PROJECT REPORT

ON
FUNCTIONAL LEVEL STRATEGY
OF NESTLE
IN THE COURSE
STRATEGIC MANAGEMENT
SUBMITTED BY
AASIYA BANOO
ROLL NO
T.Y.B.E.M
T.D.E.M.001A
(SEMESTER V)

UNDER THE GUIDANCE OF

DR. DAMAYANTI PREMIER
ACADEMIC YEAR
2023 - 2024
 CERTIFICATE

This is to certify that Mr./Ms. Aasiya Banoo, roll number TDEM001A

of Third Year B.E.M Semester V (2023 – 2024) has successfully
completed the Project on ‘Functional Level Strategy of Nestle’ as per
the guidelines of KES’ Shroff College of Arts and Commerce,
Kandivali (W), Mumbai-400067.

Teacher In-charge Principal

Name & Signature Dr. L. Bhushan
 Introduction to Nestle
• Nestle is a global food and beverage company with over 2,000 brands
that are enjoyed by people all over the world. Nestle company was
founded in Switzerland in 1866, and since then they have been
committed to providing high-quality products that bring joy and
satisfaction to the consumers.
• At Nestle, their mission is to enhance quality of life and contribute to
a healthier future. We believe that good food and beverages can make
a difference in people's lives, and they make every effort to create
products that are not only delicious, but also nutritious and
sustainable.
• Nestlé's portfolio boasts well-known and iconic brands such as
Nescafe, Kit Kat, Maggie, and Purina. These brands have achieved
widespread recognition and popularity, contributing to Nestlé's strong
presence in the global market.
• Nescafe is celebrated for its range of coffee products, while Kit Kat is
synonymous with its distinctive chocolate wafer bars. Maggie's
diverse culinary offerings and Purina's reputation for pet care
products further solidify Nestlé's position as a provider of trusted and
beloved consumer goods.
 Functional Level Strategy
Functional level strategy in a company refers to the specific approach
and actions taken within individual departments or functional areas to
support the overall business strategy.
Functional level strategies provide the necessary detailed plans for each
department to contribute effectively towards achieving the goals.

Key functional areas include Marketing, Finance, Human Resources,

Production and R&D department. Each of these areas develops
strategies tailored to their unique roles and responsibilities within the
organization. For example:
 Marketing: The marketing department might focus on strategies
to promote the company's products or services, target specific
customer segments, and create brand awareness.

 Finance: The finance department could develop strategies to

manage financial resources effectively, optimize capital structure,
and control costs.

 Human Resources: Human resources might focus on strategies to

attract and retain top talent, provide training and development
opportunities, and foster a positive organizational culture.
  Research and Development: R&D may develop strategies to
innovate and create new products or improve existing ones,
staying ahead of competitors in terms of technology and product
offerings.

 Production: A production functional-level strategy in a company

focuses on optimizing the manufacturing and production processes
to achieve efficiency, cost-effectiveness, and quality in the
production of goods.

Marketing Level Strategy

A marketing-level strategy in a company focuses on how the
organization plans to position its products or services in the market,
attract target customers, and create value. This strategy involves
making decisions related to pricing, promotion, distribution, and
branding to achieve the company's marketing objectives. Key
elements of a marketing-level strategy includes:
 Product Innovation: Continuously introduce new and improved
products that meet evolving consumer demands and preferences.

 Digital Marketing: Leverage digital platforms, social media, email

marketing, and online advertising to reach a wider audience and
engage with consumers in real time.

 Promotions and Discounts: Offer limited-time promotions,

discounts, or bundled deals to incentivize purchases and attract price-
conscious consumers.

 Retail Partnerships: Collaborate with retail partners to optimize

product placement, displays, and promotions in physical stores and
online marketplaces.
 Market Research: Continuously conduct market research to stay
updated on industry trends, consumer preferences, and competitors'
activities.

