Nestle: "Food and Beverage"

NESTLE
“Food and Beverage”
Member
Sison, Jaira Karyll

Rentoria, Carl John E.
Aspa, Jana
Eugenio, Kenneth Kayle P.
Dela Cruz, Monique
Industry
Nestlé is the world's largest food and beverage company. They have more
than 2000 brands ranging from global icons to local favourites, and they’re present in
191 countries around the world. There are driven by the purpose of enhancing the
quality of life and contributing to a healthier future. The world around us is changing
fast with consumer expectations, competition and society evolving at an
unprecedented pace. While the company is anticipating and adapting to these
changes, two important dimensions do not change; the purpose and values. We are
still driven by the same purpose and guided by the same values as we were 150
years ago. Purpose is why we exist and what motivates us. Delivering against our
purpose is a continual source of pride.
Introduction about the business
At Nestlé, our purpose is to unlock the power of food to enhance quality of life
for everyone, today and for generations to come. This must be reflected in
everything we do. It is through enhancing quality of life and contributing to a healthier
future that we aim to deliver sustainable, industry-leading financial performance and
earn trust. In pursuing our purpose, we are guided by our values, which are rooted in
respect. This means respect for us, for others, for diversity and for the future. It is
people who are driven by purpose and guided by values. People are at the heart of
our company. They ensure our success and without them, nothing can be achieved.
This is why we care for people first and why we put people above systems. All over
the world, people strive to enjoy healthy and fulfilling lives, sometimes in difficult
situations. The use of natural resources puts stress on our environment and on the
stability of communities. Yet human creativity, technology, and a commitment to
progress open new possibilities every day to improve lives and help create a healthy
and sustainable future for all.
Product offered.
Nestlé is a manufacturer and marketer of food products and beverages. It is
the largest food company in the world measured by revenues. Nestlé's products
include baby foods, bottled water, cereals, chocolates and confectionery, coffee,
culinary products, chilled and frozen foods, dairy products, nutritional products, ice
cream, and pet products. They also offered brand likes include Nescafé, KitKat,
Nespresso, Maggi, Toll House, and Milo.
Picture of the business and product offered.
Discuss the business' opportunity cost, sunk cost, and variable cost.
The opportunity cost of Nestlé is annual profit of 1000 million dollars, they can
either invest that money for future expansion of business or they can buy shares. If
nestle decides to buy shares, then the opportunity cost in that case would be
investing the money for expansion.
Along with that the sunk cost that affect Nestlé company is COVID-19 crisis all
we know that having an extraordinary and far-reaching impact on all our lives. We
have been working closely with local authorities and business partners to respond to
the challenge. In these difficult times, many of our business partners are facing
serious challenges, which create enormous uncertainty for their employees and
families. We will continue to be a dependable business partner and make every
possible effort to adapt to the evolving situation.
Moreover, fixed costs and variable costs have played an important role in paving
the path for Nestle. However, fixed costs are smaller than variable costs. It means
that the large variable costs would make the Nestle a large organization as the sales
of the company would also enhance. The fixed costs of Nestle incorporate lease,
rent, insurance, compensation, and premium paid to employees. Whereas, variable
cost incorporates power, raw materials, expenses related to distribution, marketing,
travel, communication and advertising, stores and spares as well as depreciation.
Discuss the business' product cost and period cost.

Nestle uses various pricing strategies including price skimming, inexpensive and
bundles pricing strategy, penetration pricing strategy, stock keeping units,
psychological pricing strategy, discounts, and competitive pricing strategy.
How is the product cost and selling price of each product computed?
Nestle is a multinational brand with a present net worth of about $270 billion.
The success that the brand has is due to its pricing strategy. The revenue of Nestle
is continuously growing, this depicts the successful identification and placement of its
products in the market. Nestle’s products are pricier in comparison to the products of
the retailing brand.
Nestle’s pricing strategy is distinctive in contrast with other brands. It merely
hinges on recognition which is attributed to the apparent quality of the product.
Based on this quality and the attitude of the customers, nestle assesses the pricing
strategy it wants to implement.
Are they profitable? If not, discuss their strategies to increase profitability.
We think that Nestlé is profitable because they aim to inspire people to live
healthier lives to improve society. And as you can see this company for being
successful there’s a lot of investors that want to be their partner or collaborative. This
ensures them long-term success that comes with earning their consumers' trust and
maintaining market leadership. And currently, they have more than 2,000 brands
(from global icons to local favorites) and are in 190 countries around the world.

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NESTLE

“Food and Beverage”

Sison, Jaira Karyll

Discuss the business' product cost and period cost.

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