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Nestle’ Case StudyDate: 28th January 2017


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


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


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”


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


• 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


Analysis Of Nestlé


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


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


Porter’s Five Force Analysis For Nestle


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


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


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


Recommendations

Pricing Strategy

Promotional strategy

Distribution strategy

Point of sale merchandising

Focus on Foreign Direct Investment


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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