purchasing power
of people increased. So, customers are looking for standard and high-quality products.
Fast Moving Consumer Goods (FMCG) industry depends on capital intensity. On the other
hand, there are many established local and foreign companies like Pran RFL, Unilever, Kazi
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Foods, Akij Foods etc. These companies act as high entry barrier which makes an opportunity
Bangladesh has one of the cheapest labor costs if compared with the whole world. Current
wage is 8000 BDT or app. 94 USD [5]. It’s very low if compared with other Asian countries
Being an agricultural country. Bangladesh has large supplies of agricultural goods. So, these
Key Threats
It’s variable that consumer taste shifts from one product to another. It’s a threat for Nestle that
people will shift their taste from one to another. Like from coffee to tea, cornflakes to oats etc.
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Copy of Products (Counterfeit)
There is an intellectual property act in Bangladesh. But its implementation is very weak. So,
copy products of the original ones remain unnoticed in the country. Some people slightly
reverse engineer and bring products into the market. For example, Coca cola’s 2-minute
noodles can be mentioned. It has the same packaging as Maggi Noodles. Another manufacturer
introduced Nescoffee to mislead customers. It’s a very big threat for the original brands because
other small manufacturers are creating fake products and stealing their market share. It’s
creating negative brand image and consumers are thinking they are buying the original ones.
Bangladesh is a unique country with people with different religious beliefs and norms. The
population can be divided into 3 major religions: Muslims, Hindus and Christians. Any product
that has conflict to any religious beliefs may face difficulty in the market. For example once
there was a rumor that pig fat was used by Unilever to manufacture one of its soap brands
Aromatic. Then people stopped using it and there was huge market loss for Aromatic. People
here like to eat rice other than cereals. Also, they prefer to eat spicy food. Any MNC who is
trying to enter this market has to face these kinds of potential threats.
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Local Manufacturer’s Unethical Means
Sabotage of the market and sales, different espionages of the industry are to name a few of the
unethical means adopted by local manufacturers of the country. It often goes unnoticed by the
The devaluation of currency of Bangladesh is in a great pace. From Jan 18- April 19 the
currency has devaluated by BDT 1.75/USD (Bangladesh Bank). It increases the risk of
currency exchange loss of any company. Imported raw materials and supplies cost is also
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2.4. External Factor Evaluation Matrix
Weighted
Sl# Opportunities
Sl# Threats
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3 Cultural Differences and Beliefs 0.025 1 0.025
Chapter 3
A strong support from the is gotten by Nestle Bangladesh. As it’s the world’s largest processed
food and beverage company, it’s a huge matter. Nestle Bangladesh has access to the benefits
Nestle is a very much known and renowned name. It has worldwide reputation for it’s quality
products. So, it helps Nestle a lot to retain market share in difficult situations and hard times.
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Strength of Individual Brands
There are lots of known strong brands of Nestle here in Bangladesh. Maggi Noodles, Corn
flakes, Nescafe are just to name a few. These items are generic of their respective product
Nestle has high ideals for its quality. It doesn’t compromise its quality given any situation. It
wants to give its customers 100%. Most of the competitors of Nestle lack this type of control
system.
The company spends a lot in R&D department. So, it’s giving its customer various types of
new products. With cutting edge technology Nestle copes up with any difficult market
situation.
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3.1.2 Weakness of Nestle Bangladesh
The products here made in Bangladesh is not the complete list of products made by Nestle.
Some products like Kitkat, sweet leaf tea etc. are not made in Bangladesh. They have huge
demand here. So, the company is not adopting to its true potential.
To control the overall management system, the topology of Nestle is centralized. Meaning the
main top management in the headquarters are responsible to take important and large actions.
Although it has enabled uniformity across globe but there are some demerits too. As decisions
are to be taken by central authority it takes a lot of time for implementation. But in any economy
and especially here in Bangladesh any product launch, promotions, marketing etc. are to be
done very fast. If Nestle doesn’t maintain this it has to face unimaginable losses.
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3.1.3 Evaluation Matrix for Internal Factor
Sl
# Opportunities
Sl
# Threats
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Chapter 4
innovative R&D
of high quality
Product Segment
31
II. Social Trends that are II. Takeover of Local Products like Water,
Agricultural Products
32
V. Foreign Exchange III. Use Forward Call
of Currency Exchange
Fluctuation
3. Introducing CSR Programs to concentrate on the Local Farmers to turn them into
Suppliers.
