Different issues in implementing the selected strategies for the following areas

 Management
1. The company continued to deliver efficiencies in the R&D area which primary focuses on
freeing up resources to reinvest in growth opportunities and innovation. With this to be done,
they have simplified the organization structure to ease the decision making process and
responsiveness to new customer trends.
2. There were three directors added in the Board of Directors. These directors are bringing
highly relevant skills, experience and expertise as leaders of consumer-facing company.
Though it is, in fact, a great asset for the company to have such directors, bringing new
directors in the same year will have an effect on the board’s perspective in decisions making
as well as being new to the position will add to the factors.
 Operation
Through the different strategies implemented to improve the quality of the products for the
customer, the company has flourished more than the previous year but they also have experienced
different problems along the way.
1. The company have minimized the amount of inventory maintained during the end of the year
compared to the previous one but they were not able to prevent the losses and write-downs in
inventory caused by impairment of the assets as well as the scraps and wastes during the
production.
2. The company provided contingencies and provisions for potential labor litigations as they are
exposed to this kind of uncertainty.
3. Provisions constituted by onerous contracts and various damage claims having occurred
during the year but not covered by the insurance companies. This results from termination of
contracts or supply agreements as the cost to meet exceeds the benefit expected to be
received.
 Finance and Accounting
1. There has been a change in the presentation in the income statement of the company because
some costs previously reported under marketing and administration expenses have been
reclassified to research and development expenses and distribution expenses.
2. Interpretation of the standard with research and development costs subsequently recognized
as an asset as it qualifies with the recognition criteria set in the standard. Development costs
are generally charged to the income statement in the year in which they are incurred due to
 uncertainties inherent in the development of new products because the expected future
economic benefits cannot be reliably determined.
3. Some costs previously reported under marketing and administration expenses are reclassified
to research and development expense and distribution expense and the costs of returned and
damaged products, and maintenance and other costs of trade assets previously reported under
marketing and administration expenses have been reclassified to cost of goods sold.
which were made to align with the function of the expense.
 Marketing
1. To expand the market and product offerings for coffee lovers, they have acquired the
perpetual rights to market, sell and distribute certain Starbucks’ consumer and foodservice. It
excludes Ready-to-Drink products and all sales of any products within Starbucks
coffeeshops. This required them a huge amount of outlay to be able to acquire such.
2. Adaptation in the digitalized and online shopping marketing scheme.
3. Created efficiencies in marketing and such savings are reinvested in building their brand.
 Research and Development
1. In new researches and developed products, they have to be cautious and comply with high
standard policies and controls to prevent serious food safety and compliance issue that could
have a negative effect on their reputation and brand image.
2. They have invested a large amount of money in research and development which results are
expected to manifest 5 years or longer from now.
 Management Information System
1. Management Information System is an intangible asset with finite useful life of only 3 to 8
years which will require renewal after such period and will require an outflow from the
company.

Sources:

https://www.nestle.com/investors/annual-report

https://www.nestle.com/sites/default/files/asset-
library/documents/library/documents/annual_reports/2018-annual-review-en.pdf

https://www.nestle.com/sites/default/files/asset-
library/documents/library/documents/corporate_governance/corp-governance-report-2018-en.pdf
https://www.nestle.com/sites/default/files/asset-
library/documents/library/documents/financial_statements/2018-financial-statements-en.pdf