Assessment Of Global Marketing & Sales Development Assignment Sample

Introduction of Assessment Of Global Marketing & Sales Development

Assignment sample in UK International marketing is to be carried out by every organization to understand the organization's valuation in the global market. Here Nestle and Danone are the chosen organizations where it is important to evaluate the recent developments within the organization to help them conduct International marketing across various countries in the world. The international environment related to finance recently is seen to have gone through a couple of developments that have impacted the growth and performance of Nestle and Danone.

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Companies overview

The total assets increased for Nestle on 31 December 2021 was seen as EUR 19012 million compared to what on 31 December 2020 was seen as EUR 13692 million. In Danone, the overall net sales were mostly from the products that were renovated in the past 2 years. Nestle was also introduced to certain risks that involve risk banking credit risk, credit risk, market risk, liquidity risk, and risk in the increase for the cost of capital. Nestle reported sales of 45,580 million for the period of six months which was seen to be 41,755 million a year ago. So definitely there was a decrease in sales after comparing the sales for the period of six months.

The two organizations Nestle and Danone also are seen as big rivals in the market as both set high benchmarks for themselves. Nestle is seen to rank second in the Food and Agriculture department whereas Danone comes just below Nestle as it ranks third in the overall market. Therefore there is tough competition between each other as the benchmark set is of pretty high standards.

Market analysis of the Switzerland and France

There are several factors of any country that affects the organizational financial performances. The proper market analysis is the success factor of the organization and this analysis is dependent on different situational practices like political, economical, social as well as technological factors of the countries.

Factors	Trends	Switzerland	France
Political	? “Political stability index” ? “Corruption rate” ? “Foreign trade policy” ? Tax policy ? Labor laws ? Trade restrictions	“0.45 % in 2021” “69.45 Points in 2021” “European Free Trade Association Convention” “Federal income tax” “45 and 50 hours per week” “Lowering customer tariffs”	“0.37 points in 2021” “84 Points in 2021” GATT “Budget of French Parliament” “40 and 45 hours per week” “Open services markets”
Economical	? “Economic growth” ? “Inflation rate” ? “Interest rate” ? Unemployment rate	“3.7% in 2021” 2.9% in 2021 2.5% 12%	“7.0% in 2021” 3.4% in 2021 4.5% 14%
Social	? “Average annual income” ? Population growth rate ? Health consciousness ? Cultural barriers	“60,000 CHF - 72,000 CHF per year” 12% High No	$61,020 in 2021 6% High No
Technological	· Technological investment · Technology incentives · Technological innovation · Research and development activities · Technological awareness	Around 6 billion 16.4% Moderate Innovative Moderate	More than 20 billion 14.5% High Innovative High
Legal	· Employee rights · Discrimination laws · Anti-trust laws · Consumer protection laws	“Labor Law details standard work hours” and “Protection of employee health” “Article 8 of the Federal Constitution” “The Federal Trade Commission Act” “Fair Credit Reporting Act”	“L.1221-6 of the Labour Code” “Economic and Professional Gender Equality Act, 2021” “Article L. 420-1 of the French Commercial Code” “Truth in Lending Act”
Environmental	· Environmental rights · Climate change · Pressure from NGOs	“Pollution abatement policies” “Swiss CO? Act” No	“Environmental Law, 2021” “The Paris Agreement on climate change” No

Table 1: PESPLE analysis of Switzerland and France

(Source: Hamzah et al. 2021)

Strategy for new market entrance

Covid 19 pandemic affected the sales of the Nestle organization because of lockdowns and social distancing for a period of six months in the year. It also put a halt on the recruitment process in various sectors of the organization excluding the sectors of artificial Intelligence and e-commerce (Chellasamy and Jananimanjeeswari, 2018). As the cases related to Covid 19 grew in the country, sales also decreased considerably as the Covid 19 had affected the overall economy of the country (Woolhandler et al. 2021). The prices of different products like Chocolate, baby wet meals, baby milk, packaged water, and ice creams were forced to be increased as the entire country faced an economic crisis during the Covid 19 pandemic.