 Customer Engagement: Interact with customers through social

media, online communities, and customer service channels. Respond
to inquiries, feedback, and reviews.

 Localization: Adapt marketing campaigns to suit local cultures,

languages, and preferences in various regions.

 Collaborations and Partnerships: Collaborate with other brands or

organizations to create co-branded products or marketing campaigns.
This can help expand reach and introduce Nestlé to new audiences.

Finance Level Strategy

A finance-level strategy in a company involves making financial
decisions and allocating resources to support the organization's
overall goals and objectives. This strategy focuses on managing
financial resources effectively to optimize performance, achieve
growth, and ensure the company's financial health. Key elements of a
finance-level strategy include:
 Investment in Innovation and Research: The finance department
allocates funds for research and development to create innovative
products, improve existing ones, and adapt to consumer preferences.

 Cost Management: Effective cost management is crucial for growth,

with the finance department implementing cost-cutting measures and
efficient resource allocation.

 Working Capital Efficiency: Nestlé employs a strategy of just-in-

time inventory and supply chain financing to keep their working
capital at a minimum.
 HR Expenses: Monitoring HR expenses by developing HR metrics
and cost per hire, training spends per employee, etc. against
competitors.

 Financial Flexibility: Maintaining a strong balance sheet and

investment grade credit rating to ensure financial flexibility for
growth.
 Fostering Profitable Growth: Pursuing profitable growth through
innovation, renovation of products, and geographic expansion.
Finance enables these by providing capital and overseeing budgets.

 Tax Efficiency: Nestlé utilizes appropriate tax planning and

structuring approaches to minimize the overall global tax burden.

 Long-term Shareholder Value Creation: Nestlé's finance priorities

aim to drive sustainable growth, steady dividends, and share
buybacks to generate long-term shareholder returns.

R&D Level Strategy

A Research and Development (R&D) level strategy in a company
involves planning and executing initiatives to innovate, create new
products, improve existing ones, and enhance the organization's
competitive advantage through technological advancements and
intellectual property. Key aspects of an R&D level strategy include:
 New Product Development: Focus on developing new and
innovative products that cater to changing consumer preferences and
emerging trends.

 Open Innovation: Embrace open innovation by actively seeking

ideas and solutions from external sources, such as startups,
technology providers, and industry experts.
 Sustainability Initiatives: Invest in R&D projects focused on
sustainable sourcing, packaging innovations, and reducing the
environmental impact of products.

 Consumer Insights: Utilize data analytics and consumer research to

gain insights into preferences, behaviors, and trends, guiding the
development of products that meet customer needs.

 Global Expansion: Tailor R&D efforts to cater to diverse markets

and cultures while adhering to local regulations and preferences.

 Research Collaboration: Collaborate with universities, research

institutions, and external partners to leverage external expertise and
resources for innovative product development.

 Cross-Functional Collaboration: Foster collaboration between

R&D, marketing, supply chain and other departments to ensure that
products developed align with market needs and can be efficiently
brought to market.

 Packaging Innovation: Focus on innovative packaging solutions

that improve convenience, freshness, and sustainability, while also
considering cost-effectiveness.
 Production Level Strategy
A Research and Development (R&D) level strategy in a company
involves planning and executing initiatives to innovate, create new
products, improve existing ones, and enhance the organization's
competitive advantage through technological advancements and
intellectual property. Key aspects of an R&D level strategy include:
 Lean Manufacturing: Lean principles optimize production by
eliminating waste, reducing inefficiencies, and streamlining
workflows, minimizing downtime, and maximizing resource
utilization.

 Capacity Planning: Develop a comprehensive capacity planning

strategy that aligns production capabilities with anticipated demand.
This helps prevent underutilization or overutilization of resources.

 Demand Forecasting: Utilize accurate demand forecasting to ensure

that production is aligned with market needs, minimizing the risk of
overstocking or stock outs.

