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Essay: Concepts of trade-offs and market forces in the Godrej and Nestle

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The Godrej Group: Introduction

The Godrej Group, which was founded in 1897, has its roots in the Swadeshi movement and Indian independence. Before finding success with a locks business, the founder, lawyer-turned-serial-entrepreneur Ardeshir Godrej, tried his hand at a number of unsuccessful businesses.

Today, 1.1 billion people worldwide support the businesses in a variety of industries, including consumer products, real estate, appliances, agriculture, and many more. In fact, as our engines now potheyr many of India’s space missions, our geographic influence goes beyond Earth.

With a sale of more than USD 4.1 billion, Godrej is expanding quickly and have exciting, lofty goals.

But for Godrej, maintaining a good company is more crucial than only having successful business operations and I-liked, innovative products. In the Godrej Group, promoters hold about 23% of the total equity.

Godrej has different business verticals like

  • Aerospace and Defence
  • Appliances
  • Chemicals
  • Financial Services
  • Food and Agriculture
  • Home and Personal Care
  • Intra-Logistics
  • Information Technology
  • Infrastructure
  • Potheyr and Energy
  • Real Estate

Trade Offs/Opportunity Cost

During the pandemic, they concentrated on providing hygiene and medical supplies where there was a need. Air fresheners and other discretionary goods did poorly. And as they all know, the supply chain has truly dominated this year, with supply suffering from unheard-of interruption. One lesson they took away from the chaos that engulfed the world was the need for more nimble supply chains and localization, particularly in nations that had been importing from China.

They require greater automation and more capital expenditure in order to manage the difficulties and seize the opportunities. And if they position ourselves they will in terms of luring additional manufacturing and creating an ecosystem around it, I believe India has a potential edge. India is ideally positioned to become the next manufacturing hub thanks to its advantageous geographic location, sizable domestic market, and expanding private sector.

I believe it’s about innovation to create reasonably priced products that may be widely dispersed and have a cheap cost of operation.

The digital ecosystem makes it possible to develop and preimmunize digital-native products that are only available through e-commerce platforms. They used bed netting, detergent capsules, and dishwasher pills to do this.

According to Godrej, household insecticides, hygiene, and value-for-money products make up 80% of the company’s product portfolio. He also noted that “many of our innovations have started playing out fully in the last couple of months and they have seen high growth in household insecticides and hygiene.”

In just a few they weeks, GCPL had sanitizer products introduced across India and SAARC, Indonesia, Africa, Latin America, and the US in response to COVID-19. “They are entering the category for the first time in many of these markets. They will now scale these up into complete portfolios with a variety of product offers, the speaker declared. “They are entering the category for the first time in many of these markets.

During pandemic they added a new product line of automated sanitisers and no contact napkins, to cope up with the covid 19 situations.

Nestle: Background

Since 1912, when NESTLÉ first started doing business as The NESTLÉ Anglo-Swiss Condensed Milk Company (Export) Limited, it has been importing and exporting finished goods to the Indian market.

Following India’s independence in 1947, the Indian government’s economic policies emphasised the importance of domestic production. In 1961, NESTLÉ established its first facility in Moga, Punjab, where the government wanted it to expand the milk industry, in response to India’s goals. The development of Moga prompted the establishment of NESTLÉ’s Agricultural Services to inform, counsel, and assist the farmer in a number of ways. from improving dairy farming practises to increase their cows’ milk production, to assisting in the acquisition of bank loans, irrigation, and scientific agricultural management techniques.

NESTLÉ established milk collection centres to not only assure fast collection and fair rates, but also to instil faith in the dairy industry among the population. Progress entailed the ongoing and sustainable production of prosperity, which resulted in the transformation of Moga into not just a prosperous and dynamic milk area today, but also a booming hub of industrial activity.

Trade Offs/Opportunity Cost

North America accounted for majority of the total sales, followed by Asia, West Europe, and Latin America. East Europe, the Middle East, North Africa, Australasia, and Africa together accounted for the remaining sales. The US, which is the largest contributing country for Nestlé’s sales, is still struggling to contain the coronavirus spread and death toll. As a result, the company’s overall sales projections in North America are negative, although the food sector is likely to provide some resilience. Latin American countries were hugely impacted by the pandemic. Five countries out of the top 11 most affected countries are from the region.

Countries in Asia, such as Japan and Philippines, among others, are also witnessing a growing number of COVID-19 cases hurting the growth prospects of the company. European countries succeeded to some extent in pulling down the curve of COVID-19 cases during June-August. However, with a decline in sales through out-of-home channels, the outlook for the company’s sales in the second half of 2020 is not so optimistic. Pasta and noodles, bakery and cereals, dairy and soy foods, other canned foods, and other frozen foods are estimated to grow across all the regions. Sectors in non-alcoholic beverages, cosmetics and toiletries, and pet care are predicted to witness a decline compared to pre-pandemic estimates.

The key product categories of Nestle are chocolate, baby wet meals, breakfast cereals, baby milks, packaged water, other hot drinks, take-home and bulk ice cream, baby cereals and dry meals, milk, and condiment sauces. Prices for several of these brands have increased, particularly condiment sauces, take-home and bulk ice cream, and breakfast cereals and milk. These may be displaying the increase in at-home consumptions in which consumers stocked up on essential commodities during the pandemic.

  • The company’s geographic and product diversification is to assist Nestlé in warding off the negative effects of COVID-19 and bounce back in the near future.
  • The company’s top-line performance is at risk of contraction in 2020 owing to COVID-19.
  • The soft drinks sector, particularly water categories, is the most affected by the pandemic.
  • Americas to drive Nestlé’s food business growth despite COVID-19 exposure.

Conclusion

Both the companies had to reduce the production of a certain product line and increase the production of some other goods which was much demanded during pandemic like the products produced by nestle were bought in bulks and stored in houses for further usage, just so they don’t need to go out too often. Products of Godrej were widely used among households to safeguard themselves from covid-19.

Significance of Selection

I have chosen the above mentioned companies as there was lot of demands of these products in the market during covid-19 as everyone was inside there homes and the consumption of daily food products was increased and also people were cautious about there health which gave the above companies opportunity to trade off their products and introduce a new product line or change the production of the one existing

Objective of the Assignment

  • The objective of this study is to know about the companies and their marketing strategies.
  • To analyse the impact of covid-19 on these companies and the challenges faced by them during the pandemic.
  • To analyse the trade-offs used by Godrej and Nestle

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