The prices increased rapidly for certain items like sauces, and ice creams, this may be due to the fact that people tend to store the items in their homes so that they do not need to go out without extreme necessity. Danone adopted some defensive strategies that helped them to survive during a pandemic (Hamzah et al. 2021). Their top priority was to ensure the safety of their employees during the pandemic period. They ensured that all the employees get their wages and surely could help them in the crisis situation. Healthcare measures were also taken by the organization to help their employees fight the pandemic.

Covid 19 also affected both the companies financially as Nestle reported their sales decreased by 6.2%, and in foreign exchange, the sales decreased by 5.8% (Omodero, 2022). Danone saw a decrease in LFL sales by 1.5% compared to previous years, Recurring EPS growth also saw a decrease of 13.2% (Danone.com, 2020). Both Nestle and Done adopted similar strategies that help them cope with the financial loss. These strategies include acceptance where these organizations happily accept the loss and move ahead. To control the controllable, these organizations focused more on controlling things that were under their control.

This has seen massive impacts on the UK economy as after the withdrawal there will be no assistance from other European members in the union. This saw a rise in the cost of petrol in the UK, the material cost also increased as a result of Brexit. This slowed down the growth of the industries in the UK. Economic growth was also reduced due to this event. Brexit also had a significant impact negatively on food production companies like Nestle and Danone (Gandhi, 2022). There were many reasons why Britain left the European Union but these had impacts on food production companies in various aspects.

Nestle and Danone face various financial problems due to Brexit as the prices of various products go up due to the weak economy of the country (GUPTA, 2018). This decreases sales as consumers are not able to buy products in more quantity as they cannot meet the standards of prices (Mukherjee et al. 2021). The majority of manufacturing workers belonged to the European Union, and as a result of Brexit, the workers cannot work in the UK (Akintola and OLAOYE). This results in a shortage of workers in the manufacturing department as a result there is low productivity in the organization. Due to low productivity, the prices of the products go high as a result there will be fewer sales in the market which has a direct impact financially. In order to cope with the financial loss due to Brexit organizations like Nestle and Danone have adopted a few strategies in order to come out of the financial loss (Shrotriya, 2019). Nestle and Danone remembered that the labour market in the UK is pretty strong therefore they hired the maximum number of workers from the UK manufacturing.

Marketing segmentation

Customer analysis

Factors	Switzerland	France
Population	87 lakhs	6.75 crores
Individualism	High	High
Internet users	86%	78%
“Customer spending per capita”	$462.92 billion	$1503.92 billion
Revenue of the organization per person	$ 1450.12	$4543.12

Table 2: Customer analysis

(Source: Self-created)

It is clearly seen from the above table that the population of France is more than other countries and that is why the “Customer spending per capita” is higher than the Switzerland. On the other hand, the revenue of the organization per person of Switzerland is lower than France. It is seen that internet user ration of Switzerland is better than France and that is why digital promotional practices is very beneficial to the country rather than France. The two renowned companies Nestle and Danone will be greatly benefitted to operate its business in these countries. Another important part that is seen is the population and the internet facility of the country that will be also a beneficial for the organizations.

Sources of finance

Nestle is a food manufacturing organization that maintains good standards of food in the UK market. Nestle is seen to beat its competitors comprehensively when it comes to earning big profits and increasing sales. It is seen to have beaten organizations like Coca-Cola, Procter and Gamble, British American Tobacco, Unilever, and many more. The net profit of Nestle as of now is seen to be 16.9 billion USD (Statista.com, 2021).

