Step 1: Perform internal and external environmental scanning for the company.
Strengths-
1. Ability to leverage strong brand name to generate sales
2. Ability to customize products to the local market conditions
3. Strong global operations with diversified revenue base
4. Research and development capabilities
Weaknesses-
1. Increasing instances of product recalls hampering brand equity
Opportunities-
1. Transition to a 'nutrition and well-being' company
2. Focus on developing and emerging economies
3. Booming out of home eating market
Threats-
1. Compliance issue resulting in penalty payments
2. Macro economic factors
3. Allegations of unethical business activities Step 2: Strategy Formulation is developed based on portfolio analysis findings.
Nestle Portfolio Analysis-
Stars:
Prepared Dishes and Cooking Aides 16% (33% of North Amer. Frozen foods)
Cash cows:
Beverages 18%
Milk Products, Nutritional and Ice Cream 18.7%
Dogs:
Confectionery segment -11% Other Food & Beverages- 9.5%
Pet Care- 9.3%
Question Marks:
Pharmaceutical Products- 0.7%

Strategy Formulation-

Differentiation Strategy in combination with the First Mover strategy can be used to bring the pharmaceutical products; which are the question marks of their product matrix; to the point of becoming a cash cow for Nestle in the future.
Differentiation requires long-term customer relationships created out of close interaction with the sales force. Step 3: Strategy Implementation is accomplished through the use of policies, procedures and programs.
How programs, budgets and procedures are developed:
• A program is a statement of the activities or steps needed to accomplish a single-use plan. The purpose of a program is to make the strategy action-oriented.
• A budget is a statement of a corporation’s program s in dollar terms. After programs are