Enter New Segment of Market with Existing Products ie. Water, Chocolate, Juice etc.:
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4.2.3. Strength-Threat Strategies
2. Make More Physical Promotions e.g. Providing Free Samples of Product, making posters
by Objectives (MBO).
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4.3 Internal/External Factor Matrix
I II III
Nestle’s Position
High
(IFE 3.01, EFE
3.0-4.0
3.05)
IV V VI
Medium
2.0-2.99
VII VIII IX
Low
0.0-1.99
Recommendation: EFE 3.05 and IFE 3.01 accordingly the strategies are “Grow and Build”
which includes Horizontal and Vertical Integration, Market Penetration, Market Development,
Product Development
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Chapter 5
Nestle’s management structure is pretty much the same all over the world. Usually
management structure can be divided into these types: Matrix, Hierarchical, Horizontal.
The important decisions are usually taken from the top management and the subordinate
divisions usually implement it. The operating decisions are done by local groups. It is one of
Day by day the works done by Nestle are getting complex. It started its journey from a small
village and now conquering the whole world. It established itself as one of the leading food
companies.
There are 3 levels of management and their work are as follows [6]:
Top Management
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• Preparing plans and strategies
Middle Management
37
• They are directly related to production. Quality as well as quantity is related to their
performance
Finance is one of the most essential part of any company and especially for MNCs. The finance
Nestle financial management helps to make the best decisions of the company. Various
innovative plans are undertaken by them. Growth optimization, cash flow optimization,
The finance sector has many parts like the taxes section, treasury section, risk management
The role of financial management is diversified and can be extended to supply chains, sales
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In a nutshell, it can be said that the overall business performance, analyzation of strategic
issues, completion of projects are the issues undertaken by the finance department of Nestle.
Chapter 6
BCG Matrix
BCG matrix is one of the most renowned charts that is made to analyze business units. Bruce
Doolin Henderson invented it in 1970. It’s a 2x2 matrix. It analyzes the market position of
strategic business units (SBUs). Industry growth rate as well as relative market share are the
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Stars
Stars point out any company’s best opportunities for growth and also profitability. Stars have
In the context of Bangladesh, Nescafe and Cerelac can be regarded as stars. Nescafe, Cerelac
have no rivals. Nescafe is arguably the best coffee brand of Bangladesh. On the other hand,
Cerelac is the most renowned baby food available. There are many variations of Cerelac
available. Both market share and sales are continuously increasing from their launches.
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Mainly Nescafe and Cerelac are popular in Dhaka and Chittagong. But they can be popularized
in other districts too. These stars can do well more. All it needs is proper marketing strategies.
Cash Cows
Cash cows cover a large position of market share in the industry. They need small investment
Maggi Noodles can be regarded as cash cows in Bangladesh. It can be considered the primary
choice of children when it comes to instant foods. Its market growth is not that much high. The
usual purchasers usually buy this product but there are very few new purchasers.
NBL should take initiatives to make these products convert into stars.
Maggi Noodles is made targeting children only, but it should be made for elders kept in mind
Question Marks
Question marks generate very low cash. It has a very small market share compared to the high
growth market. That much of money is not made by them. Question marks is named to them
because the company doesn’t know whether to keep them or diminish them through selling.
Kitkat, Maggi Soup, Nestle Milk can be regarded as question marks in the framework of
Bangladesh. These items are of very high quality but the market share is not much. The price
is much high but they are not selling like the other popular products of Nestle. Maggi soup has
not significant market share because there are other popular soup brands. Kitkat is liked by
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many people because its tasty and crispy. But it has very low market share. The same can be
said about Nestle milk (Nido). Kitkat is not made here and is imported from India.
Dogs
Dogs means low growth market share or no growth at all. They can’t make a significant amount
of cash. Also, they don’t consume a good amount of cash. Dogs are named to them because
In Bangladesh, Munch, Koko Krunch, Nestea etc. are dogs. Although they are popular
worldwide, Bangladeshi people still don’t like them much. Nestea is not gaining its market
share because of Taza, Ispahani Zareen Tea, Lipton etc. are popular in Bangladesh. Munch is
a tasty chocolate bar but it’s not much known to the Bangladeshi children. And in case of Koko
Krunch, it’s quite a bit expensive. Nestle should take steps to convert these dogs into stars.