Figure 1: Nestle’s position among its competitors

(Source: Statista.com, 2021)

There are various sources of finance for Nestle as it sells a variety of products in the UK that includes beverages like Nestle coffee, chocolate, cheese, pet food, bottled water, processed meat, pasta (Shrotriya, 2019). Powdered and liquid beverages are sold for CHF 24.0 billion, CHF 15.6 billion revenue is earned from selling pet care products, CHF 13.2 billion is earned from the nutrition and health science sector. 10.7 billion is earned from selling milk products and ice cream and 12.1 billion is earned from prepared dishes and cooking aids (Nestle.com, 2020). Danone's source of finance comes from selling different nutrition products like Protinex Tasty Chocolate,Protinex Vanilla, Aptagrow, Aptamil Gold, Protinex Original, Nusobee, Dexolac Premium, and Dexolac. These products are very famous among the public in the UK because of good quality standards. All these products have a big impact on the source of finance for the Danone organization (Emefiele and Edim, 2018). Danone’s net sales is seen to be 24.28 billion EUR, the overall sales of the products is seen to be 13.1 billion EUR, and the number of employees is seen to be 98,105 (Cyril et al. 2020). All these are a result of good sales of products in the market. Danone focuses on producing good quality products as a result of the sales increase which becomes the major source of finance for Danone.

Dividend policy

In December 2021 Nestle is seen to have a dividend share of CHF 2.80, as on first interim dividend a dividend of rupees 25 per equity share on May 2022 (Nestle.com, 2020). In December 2022 2000% or $ 200 had been announced for a single share. The current share price results in an overall yield of about 1%. The Board of directors of Nestle declared the second interim of $ 120 per equity share that rounds up to a face value of $ 10 per equity share. This amounted to a sum of $1157 billion dollars which is a big amount.

Positioning

Nestle is one of the leading business organisations that runs its business over several decades. On the other hand, Danone is another important business organisation in the food industry across the world. These two companies offer a great variety of foods to the customers and make customer satisfaction levels. Nestle has different types of market share in different sections or products. In terms of the “instant noodles market,” the market share of the organisation is more than 59.7% while in other baby food products the share increases to around 66.5%. The coffee market across the world is not complete without Nestle as it consumes more than 90% of the business scenario. The market share of Danone across the world is 30 per cent, which is comparatively lower than the other companies. On the other hand, after the pandemic situation business of the organisation increased greatly and currency becomes a tough competitor of Nestle.

The liquidity ratio is categorized into three different sections: current ratio, quick ratio and cash ratio. These are the three important ratios that guide determining the success of the organization. The current ratio of Nestle is 0.86 in 2020 and it increased in 2021 to 0.92. On the other hand, the current ratio of Danone is 0.76 in 2020 and it will increase in 2021 to 0.82. The cash ratio of Nestle is 0.07 in 2020 and it increased in 2021 to 0.06. On the other hand, the cash ratio of Danone is 0.05 in 2020 and it will increase in 2021 to 0.06.

The figure disclosed the comparative study of two different companies like Nestle and Danone. The current assets were $36337 million in 2020 but in the current situation, it is increased to $40337. Apart from that, the current liabilities of Nestle are $42667 million in 2020 but they will increase to $43786 million in 2021. The current liabilities of Danone are $40996 million in 2020 but they will increase to $41886 million in 2021. The inventories of Nestle is $12221 million in 2020 and it is increased to $14221 million in 2021. On the other hand, the inventories of Danone were $10221 million and it will increase to around $11121 million in 2021.

Nestle and Danone are two important organizations in the global food industry and they have operated their business successfully over the decades. This figure discloses that the business operation ratio of Nestle is better than Danone.

These two organizations have slight differences in terms of liquidity ratio and it is seen that Nestle operates its business with $2883.77 million in 2021 and in 2020 it was $2813 million. On the other hand, Danone operates its business with $2234 million in 2020 and in 2021 the ratio increased to $2454.48 million. The operating income of Nestle in 2020 was $28639 million and in 2021, the income ratio was increased to $32639 million (nestle.com, 2022). On the other hand, the operating income of Danone in 2020 was $18639 million and in 2021, the income ratio was increased to $28639 million. The gross profit margin of Nestle is $32351 million in 2020 and it is increased to $38351 million in 2021. Danone operates its business with $18639 million and it increased to $28639 million.

