Why Nestle opted for abrupt CEO Change?

The news of Mark Schneider, the recently ousted CEO of Nestle, is the talk of the business world as the only one who led the world’s biggest food maker through the hardship of COVID-19. He is
one who was able to pull off a historical organization and grow the business profit margins despite a subsequent supply chain collapse. This is why his expulsion becomes the talk of the town, decides to have several significant achievements he is ousted, and let’s take a deep delve into the same.

There are different reports proposed on various platforms as to why he was expelled. A Report supported that the expulsion was after the board of Nestle became increasingly only concerned
about the weak sales growth in the past few years and a stooping market share price for Nestle stocks because of the same.

Was Sluggish Sales Volume Growth the core reason for expulsion?

The Board thought that Nestlé had slower product development as compared to its competitors as the new and revamped products took longer to be ideated, implemented, and rolled out in the market which in turn affected their sales growth.

Bernstein analyst Bruno Montyene added that two years ago the CEO could do nothing wrong but now this scenario has changed such that whatever he is into; is getting in the wrong position. He also focused on the Market price of Nestle’s stock which has slipped 30% since the
pandemic from the year 2022. He also remarked that all these could not be considered as a goodreason to break up with a CEO who has performed well during his tenure and handmade significant
efforts in the growth of Nestle.

Schneider at the age of 58 in the year 2017 became the first outsider in the company to lead the maker of KitKat bars and Nescafe coffee in nearly a century. During the initial years, he changed the executive board to align with a new geographical structure and another noticeable
fact is that the stocks of nestlé had hit the highest price during the initial years of his appointment.

Schneider helped Nestle to grow from 16.5% to 17.3% in 7 years when rivalries like Pepsico and Unilever were not able to sustain operating margin growth. This could be seen as a
remarkable achievement as the industry was hit during the pandemic very badly. But the board was concerned about sluggish sales growth in volume and underinvestment; as these issues have been raised frequently with various analysts and investors.

In conclusion, it is evident that the remarkable achievements of CEO Mark Schneider were over powered by a few significant problems like sluggish sales growth as compared to its competitors after hiking the stock price of various companies including that of its competitors like Unilever and PepsiCo followed by a drop in market price which arose in the past yearsS