Investment strategic analysis

Perform a strategic analysis of Nestle, determine if the company enjoys barriers to entry. When dealing with a company that has multiple business segments, its best to look at each segment independently and evaluate if it enjoys barriers to entry. Use Nestlé’s annual report to:

1. Identify the different product segments 2. Compute the revenues and operating margins 3. Identify the different competitors by segment • Which businesses fall under Nestle? o Do those businesses have different growth rates? o What is the profitability of each business? o Which brands fall within each segment? o Who are the major competitors of each business? • How has Nestle grown over the years (organically or through acquisitions)? • Consider if and how your personal preferences change while consuming different products. Do you follow the same factors while selecting a brand of bottled water as you do while selecting a brand of coffee? How do you decide which chocolate to eat? What about the food you feed to your infant or your pet?

Following your analysis, answer this important question: - Does Nestle enjoy barriers to entry? Please justify your response.    

Sample Solution