The net profit margin of Nestle is $32351 million in 2020 and it is expected to increase to $38351 million in 2021. Danone operates its business with $18639 million and it increased to $28639 million. The sales of pre-tax income of Nestle is $62465 million and it was increased to $78465 million in 2021. The sales of the pre-tax income of Danone are $44465 million and it was increased to $62456 million in 2021.

The quick ratio of Nestle is 0.57 in 2020 and it increased in 2021 to 0.66. On the other hand, the cash ratio of Danone is 0.52 in 2020 and it will increase in 2021 to 0.55 (danone.com, 2022). The sales ratio of Nestle is $182465 in 2020 million which decreased in 2021. This figure clearly indicates that all the business activities of Nestle are better than the Danone. The operating income of these two companies is increasing in 2021 from 2022.

The “efficiency ratio” will also help the company's marketers and business professionals to state the analysis the how well they are using their company’s internal liabilities and assets. This ratio of working capital or efficiency also helps in the calculation of receivables turnover rates, and liabilities repayment. The working capital ratio requires the input of data companies' inventories, the receivable count and account payables and rate of sales, profit and purchase of products.

Marketing mix of Nestle and Danone

The increases and decreases in the inventories of both companies, Nestle and Danone are calculated from the annual inventory management report. The collected data are calculated in the excel sheet and analyzed in this portion. This inventory day is the essential metric of inventory that measures how long a company’s products will remain in storage “before being sold”. The higher percentage indicated that the product is too expensive and its demand is low in the market as it is less affordable for all economic groups.

Product

Both of the company deals with the food or beverages products and food are all manufactured in the organization as well. The receivable days of both companies, Nestle and Danone generally indicated the “Accounts Receivable Days” (AR days). AR days are generally calculated as the average time that has been taken by the customer to pay back the business of the company for the services and products they have purchased. This will help both the food and beverage companies to estimate their “marketing plan business operational plan, and cash flow” in order to maintain their “short-term expenses” in the upcoming days.

Figure 2: Products of Nestle

(Source:

Another important company is the Danone, which is an international food brand and offer a great variety of foods. The best selling product of this company is the Evian, which is a water brand. This is considered the leading brand of the mineral water brand that was distributed over 120 countries all over the world.

People

In the current situation Danone is dealing with more than 102,449 employees and the CEO of the company is Antoine Bernard de Saint-Affrique. Currently, Nestle operates its business with more than 276,000 employees across the world. The payable days generally indicated the ratio of “Days payable outstanding” (DPO) of both the companies, Nestle and Danone. This highlights the financial ratio that indicates the average time that companies take to pay their invoices and bills to all their traders and suppliers. The companies generally made payments to their trusted suppliers, creditors, financiers, and vendors in order to maintain their sales, profitability, and productivity and to resolve the disruption issues in tier business operation plans and supply chain management.

The efficiency ratios generally help the study developers to analyze the working capital of the companies they have selected for their research. This study will be researching the global marketing strategies that two leading food and beverage companies, Nestle and Danone use to enhance their sales, productivity, and profitability over time.

Promotion

The promotional activities of both organizations are mostly dependent on the digital platforms as well as traditional promotional way also used by both companies. The “Operating cash circle” generally indicates the cash cycle or CCC that measures the estimated time in which the “input dollar is tied up” in companies' sales and productivity rate. This ratio of sales and productivity rate is gradually converted into the cash that the company received at the end of the year. The effectiveness of the management of the companies is generally measured by this CCC.

