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TRANSCRIPT
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Nestle’ Case StudyDate: 28th January 2017
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Contents
• Nestlé Overview • Nestlé Competitors • Brief Summary of the Case study• Analysis of the Nestlé
– SWOT Analysis– Porter’s five force Analysis for Nestlé
• Alternatives available • Choosing the best alternative • Recommendations• Conclusion
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Nestlé Overview
• Nestlé began in Switzerland in 1867 when Henri Nestlé, a pharmacist launched his product (Nestlé’s Milk Cereal)
• Nestlé is a nutritious gruel for children• Now Nestlé sells baby food, bottled water,
cereal, chocolate and other confections, frozen food, dairy, drinks, health and sports nutrition, pet care
• Nestlé is today the world's biggest food and beverage company and employs 339000 people, operates in 194 countries
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Nestlé Competitors
• Kraft Foods: “Helping people around the world eat and live better”
• Unilever: “Feel good, look good and get more out of life”
• General Mills: “Breakfast of Champions”
• Groupe Danone: “Bringing health through food to as many people as possible”
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Brief Summary of the Case study
• Nestle as a company has a vision to be the world’s recognized leader in nutrition, health, and wellness
• And so, the firm grew rapidly through mergers and acquisitions and geographical expansion
• Targeted strategic acquisitions were followed in infant formula, coffee, canned and frozen foods, bottled water, ice cream, and pet foods
• Their goal was to achieve worldwide sustainable competitiveness through four “strategic pillars” in 1997
• Their research and development (R&D) program was restructured to be consumer-driven with continuous renovation and innovation
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• Their products were made affordable by producing locally and using less packaging
• Initiation of GLOBE, was a revolutionary step that brought important insights into both the production and the selling sides of Nestlé’s business
• The company followed a Strong Personal Culture
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Analysis Of Nestlé
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SWOT AnalysisStrengths• Provide high quality
products at the lowest cost• Universal availability of the
products• Initiation of GLOBE• A Strong personal
decentralized culture• Reinvigoration of existing
brands• Strategic acquisitions
Weakness• Lack of ingredients
information • Complacency• The joint venture of Nestlé
and General Mills has restricted Nestlé to be innovative
• Feasibility of new products needs to be deeply analyzed
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Opportunity• Lay more emphasis on health
based products• Encourage research projects
with transformational ability• Continuous up-gradation of
products• Provide incentives to the
retailers to increase their sales volume
• Right time to increase production rates to meet consumer demands globally
Threats• Market segment growth
could attract new entrants• Increase in volatility in the
farm prices• Increase in uncertainty
among the farmers• Economic slowdown• Existence of large
competitors
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Porter’s Five Force Analysis For Nestle
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Alternatives in solving these issues
Product Solution:Nestlé's ongoing strategy is to develop a 'Wellness' approach that builds on its tradition of producing nutritional products. So Nestlé's Wellness strategy must include:
– E - (Environment) Match the strategy to the Environment in
which the business operates
– V -(Values) Ensure the strategy is consistent with the
organization's Values
– R -(Resources) Ensure the company has the necessary resources
to strategize its operations
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Public Relations Solution:• Nestlé’s approach of eco-efficiency,
sustainability and the policy towards
the use of water projects company’s
desire to ensure a better life for all
Joint Ventures Solution:• Joint ventures allow the
companies to share their
resources and capabilities to
gain a lucrative competitive
advantage
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Choosing the best alternative
The following categories need to be addressed in order to provide the best possible solution:
Product: Meeting consumer expectations
Maintain a consistent standard
Improve quality control
Ensuring an affordable yet
healthy product
Marketing: Invest more in advertising
Invest more in public relations
Be transparent with product
values Be actively involved in fund raisers and charitable institutions
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Recommendations
Pricing Strategy
Promotional strategy
Distribution strategy
Point of sale merchandising
Focus on Foreign Direct Investment
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Conclusion
With global retailers such as Wal-Mart and Carrefour continuing
to grow larger and more powerful and consumers around the
world are having access to more sources of information than
ever before, it is very important for Nestle to sustain their
business in the long run and achieve their vision of becoming the
world’s recognized leader in nutrition, health, and wellness.
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