Question

Give an industry life-cycle analysis of Nestle.

Answer 1

It is very important to understand the life cycle of any company which may be in any industry it has to go through various stages as mentioned in the above figure.

Development - It requires a lot of expenditure being done on research & development so that Nestle's products stand out in the market. Nestle invests around CHF 1.5 billion in R&D every year.

Introduction - Nestle today has reached 130 countries in the world with its products. It manufactures 10,000 different products. The main aim of Nestle was to reach to its audience with various products it manufactured.

Growth - In terms of revenues, Nestle has outperformed on global level the profit margins have not only been increasing but have been surpassing its competitors. It now employs over 100,000 over the globe to ensure its growth targets.

Maturity - It is a stage where the company starts realising the profits for the efforts, R&D, etc done in earlier stages. The main aim of Nestle was to continue evolving over the years and therefore we see that the company has never entered into the decline stage of profits.

This is just a short explanation of industry life cycle of Nestle to explain the stage of industry.