Price

The price of Nestle is more affordable than Danone and that is why the product sale of Nestle is generally higher. According to the report of “Nestle Annual data”, it has been found that the inventory of Nestle was nearly 78.78 (79) in the year 2020. At the end of the year 2021, December the inventory of the company increased to about 90.12 (90) (gurufocus.com, 2022). Recently Nestle has an increased inventory of about 102.22 as per the report of June 2022. The inventory of the company of Danone had an increase of about $2.102B in the year 2020 and $2.345B in the year 2021 as found from the annual report of Danone (macrotrends.net, 2022).

The “price to earnings ratio” is denoted as the p/e ratio that helps in the calculation of the stock valuation metric. This generally helps the companies to compare the share price in the competitive market based on EPS value (Siregar, 2019). This p/e ratio usually helps the “analysts and investors” to determine the relative value of the company’s shares in the stock market and with their competitors. The “dividend payout ratio” is very essential for companies to find out the major financial metric that they generally use in order to determine and evaluate the business sustainability (Husna et al. 2019). This is the rate divided that the company pay to all their shareholders in the market relative to “total net income”. The calculation of the “dividend payout ratio” is done by dividing the “dividends paid by earnings” after taxation and multiplication the generated result by 100.

The valuation ratio mainly helps the selected companies, Nestle and Danone to analyze their net revenue of selected companies, “total shares outstanding”, present market price, total equity and dividends per share. This is the major financial process through which the marketers of both companies can determine what the companies are worth. Insight is generally put in these “Valuation ratios” that show the growth rate of the companies’ shares, and conditions of the stock market and also evaluated useful tools that are used in companies’ investment potentials.

“Earnings per share” (EPS) highlights the net annual income and total business profits of both the companies, Nestle and Danone. The formula through which this EPS can be calculated total profit rate divided by the “common shares outstanding”. The amount of revenue is generally indicated by this EPS that the company has made in each share of their stocks. EPS is a widely used metric to measure the “estimating corporate value” of large business companies.

Conclusion

From the study it can be concluded that Nestle and Danone have a good reputation in the market internationally. There are various challenges faced by the organization internationally due to covid and brexit financially but have been able to make up for the financial losses by adopting various strategies that helped them to overcome those difficulties. Different strategies related to finance and risk management help to overcome challenges involved financially. This also shows the source of finance for both the organizations which help to sell their goods in the market. The analysis of the competitors of Nestle and Danone in the international market is also seen to be quite good but especially Nestle has put behind a lot of competition as it is seen to lie well above its competitors.

Analysis of efficiency ratio and valuation ratio also give a clear understanding of the position of the organizations in the food manufacturing industry. The in-depth calculation of Efficiency ratio and Valuation ratio give a clear picture of the reputation of Nestle and Danone in the international market. Different statistical data related to Dividend policy also shows the reputation of Nestle and Damone in the international market. Covid and Brexit related problems have also tried to hinder the progress of Nestle and Danone. Finally to conclude this study gives a clear indication that Nestle and Danone are two of the most reputed organizations in the international market.
References

Journals

Akintola, A.F. and OLAOYE, S.A., DIVIDEND POLICY AND MARKET PRICE OF SELECTED LISTED FIRMS IN NIGERIA.

Aleixo, R.D.C., 2021. Equity research: Nestlé SA/review on the fast moving consumer industry, macroeconomic conditions and valuation methodologies (Doctoral dissertation).

Chellasamy, P. and Jananimanjeeswari, L., 2018. Determinants of dividend: A study with reference to select FMCG companies in India. ZENITH International Journal of Business Economics & Management Research, 8(10), pp.10-18.

Cyril, U.M., Emeka, E.C. and Cheluchi, I.F., 2020. Effect of dividend policy on financial performance of consumer goods manufacturing firms in Nigeria. Science Journal of Business and Management, 8(1), pp.7-15.

Emefiele, E.O.H.O.C. and Edim, I.E., A Disaggregated and Comparative Analysis of Working Capital on the Performance of Manufacturing Firms in Nigeria (A Study of Nestle and Cadbury Nigeria PLC).

