Company and product analysis

1. Sector, Company & Product
Analysis of Maggi Noodles
Semester Project
Riya Kumari
MBA 3

2. Sector Information
• 4th largest sector
• Three main segments: Food &
Beverages, Household &
personal and Healthcare.
• Sector has grown from US$ 31.6
billion to US$ 52.8 billion in
2017-18
• Rural Segment: Around 45%
revenue share.
• Urban Segment: 55%
Growth Drivers:
• Growing awareness, easier access, and
changing lifestyles are the key growth
drivers for the consumer market.
• The revenues of the sector are forecasted to
reach US$ 104 billion, by 2020.
31.6 33.3 35.7 38.8 43.1 49 57.4 68.4
83.3
103.7
0
50
100
150
Revenues(US$ billion)
Trends in FMCG revenues
over the years
2011 2012 2013 2014 2015
2016 2017 2018 2019 2020

3. Porter’s Five Forces Model
Threat of Substitutes
• HIGH – Presence of multiple brands
• Narrow product differentiation under many
brands
• Price war
Bargaining Power of Buyers
• High - Low switching cost induces
the customers' product shift
• Influence of marketing strategies
• Availability of same or similar
alternatives
Competitive Rivalry
• High - Private label brands by
retailers are priced at a discount to
mainframe brands limits
competition for the weak brands
• Highly fragmented industry as
more MNCs are entering
Bargaining Power of Suppliers
• Low - Big FMCG companies
are able to dictate the prices
through local sourcing from a
fragmented group of key
commodity suppliers.
Threat of New Entrants
• Medium - Huge investments in setting up
distribution network and promoting brands
• Spending on advertisements is aggressive

4. Company Overview
CEO
Ulf Mark Schneider
Founded
1905 by Henri Nestle
Annual Revenue
$ 90.12 B
Market Capital
$ 259.6 Billion
Profit
$7.1 B
Headquarter
Vevey, Switzerland

5. Product Profile
Beverages Milk products & Nutrition Chocolates & Confectionery
Prepared Dishes & Cooking
Aids

6. SWOT Analysis
Strengths
• Reputed brand name
• Highly diversified company
• Extensive product portfolio
• Effective R&D system
Weaknesses
• Price fluctuations by retail giants
• Social criticisms
• Maggi noodles controversy
Opportunities
• Venturing small food start-ups
• Online shopping
• Partnerships
• Market penetration for breakfast cereals
Threats
Rising competition
Government regulations and prices
Illegal rainforest destruction controversy
Water scarcity

7. Competitor Analysis
Company Market share (cr)
HUL 467,372
Dabur India 81,241
Britannia 77,827
Godrej Consumer 73,744
Marico 47,184

8. BCG Matrix
• Low growth or market
share
• Failure to deliver
expected results makes
the product source of
loss for organization
• E.g.: Nestlé's Milo
Dog
• Low growth markets
with high market
share
• Money churners,
require less
investments
• E.g.: Nestlé's Maggi
Cash
Cows
• High growth markets with
high growth markets with
high market value.
• Companies are interested
to invest in these units
further to gain a larger
market share.
• E.g.: Nestlé's Nescafe
coffee
Star
• High growth markets with
low market share.
• Industry has high
potential to grow hence
giving the room to the
products to grow.
• E.g.: Milk products,
Nutrition and chocolates
Question
Mark

9. Product Information
• Founded by Julius Maggi in 1886
• Acquired by Nestle in the year 1947
• MAGGI has started “Simply Good” initiative.
• MAGGI Noodles is a part of about 70% urban Indian households
and with more than 2.5 Bio serves that are consumed by people
every year.
• In India the Simply Good journey has started with everyone’s
favorite MAGGI 2-Minute Masala Noodles fortified with iron
which will now provide consumers 15% of their daily Iron
requirement.

10. SWOT Analysis
High brand
loyalty
Excellent
advertising
Flavours and
varieties
Distribution &
Availability
Maggi ban
controversy
Intense
competition
Can target
untapped rural
market
New flavours &
packaging
Can tie-up with
school &
colleges to
provide quick
snack
Price wars with
competitors
Strict
regulations by
government

11. STPAnalysis
• Demographic
• Geographic
• Psychographic
• Nestle targeted kids,
youth and working
women.
• Marketing taglines
were made to target
specific users catering
to their needs.
• Maggi has positioned
itself in the SNACKS
category and not in the
meal category since
Indians do not consider
noodles as a proper food
item.
Segmentation Targeting Positioning

12. Business Finance
• Direct Cost Comparison:
0.0692%
• Indirect Cost Comparison:
0.162%
Financial Ratios

13. Organizational Structure
Managing
Director
Finance &
admin
manager
Financial
Control
Legal, VAT
Manager
General
service
executive
HR
Manager
Human
resource
Executive
Cooperate
affairs officer
Training
executive
Factory
Manager
Engineering
Manager
Quality
assurance
manager
Product
Offcicer
Factory HR
Manager
Supply
chain
manager
Purchasing
Manager
Distribution
manager
Information
system manager
Customer
service
manager
Business
excellence
manager
Demand &
Supply planting
manager

14. Organizational Culture
• The culture of the company is who they are as a company, and integrity is at the
heart of that culture.
• The people at Nestle India are committed to ensure a strong environment of
compliance and integrity across the organisation
• Their values are reflected in the way they do business – always acting legally and
honestly, with respect for their own people and for those with whom they do
business
• The company promotes the highest standards across their business. That requires
a culture of integrity and respect