Chapter 7
Nestle’s growth is implemented in many strategic ways. They deal with the expectation of
customers, they compete with other brands, they trade on harsh landscapes and what not.
Everything they do is to deliver their mission statement properly. And it’s delivered by
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applying expertise on nutrition, meeting modern consumers’ needs, offering plant or grain
typed foods etc. Nestle has a model and it’s for creation of long-term value. It’s first step is to
increase growth. If the portfolio of the seen it can be seen that its ever growing. Nestle is present
in 187 countries and has more than 2000 brands. At retail level, 34 of these brands generate
more than 1 billion CHF.[9] And it’s happening in the retail level only. Nestle allocate their
resources for growth for creating the most value. It generates organic growth for Nestle. Which
Sales of Nestle
The Sales of Nestle for the past 2016, 2017 and 2018 is shown here [23] [24]:
In Millions of CHF
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As it can be seen from the bar chart and line chart, Nestle’s sales increased by a slight amount
from 2016 to 2017. But from 2017 to 2018 it increased to a drastic amount which was very
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Expenses of Nestle
The expenses of Nestle for the year 2016, 2017 and 2018 are shown below [23][24]:
In millions of CHF
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As it can be seen from the charts, that the expenses of Nestle decreased by 839 million CHF
from 2016 to 2017. But it increased a lot to 5473 million CHF by 2018 which was much more
Profit of Nestle
The profits of Nestle for the year 2016, 2017 and 2018 are as follows [23] [24]:
In terms of CHF
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From the charts, it can be seen clearly that the profits of Nestle is ever increasing from the past
couple of years. From 2016 to 2017 it was about 2000 units change. But from 2017 to 2018 in
changed to about 3700 units clearly states that it was a huge profit year for Nestle.
From looking at the sales, profit and expenses; it is clear that Nestle sales and expenses has
increased over the years but so has its profits. That means that Nestle is growing than ever
If the 2017-2018 fiscal years annual report is analyzed, it can be seen that [20]:
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For Balance sheet:
• Total current liability was 5427 in 2017 and 4738 in 2018. It means that current liability
decreased by 12.7%
• Current assets have increased from 28.6% from the previous year (2017). While fixed
• Then it can be seen that total assets and liabilities and equity was 133210 in 2017 and
• The earnings per share (in CHF) was 2.32 in 2017 and 3.36 in 2018
• ROE2017 = 11.4% and ROE2018 = 17.1% [21]. This means the ROE of Nestle increased
Unilever’s growth
If we see through Unilever’s growth, we see that it has a unique growth of its own. Unilever’s
growth makes a very good amount of profit and its sustainable too. Unilever has 18 successful
sustainable brands. The sustainability delivered 60% [10] of Unilever’s growth. Unilever is
also doing women empowerment. They helped about 1 million women so that they can
establish themselves, hone their skills and make and sell their products. Unilever also works
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for health and people’s hygiene. Unilever also helps 650000 small farmers to improve their
Unilever also tries its best to less pollute the environment. It emphasizes on releasing less
amount of greenhouse gas. It has also cut CO2 emissions, using groundwater and total amount
of its wastages. Its total amount of wastages is reduced by 96% per ton.
Unilever makes household products like utensils, toiletries, food items etc. On the other hand,
Nestle focuses its growth by corporate wellness unit for bringing great food items, whereas
The two MNCs growth from market also differs. Unilever’s mission is to add vigor to life. So,
it doesn’t hesitate to eliminate products. And in case of Nestle it’s creating new and newer
products every day. Nestle enhances its products in many ways. Packaging plays an important
Unilever looks for the future of their made products. They emphasize on hygiene and are
making products for pregnancy issues, brain diseases eradication, getting fat etc. and their
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Comparison of Nestle and Unilever’s Sales, Profit and Expenses
in Euros
Unilever in Euros
Note: The values are converted from CHF to Euros from the given weighted average annual
50
From looking at the charts above, it is clear that Nestle’s sales are much larger than Unilever’s
sales. Nestle’s sale remain pretty much the same throughout the 3 years (2016, 2017, 2018).
