Assurances in this regard are critical for the maintenance of brand image and reputation, and as well serve to guarantee product performance in the market Jones, 2012; Vandewaetere, 2012. Strong geographic presence, with one of the best geographically diversified revenue sources Nestlé operates and sells its products in 189 countries, reaching almost the entire world. This makes the company vulnerable to any sudden changes in consumer behavior. Nestle has also been taking into account the considerable attention towards the social contribution. Nestle is contributing a lot in promoting the economic worth of farmers by producing the products at a local level for the satisfaction of the consumer. Weakness of Nestle Less ability to provide good foods consistently: As consumers always look for good tasting and healthy foods, a company should consistently provide healthy foods.
The main driver in the food processing industry is technological innovation. This will bring a negative effect on sells for the long run. We have to consider two things while situation analysis 1. This show the very diversity in the product line which yield a great strength for nestle. The small brands to occupy same areas have to meet the low price criteria.
To sustain this success and thus maintain leadership in its market, the company must often audit and review its strategic position in light of changing factors in its business environment. With a sound financial resource base, it is prudent for the company to pursue mergers and acquisitions, which it has done quite successfully, leveraging on its competence in that regard Vandewaetere, 2012. Its more than 8,000 brands enable it to achieve this strategic focus and to compete successfully against corporate rivals Interbrand, 2013. The company has to recall some of its products almost monthly. Nestle helps provide selections for all individual taste and lifestyle preferences.
Currently Nestle operates in 12 different segments of the consumer products market, including baby foods, bottled water, cereals, candy, coffee, prepared and prepackaged foods, dairy, drinks, food service, healthcare and nutrition, ice cream and pet care. Nestlé uses recycled materials and chooses materials from renewable source whenever possible. Bagaining power of Buyers 8 4. Contaminated food recalls Nestlé is a huge food company selling tens of thousands of different food products daily. Nestlé has endeavoured to keep up through enormous investments in research and development to enhance its capability, as well as process efficiency which have enabled its successful differentiation and enhanced competitiveness Nestlé, 2013. Thus, there are many contracts between Nestlé and manufacturers, some of whom provides exclusive services for the company.
Out of 4, 643 manufacturing firms employing. This analysis is also called the internal and external strategic analysis of Nestle. Industry Size and Trends 3 2. Nestle should be keen to note the various dynamics and their impact on performance, and should develop flexibility which would enable faster response and adaptability to changes in the market Jones, 2012. There has been a global cocoa shortage due to crop diseases and aging trees.
The clothing and textile industry has been a declining industry in the Philippines since 2005. Target Group Urban middle and upper middle class Positioning Nestle is a world class company providing good quality, healthy and tasty food and beverages Product Portfolio Brands 1. Increasing trend towards healthy eating With the rise in diseases associated with sedentary lifestyles, food choices, and eating habits, there has emerged global awareness of their impacts on individual health. Nestle should follow such a maxim that accelerate innovation with the help of technological advancements. House brands are often sold at a lower price and given greater visibility on shelves.
However, every stage in its supply chain is bound to have adverse environmental impact which is a notable concern in modern industry given the drive to environmental responsibility. Share of Grocery, Petroconvenience and Route6 2. Easter is the biggest selling season and Christmas is the next best. Bargaining Power of suppliers 8 5. In the same year Nestlé Company added condensed milk to their portfolio. Threats of New Entrants Low- Moderate : As lucrative as the food and beverage industry might be there are several barriers that make the retreat of new entrants low-moderate.
John Cadbury started making chocolate in England in 1831. Economic Factors Different countries have different level of development. But some recent research showed that peoples becoming more health conscious toward their health which may be the main reason of decline sales of chocolate in future. Fortune Global 500 ranked Nestle on 11th positioning 2014, while Forbes Global 2000 list public companies gave Nestle 33rd rank in the world. Chocolate manufacturers are extensively promoting the health benefits of cocoa and dark chocolate and combining them with fruits, nuts etc.
Nestle recently has followed suit, and has launched the new chokito line, with a slightly different flavour and new exciting packaging. A strategy describes how the ends goals will be achieved by the means resources. Social Factors The shared thoughts and beliefs of the customers influence the business operations. However, the company is criticised for its weak approach and over the effectiveness of their programs Jones, 2012; Interbrand, 2013. Industry Analysis 80% The five force analysis is one of the most recognized frameworks for the business strategy. Recently, the company had to recall various prepared dishes in the U.
This can lead to high marketing costs with a questionable return on investment. Nestlé, unlike most of its rivals, does not rely on any single country or a few different countries to generate most of its revenue. Although in Australia, they operate separately, Mars is Mars- responsible for chocolate and Wrigley Company for sugar confectionary and gum range. . Strong competition by other brands means limited market share growth for Nestle Opportunities 1. Furthermore technology has enabled otter packaging of products which has boasted efficiency and reduced costs.