Nestle Analysis

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Nestle Analysis

  1. 1. Yaprak Angay Selim Erim Mehmet Avşar
  2. 2. CONTENT • • • • • • • • • • • General Information Vision & Mission Environmental Analysis SWOT Analysis Organization Porter’s 5 Forces Business Level Strategy BCG Matrix Competitive Advantages/Core Competency Social Responsibilities Ethics
  3. 3. General Information • Nestlé is a Swiss company, founded in 1866 by Henri Nestle. • World’s biggest Food and Beverage Company. • Approximately 254,000 people working. • Operating in more than 70 countries.
  4. 4. Vision-Mission VISION • “Nestlé's aim is to meet the various needs of the consumer everyday by marketing and selling foods of a consistently high quality.” MISSION • “ We strive to bring consumers foods that are safe, of high quality and provide optimal nutrient to meet physiological needs. Nestle helps provide selections for all individual taste and lifestyle preferences.”
  5. 5. Environmental Analysis Economic trends • Most countries all over the world are affected by the global economic crisis • Economic fluctuations in the world • Economic development of countries • Exchange rate
  6. 6. Environmental Analysis Technological trends • Most of latest technology (in researching, producing…) • Developing production systems • Technological developments in supply chain management&logistics Global trends • Improving import&export in the world • Accessibility to products easily
  7. 7. Environmental Analysis Political/Legal trends • More countries join WTO: allow more free trade across the nations. • Government controls and certificates in food and beverage industries Sociocultural trends • The world people care more about their health, especially with foods and beverages. • Concern about recycling
  8. 8. SWOT ANALYSIS STRENGHTS •Very long history (over 140 years) •Operated factories in 77 countries (all six continents) •Distribution channels and geographic presence WEAKNESSES •Inability to provide consistent quality in food products •Weak implementation of CSR •Limited presence in organic food •Established many acquisitions •Slow growth rate of chocolate&dairy products •Brand reputation valued at $7 billion •Not as successful as they thought they would be in some market (i.e. France)
  9. 9. SWOT ANALYSIS OPPORTUNITIES • Acquiring startups specializing in producing wellbeing products •Continuous growth in US coffee market • More request to establish joint ventures THREATS • Many competitors • Trend towards healthy eating • Growth of private labels • Rising raw material prices in some periods
  10. 10. Organization • Nestle is organized in a matrix system, by products and geography. • Products – in terms of the business units -They define the strategy of each of the products -EG: Ice cream, coffee, nutrition (infants), etc. • Geographies – The businesses have their central head unit - Zone Europe, Zone Americas, Zone Asia/Oceania/Africa
  11. 11. Organization Chart
  12. 12. Organization • The matrix structure serves Nestlé well • For a global organization, the ability to organize around geographical markets and also around products is an advantage • It has a manager in charge of a product line, but each product line is also coordinated with a manager in charge of a specific geographical area
  13. 13. Porter’s Five Forces THREAT OF NEW ENTRANTS • Food Industry large & competitive • Companies enter this market every year in attempt to gain a portion of profitable market • Nestlé has been around for over a century • Its long history, product quality, consumer satisfaction allowed Nestlé to obtain a considerable share of the market • New entrants should capture a portion of Nestlé's Market to survive
  14. 14. Porter’s Five Forces THREAT OF SUBSTITUTE GOODS • Nestlé is surrounded by the threat of substitute goods • Wide range of similar products that compete directly with Nestlé • Competition is fierce • Nestlé’s responsibility to improve its products • Nestlé focused on health and wellness in order for its products to stay competitive.
  15. 15. Porter’s Five Forces BARGAINING POWER OF SUPPLIERS • Creates and maintains positive relationship with its suppliers • Nestlé holds large purchasing power • Nestlé holds more bargaining power than its suppliers • The company prefers Long-term relationship with its suppliers which ensures quality of products • Offers advice to suppliers on how to perform more effectively and minimize cost
  16. 16. Porter’s Five Forces BARGAINING POWER OF CUSTOMERS • Customers have large amount of power in regards to Nestlé’s products consumption • Nestlé’s understands the power of customers and has taken specific steps to meet their needs • Society is more health conscious---Nestlé is incorporating health and wellness in its products.
  17. 17. Porter’s Five Forces COMPETITIVE RIVALRY WITHIN THE INDUSTRY • Nestlé is a powerhouse in the Food Industry • They are in constant and continuous battle to outperform one another • These companies spend hundreds of millions to appear more desirable. • Companies continue to strive in order to stay competitive but consumer will continue to enjoy ever- improving products.
  18. 18. Business Level Strategy Nestlé business-level strategy is integrated cost leadership/differentiaton. • Wide range of products (over 20 categories: coffee, milk, mineral water, pet foods, cereals…) • Low cost operators
  19. 19. Product Differentiation
  20. 20. BCG Matrix • STARS Nestle beverages • CASH COWS Baby food products • DOGS Pharmaceutical products • QUESTION MARKS Breakfast cereals
  21. 21. Competitive Advantage • • • • Innovation R&D capabilities Sufficient experience Workforce
  22. 22. Core Competency • Different types of tastes are combined to create new products.
  23. 23. Social Responsibilities
  24. 24. Ethics
  25. 25. Ethics
  26. 26. Ethics
  27. 27. Ethics
  28. 28. THANK YOU FOR ATTENDING!
  29. 29. References • • • • • http://www.ukessays.com/essays/marketing www.nestle.com www.nestle.com.tr http://mamminurture.com/25-reasons-to-boycott-nestle/ http://www.nytimes.com/2013/02/20/world/europe/nestle-pulls-2products-in-horse-meat-scandal.html • http://www.nestle-family.com/ourcompany/english/assets/downloads/The-World-of-Nestle.pdf • http://sustainable-stella.blogspot.com/2013/02/the-horse-meatcontroversy.html

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