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Porter`s five forces analysis for
Maggi noodles is a brand of instant
noodles manufactured by Nestle. The brand is
popular in Australia, India, South africa, Brazil,
Singapore etc. In several countries, it is also known
as "maggi mee" (mee is Indonesian/Malay/Hokkien
for noodles). Maggi noodles are part of the Maggi
family. a Nestlé brand of instant soups, stocks and
noodles. In Malaysia, there are fried noodles made
from maggi noodles known as Maggi goreng. Maggi
noodles recently introduced a new variety of its
noodles, to cater for the health conscious.
Nestlé India Ltd (NIL) offered a variety of
culinary products such as instant noodles,
soups, sauces and ketchups, cooking aids
(seasonings), etc., under the Maggi brand . Of
these, instant noodles had been NIL's main
product category in the culinary segment
since the launch of Maggi 2 Minute Noodles
(Maggi noodles) in 1982. Over the years,
Maggi noodles became a popular snack food
product in India. In fact, the word Maggi has
become a synonymous term for any brand of
instant noodles in India and Malaysia.
The Porter's Five Forces tool is a simple but
powerful tool for understanding where power
lies in a business situation. This is useful,
because it helps you understand both the
strength of your current competitive position,
and the strength of a position you are
considering moving into.
POTENTIAL NEW ENTRANTS INTO THEPOTENTIAL NEW ENTRANTS INTO THE
INSTANT NOODLES MARKET IN INDIAINSTANT NOODLES MARKET IN INDIA
Initially, Maggi noodles with its “two minute formula”
dominated the Indian noodles market.
Report published by The Economic Times on 30th
august, 2010 shows that Maggi is losing its market
share because of entry of newer entrants like
GlaxoSmithKline's (GSK) Horlicks Foodles,
Hindustan Unilever's (HUL) Knorr Soupy noodles,
Big Bazaar's Tasty Treat, Top Ramen and several
other smaller players, according to data by market
research firm Nielsen.
Others like Capital Foods' Ching's Secret and
CG Foods's Wai-Wai, Spencer’s smart choice
noodles, Aditya Birla Retail's Feasters are
notching up share.
HUL and GSK have positioned their product as
Foodles comes with the punch line of “Noodles
without the ‘No’: Available only in the multi-
grain and wheat variant, the product is being
promoted as having higher nutritional value
compared to other popular brands. The main
unique selling proposition (USP) of Foodles is
the vitamin-packed health-maker sachet that
comes with the pack.
The data shows that Maggi's share of instant
noodles, on an all-India basis, across urban
markets, has slipped consistently between
December '09 to July '10. While Maggi instant
noodles had a 90.7% share in December '09,
the share dropped to 86.5% in July '10 on an all-
A regional split of the data shows that Maggi's
instant noodles' value market share has fallen
across the east, south, north and west zones
for the same period.
Noodles war ends Maggi’s monopoly.
Manoj Menon, FMCG analyst at
brokerage firm Kotak Securities, wrote in
a report earlier this month: "Maggi faces
product substitution risk and brands like
Knorr and Foodles could potentially
impact its incremental growth. Nestle
faces a challenging competitive
environment in culinary."
Market estimates put the instant noodles
sector in the country currently at around
`1,300 crore (US$288 million) and
growing at around 15% to 20% annually.
THREAT OF SUBSTITUTESTHREAT OF SUBSTITUTES
Substitute of noodles are also products
like PASTA, SOUP,VEG CAKES which
many customers are now preferring due
to increased health consciousness.
The existence of products outside of the
realm of the common product
boundaries increases the propensity of
customers to switch to alternatives.
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the
Ease of substitution. Information-based
products are more prone to substitution, as
online product can easily replace material
Top Noodle Brands in IndiaTop Noodle Brands in India
Smith & Jones
Maggi is sold in some supermarkets, and
the logo is fairly widely recognisable
across the UK. However, they are not
nearly as popular as they are in the Far
East, India, Australia, NZ etc.
The most popular instant noodles in the
UK is Pot Noodle (a cup noodle founded
by Golden Wonder in the late-1970s).
BARGAINING POWER OFBARGAINING POWER OF
Maggi noodles faces various competitors in
market those increases the customer`s
bargaining power of customer
WAI WAI (C.G FOODS)
Knorr Soupy Noodles(HUL)
Feasters(Aditya Birla Group’s)
Top Ramen(Nissin Food Products Co.)
Big Bazaar’s Tasty Treat
Wheat is the key ingredient of the noodle block
Aashirvaad India`s no 1 atta is used.
Do not lump even after 30 mins of cooking.
noodles are pre cooked, flavored and fried.
It has 3 seasonings varieties to add to the taste buds.
Khao Peeo Khelo
Good for health
WHAT MAGGI DIDWHAT MAGGI DID
Very intelligently Maggi had taken different type of strategies to
held their existing customer and to attract new customers.
They began to repesent or promote the product in the
1. They said it is very easy to cook and tasty also.
2. It takes only 2 minutes to prepare.
3. They presented the tag line “Taste bhi Health bhi”
4. Bring different types of variety with different flavour
Maggi 2 minutes noodle`s Flavour
Chicken Vegetable Pizza Curry
Cheese Tomato masala etc
5.They target Kids, office goers,youths, working women
6. They began to make a brand image using high promotion
7. Promotional campaign in schools
8.Packing is the biggest plus point of maggi (even in different
9.Introducing a fictitious character who can connect with kids
for better recall.
10.Organizations contests, games and industrial visits for school
kids to further strengthen brand image.
11. Inviting housewives to send new innovative recipes made
from maggi and introduce rewards for them.
12. They had given enough supply to the sellers and gave them
different types of offers that made them motivated to sell the
BARGAINING POWER OFBARGAINING POWER OF
SUPPLIERSSUPPLIERSBargaining power of a brand only increase ,
when there are more availability of suppliers
for the raw materials.
The vice-versa effect takes place when there
are less availability of suppliers.
With the consideration of all the above both
the brand as well suppliers have to keep in
their mind about the quality of the product.
The Raw Materials are required:
Since these materials are readily available with a
plenty of suppliers , the bargaining power of
Maggi (Nestle) is much higher.
COMPETITION WITHINCOMPETITION WITHIN
1.Maggi instant noodles,food major Nestle’s
flagship brand that has dominated the
indian instant noodle market for nearly
three decades,is losing market share on a
monthly basis to newer entrants such
Foodles,HUL’S Knorr soupy noodles,Big
Bazaar’s Tasty Treat,Top Ramen and
several other smaller players.
2.The latest to join the battle ,business
conglomerate ITC Ltd.has decided to
take its instant noodle brand,Sunfeast
Yipee,Pan-India after tasting initial success
in South India.