 Quality Control: Implement rigorous quality control processes at

every stage of production to identify defects early and prevent costly
rework or recalls.

 Flexible Manufacturing: Design production processes that allow for

flexibility in changing product specifications or volumes.

 Automation and Technology: Invest in advanced manufacturing

technologies and automation to increase production speed, accuracy,
and consistency.

 Standard Operating Procedures (SOPs): Establish standardized

operating procedures to ensure consistency and quality in production
processes. This helps reduce errors and rework.
 Energy and Resource Efficiency: Focus on reducing energy
consumption and optimizing resource usage. This includes initiatives
to minimize waste, recycle materials, and adopt environmentally
friendly practices.

Human Resource Level Strategy

Human Resources (HR) plays a crucial role in shaping an organization's
overall strategy, particularly in managing its workforce to achieve
business objectives. The HR level strategy focuses on aligning human
resources practices with the company's goals, values, and competitive
needs. Key elements of an HR level strategy include:
 Employee Development and Training: Investing in employee
development through training, workshops, and skill-building
enhances professional growth and company growth.

 Performance Management: Implementing effective performance

management processes can ensure that employees' contributions are
aligned with the company's goals.

 Flexible Work Arrangements: The HR department can develop

policies that allow for remote work or flexible schedules, which can
contribute to employee satisfaction and productivity.

 Succession Planning: Identifying and developing internal talent for

key leadership positions is essential for long-term growth. The HR
department can implement strategies for smooth leadership roles
when needed.

 Employee Engagement and Retention: Engaged employees are

more likely to be productive and committed to the company's growth.
The HR department can develop strategies to enhance employee
satisfaction, work-life balance to retain valuable talent.
 Inclusion Initiatives: The HR department encourages a diverse and
inclusive workplace that can develop strategies to ensure equal
opportunities for all employees and to create an inclusive culture.

 Employee Well-being and Health Programs: A healthy workforce

is a productive one. Implementing wellness programs, mental health
support, and health initiatives can contribute to employees' overall
well-being and performance.

Functional Relationship
The relationship between various departments within an organization,
such as HR, Finance, Production, Marketing, and Research &
Development (R&D), is crucial for the overall success and functioning
of the company. Each department plays a unique role, but they are
interconnected and dependent on each other in several ways.

 HR (Human Resources) and Finance:

• HR and Finance departments often work closely when it comes to
managing the workforce. HR is responsible for hiring, training,
and maintaining a skilled workforce, while Finance allocates
resources for employee salaries, benefits, and other related
expenses.
• HR provides Finance with information related to employee
compensation, benefits, and any changes in the workforce that
might impact the budget.

 Finance and Production:

• Finance and Production closely interact in terms of budgeting
and resource allocation for production activities.
• Finance provides Production with the funds necessary for raw
materials, equipment, and other production-related expenses.
 Finance and R&D:
• Finance supports R&D initiatives by providing the necessary
funding for research projects, development of new products,
and innovation efforts.
• R&D informs Finance about potential opportunities and risks
associated with new projects, which helps in budgeting and
resource allocation decisions.

 Production and R&D:

• Production and R&D work together to bring new products from
the research phase to actual production.
• R&D provides Production with technical specifications and
requirements for new products, and Production provides
feedback on feasibility and efficiency.

Conclusion
In conclusion, the functional level strategy of a company plays a pivotal
role in translating the broader business strategy into actionable plans
within individual departments. This approach ensures that each
functional area aligns its efforts with the company's overarching goals,
leading to a cohesive and effective organizational strategy.
By providing detailed plans, fostering innovation, and promoting
coordination, functional strategies enable departments to contribute their
expertise and capabilities to the company's competitive advantage. With
a focus on resource allocation, cost management, and financial
flexibility, functional level strategies contribute to the company's
sustained growth and success.
At last, a well-executed functional level strategy strengthens the
company's ability to navigate challenges, seize opportunities, and thrive
in today's dynamic business landscape.