Gandhi, P.R., 2022. MARKETING AND CONSUMER PERCEPTION OF MAGGI NOODLES (Doctoral dissertation).

GUPTA, A., A Comparative Study of Dividend Policies of Selected Indian Companies from the View Point of Shareholders. Finance and Accounting, 16, pp.165-182.

Hamzah, S.R., Halul, H., Jeng, A. and Sha’ari, U.A.S., 2021. Forecasting Nestle Stock Price by using Brownian Motion Model during Pandemic Covid-19. Malaysian Journal of Science Health & Technology, 7(2), pp.58-64.

Husna, A. and Satria, I., 2019. Effects of return on asset, debt to asset ratio, current ratio, firm size, and dividend payout ratio on firm value. International Journal of Economics and Financial Issues, 9(5), p.50.

Mukherjee, J.S., Nestle, M., Prine, L., Saadi, A., Schiff, D., Shapiro, M., Tesema, L. and Venkataramani, A., 2021. Steffie Woolhandler*, David U Himmelstein*, Sameer Ahmed, Zinzi Bailey, Mary T Bassett, Michael Bird, Jacob Bor, David Bor, Olveen Carrasquillo, Merlin Chowkwanyun, Samuel L Dickman, Samantha Fisher, Adam Gaffney, Sandro Galea, Richard N Gottfried, Kevin Grumbach, Gordon Guyatt, Helena Hansen, Philip J Landrigan, Michael Lighty†, Martin McKee, Danny McCormick, Alecia McGregor, Reza Mirza, Juliana E Morris.

Omodero, C., 2022. The Role Of Corporate Tax, Earnings And Debt In Determining Dividend Policy Of Firms.

Shrotriya, V., 2019. Analysis of Net Working Capital of Nestle India Limited. International Journal of Research and Analytical Reviews (IJRAR), 6(1), pp.568-576.

Siregar, O.K., 2019. Pengaruh Deviden Yield Dan Price Earning Ratio Terhadap Return Saham Di Bursa Efek Indonesia Tahun 2016 Sub Sektor Industri Otomotif. Jurnal Akuntansi Bisnis dan Publik, 9(2), pp.60-77.

Woolhandler, S., Himmelstein, D.U., Ahmed, S., Bailey, Z., Bassett, M.T., Bird, M., Bor, J., Bor, D., Carrasquillo, O., Chowkwanyun, M. and Dickman, S.L., 2021. Public policy and health in the Trump era. The Lancet, 397(10275), pp.705-753.

Websites

Available at: https://integrated-annual-report-2020.danone.com/impact-performance/ [Accessed on: 21 st November 2022]

Available at: https://www.nestle.com/media/pressreleases/allpressreleases/three-month-sales-2020 [Accessed on: 21 st November 2022]

Available at: https://www.statista.com/topics/1439/nestle/#topicOverview [Accessed on: 21 st November 2022]

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danone.com, (2022), About Danone, Available at: https://www.danone.com/ [Accessed on: 21st November, 2022]

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macrotrends.net, (2022), Available at: Danone Inventory 2010-2021, https://www.macrotrends.net/stocks/charts/DANOY/danone/inventory#:~:text=Danone%20inventory%20for%202021%20was,a%202.47%25%20increase%20from%202018. [Accessed on: 21 st November 2022]

Nestle.com, (2020), Nestlé reports three-month sales for 2020, provides COVID-19 update

nestle.com, (2022), About Nestle, Available at: https://www.nestle.com/ [Accessed on: 21st November, 2022]

Statista.com, (2021), Nestlé - statistics & facts

wsj.com, (2022), Available at: Nestle S.A. ADR, https://www.wsj.com/market-data/quotes/NSRGY/financials/annual/balance-sheet [Accessed on: 21 st November 2022]