Assessment of Nestlé Company

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NESTLÉ COMPANY
Nestlé is a known company that manufactures various food products. As a multinational company, its headquarters are located in Switzerland with factories operating in more than 80 countries worldwide. Nestlé company has a rich history which began in 1866. The Nestlé company's foundation can be traced back to 1905 as two companies merge – the Anglo-Swiss with Henri Nestlé. The main products produced by the company include milk that is powdered and condensed, instant coffees, foods for the baby, condiments, seasonings, candies, chocolate products, etc (Nestlé, n.d.).
This study is conducted to know the potential impacts of COVID-19 on the company. This paper also examines the consequences of the pandemic. These consequences can lead to how such a situation can be avoided and mitigated in future occurrences. Future developments can be established based on the findings as well as the challenges and opportunities. Moreover, this analysis can serve as a basis for other companies to manage their operations.
Though decline is observed during the first quarter, Nestlé company maintained the growth in its sales by strengthening the segments that are highlighted in the new normal. It was noted that there was a disruption in the supply chain. However, the pandemic's impact has also led the company to have an increase in their sales as consumers relied extensively upon their known and trusted products to store at their homes.
IMPACT OF COVID-19
In general, COVID-19 has a devastating impact on all aspects of our lives. Due to the rapid spread of the virus, most countries, if not all, have imposed strict rules and regulations on lockdowns and quarantine protocols. People were left with the new normal of working at home while other companies had resulted in laying off of their employees due to the lack of income and budget. Several companies have greatly affected, mostly with negative impacts. One of these companies that have been impacted with COVID-19 is Nestlé company.
According to Research and Markets (2020), the compound annual growth rate (CAGR) of the global food and beverage stores market is expected to decline by 0.4% due to the economic slowdown brought by the COVID-19 pandemic. However, it is predicted that companies' understudy will recover from 2021 to 2023 with a growth rate of 6%. Nestlé SA is among the companies being featured (Businesswire, 2020).
During the early part of 2020, the manufacturing amenities of Nestlé in India were also suspended temporarily due to rising cases of COVID-19 in the country. However, such suspension excluded essential products, which include water, coffee juices, tea, and beer. Nestlé operations that were halted include manufacturing, warehouses, distribution centers, suppliers, and offices. Nestlé India announced this through a BSE filing. During early March, it stated that the Nestlé company is closely monitoring the situation and halted its operations in compliance with the national government and authorities' instructions. It assured that necessary steps will be undertaken once assessments will be made (Research And Market, 2020).
According to reports, it can be observed that the Nestlé company was able to cope with the outbreak of COVID-19. During the second quarter of the year, Nestlé India described the pandemic's outcome as not being “materially adverse” on its business operations. Moreover, the pandemic has not caused the company to experience any problems or challenges regarding its financial resources or capital. There were no observed significant changes in its profitability as brought by the consequences of the health crisis. In June, a subsidiary of Nestlé SA, Nestlé India, stated that the company possesses a “strong cash position” in meeting their financial commitments, thus putting the company in a comfortable liquidity position. This has led the company to resume its operations in its manufacturing and distribution warehouses (Pti, 2020).
As a result of the COVID-19 pandemic, the demand for Nestlé products has increased. This can be mainly observed during lockdowns, which led people to buy and stock foods at their homes. Meeting these increasing demands has become a challenge for the Nestlé company. As the world’s largest food and beverage company, Nestlé c...