Nespresso targets high-end customers aged 35-49 by selling premium coffee using an exclusive business model. It operates boutique stores in upscale shopping areas and uses celebrity endorsements and magazines to market the Nespresso brand as stylish and high-quality. While Nespresso faces threats from substitutes and new entrants now that its patents have expired, it continues to innovate and focus on customer demands to maintain its niche in the coffee capsule market.

1. Arber Ymeri

2.  good research for café segments
 the fancy image
 the boutiques
 sustainable innovation for quality
 machine and design (stylish coffee machines )
 Independence from Nestle (independent strategy)
 high quality coffee and fabulous marketing

3.  Nespresso system (focusing on roast and ground coffees)
 Nespresso select the attractive customer segments
◦ Men and women aged between 35 & 49
 Nespresso targets high end customers precisely
◦ Single customers
◦ Restaurants
◦ Offices

4.  No mass supermarket channels
 Nespresso established
◦ Boutique stores
 in 2010, 215 boutiques worldwide
 Boutiques locate in the exclusive shopping streets
◦ Tele-ordering
◦ E-commerce web sites
◦ Nespresso club for its customers
 Club members receive information , advice and tailored
services

5.  George Clooney as “ brand ambassador”
 The slogan, ‘’Nespresso, what else’’
 Stylish magazine for high-value customers
 The other media
◦ Television
◦ Print and outdoor advertising
◦ Celebrity endorsements
◦ Websites like facebook
◦ Smartphone apps.
 Nespresso launched several ecological friendly innitiatives

6.  The success of the business relies on
◦ different organizational process,
◦ different business culture and
◦ Mindset
 the company retains its complete autonomy form
Nescafe organization

7.  Nespresso did not set out to make a profit on the
machine sales
 seeing instead the machine purchase as the essential
first step in selling the consumer more Nespresso
coffee

8.  Nespresso pays attention to demands of customers
 Nespresso continued to invest into call centers and
coffee specialists

9.  Nespresso is unique
◦ They were the first ones to introduce coffee in capsules
◦ Offer the best quality coffee in the shortest time possible

10.  Bargaining Power of Suppliers
◦ Relatively low
 Bargaining Power of buyers
◦ Is low
◦ Customers can rarely negotiate prices
 Substitutes
◦ many substitutes for Nespresso coffee
 such as instant soluble coffee or other brands of coffee
 Threat of new entrants
◦ many companies would produce capsules suitable for Nespresso
Coffee machines because there are not any patent restrictions
 Intensity of competitive rivalry
◦ Many competitor are in this industry
◦ They seek to produce similar capsule for Nespresso

11.  In 2012 the patents for its branded coffee system
expired
 other entrants into this market because there are not
any patent restrictions
 Nespresso now needs to compete for it's business in
new ways because other companies are producing
coffee for it's unique system

12.  To expand in cities where there are two habits;
◦ The habit to appreciate the coffee and
◦ The habit of shopping
◦ E.g. the middle East
 Development and innovation
 Reenter the coffee machine market
◦ creating a new and innovative machine