On the other hand, Unilever’s sales were much less than Nestle’s and were pretty much same
in Euros
Unilever in Euros
Note: The values are converted from CHF to Euros from the given weighted average annual
51
It can be seen that Nestle here too has more profits than Unilever. Both of their profits are
increasing from 2016 to 2017. For Nestle, it increased a little bit more from their 2016 profits
in 2017 in comparison with Unilever. For the year 2017 to 2018 Nestle’s profit increased much
52
more than it was from 2016-2017. On the other hand, Unilever’s profit also increased in an
Nestle in Euros
Unilever in Euros
Note: The values are converted from CHF to Euros from the given weighted average annual
53
Clearly, it can be seen that Nestle’s expenses are more Unilever’s. Nestle’s expenses were close
to 5000 units in 2016 and it went down to about 4000 units in the year 2017. On the other hand,
the expenses increased from 4000 units to the amount of 5000 units from the year 2017 to 2018
being the value pretty much same like the year 2016.
From looking at the charts and discussion it can be clearly realized that Nestle is a bigger MNC
than Unilever. Hence, it’s profits, sales and expenses are much more. Unilever is not that much
low; it’s also increasing at its own pace and becoming larger day by day.
• For the year 2018, Nestle’s Free cash flow (FCF) was 9470 Euros (Converted from
CHF) and Unilever’s FCF was 4962 Euros Usually people who invest like to invest in
such companies where FCF is high. High FCF of a company denotes that that company
is easily able to pay its debts. It also states that it can pay dividends and also buy back
stocks. The company can take various measures for the growth. Nestle, as a bigger
company has higher cash flow than Unilever, so investors tend to invest more on
Nestle.[28]
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• ROE of Nestle was 17.1% and Unilever 74.5% (For the year 2018). It shows that
Unilever is using more of its equity capital. Nestle is using less. It also says that
Unilever is generating high profit without the usage of capital [30]. However, it should
be stated that Nestle is only a food and beverage company and Unilever is not only food
but also is a product of cleaning, beauty, medicine, personal care etc. company [31].
• ROA for the year 2018 of Nestle was 7.50% and Unilever was 15.7%. A 5% or above
is a good value [32]. Nestle and Unilever both crossed the mark. High ROA means that
how effectively the assets are used of that company for bringing profits. Unilever is
doing slightly better in this case. Unilever is performing slightly better in terms of
normal.
However, in the recent covid 19 situation both Nestle and Unilever has seen decline in their
sales. On the half yearly analysis of Nestle, it can be seen that organic growth of Nestle reached
2.8% and throughout the whole year it’s expected to be in 2-3%. Real internal growth (RIG) of
2.6% and pricing of growth drastically reduced to 0.2%. Total sales (reported) decreased by
9.5%. [18]
Unilever on the other hand have a sales flat with a volume of only 0.2% and with a negative
price = 0.2% in the first quarter of 2020. Emerging markets declined by 1.8% but turnover
Nestle has taken steps so that their employees work hard and safe in this situation to deliver
necessary quality food items to the consumers. Nestle has donated taka worth 10 million to the
affected people of Sreepur. [16] Unilever is doing notable work too in this situation, they are
55
donating medical equipment to the people. They have donated breathing equipment as well as
The management of Nestle and Unilever is pretty much the same. But in case of both of them,
• Their organizational chart is built in such a way that it is cost cutting, definition of target
Unilever promotes leadership. It’s ever evolving. For the last 20 years it’s evolving from
traditional leadership models. These leadership style has grown for various factors such as
Unilever makes its mission, vision and goals clear to build effective leaders.
Nestle has its own strategy on leadership. They emphasize on innovativeness. They say that
their leaders can make mistakes but they have to be willing to learn from their mistakes. [14]
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Both Nestle and Unilever encourages teamwork because each have a joint goal. They think of
their employees as families and tries to give a friendly and family environment as office culture.
These are their mottos to gain maximum output from their employees.
Chapter 8
Conclusion
From the studies discussed above it can be seen that from the SWOT analysis and BCG matrix
is that Nestle is gradually developing and maintaining its operations properly in Bangladesh.
In its 150 years, Nestle target has always been to deliver quality food all over the world. And
it has been a success. Foods are produced for different cultures, religions and ethnicity by them.
Its main approach is to creating sustainable value for long term for consumers, employees,
shareholders that means each and every people connected with Nestle.
Nestle and Unilever have an enormous growth. But Nestle is clearly ahead of Unilever in terms
of sales, expenses and profit. On the other hand, Unilever has better ROE and ROA. But these
drastically changed due to coronavirus pandemic. Nestle and Unilever’s management is quite
the same but they have different policies. It can be said that Nestle is a good food oriented
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