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Assuming there are infinite machine hours, which product line should be focus of the manufacturing

Question 1 – Strategic Management You have been asked to prepare a report on the future strategic positioning of Nestle Australia Ltd. Areas you need to address include:

1. A brief overview of the nature and history of the firm together with the firm's current strategic priorities

2. A detailed overview of the firm and its environment using the Porter's Five Forces Model

3. Using Porter's generic strategies, what strategy would you recommend for the firm going forward? This recommendation should be detailed and make specific reference to the firm's product lines and geographic segments.

4. Potential financial and non-financial measures the firm could use to evaluate the success of your recommended strategy. It is suggested that you provide around five measures and these measures should be clearly linked to the different components of your strategy recommendation . Using APA referencing, this report must be supported by reference to a range of relevant academic and other research sources.

Question 2 –Product Mix and Tactical Decisions Nestle Australia Ltd produces Milo powders in a variety of tin and refill bag sizes. The following discussion presents hypothetical information in regards to the production of these products. This information assumes that these product lines are manufactured on the same production line:


1.Assuming there are infinite machine hours, which product line should be the focus of the manufacturing efforts? Why?

2.Assuming that production was constrained by machine hours, which product line should be the focus of the manufacturing efforts? Why?

3.Assume that 55 million machine hours are available each year. How many of each product line should be produced?

4.Assume that the firm was considering ceasing production of the 730g refill bag variety. The freed up machine hours from ceasing production of 730g refill bags will be devoted to the production of other Milo varieties. On financial grounds, should the proposal be accepted? Identify and discuss strategic and environmental considerations that the firm should consider in the evaluation of this proposal Ensure that your answers for the above are discussed and supported by relevant calculations/workings.

Question 3 – Linear Programming Nespresso manufactures a range of Original Coffee Machines. The following presents hypothetical information in regards to this line of products. The production manager would like your assistance to identify the optimal production mix. Below is an estimation of the costs to manufacture these products.


1.Using Excel Solver, formulate a linear program to determine the optimal production mix which ensures that the maximum contribution margin is obtained.

2.Discuss your results and suggest possible ways in which the firm could improve their contribution margin in light of the Solver analysis. Provide financial information to support your recommendations.

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