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Goh Zhao Dick

on 5 December 2013

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Transcript of NESTLE

Nestle's Background
Founder : Henri Nestle
Competitive Strategy
Focusing on R&D
Develop unique and superior value products
Example: Nespresso
Founded : 1886 year
First product : Baby Formula, named "Farine Lactee"
S.W.O.T analysis
Strong R&D capability
Mergers and acquisitions and joint ventures
Strong marketing and advertising power
Strong brand loyalty and brand recall
Efficient distribution networks
Thank YOU !
I give you all a clap for being a good listener :)

Grand Strategies
Growth Strategies
1)Research & Development (R&D)
Expand their coffee factory in China
Build a R&D center in Singapore
Innovation in frozen and chilled product at US
Open a new coffee center in Philippines
2) Rural Development Framework (RDF)
Invested a large amount of money to the new Nestle bottled water industry in UK
Yunnan's government has decided to invest to the Nestle Coffee Centre
To overcome the identified Weakness and Threats
To enhance the identified Strength and Opportunities
Market Expand & Control


Old fashion & Convenient

Land explores

Power Advertising
Four Competitive Advantages
* Numerous controversies

* Food contamination or low quality supplies

* Complex supply chain
* Healthy food products

* Economics for recent years show stable growth

* Rural market
* Economic instability and inflation

* Threat to EURO currency

* Increment of demand for raw food

* Current trend of living healthy

* The growth of private labels
• Unmatched product and brand portfolio
- Ranges from global icons to local favorites
• Unmatched research and development capability
- Clear priorities, focused on innovation and renovation, made relevant and attractive for consumers
• Unmatched geographic presence
- Deep understanding in many countries
- Thus, strong relationship between brands and consumers
• People, culture, values and attitude
- Creating value for society as a whole

Porter's five forces model
Threat of New Entrants
Leader of market
Quality products and consumer satisfaction
Big challenge for the new entrants
Bargaining Power of Suppliers
Large purchasing power
Holds more bargaining power than its suppliers
Strong and positive relationship
Product that is far from unique
Bargaining power of Buyers
Consumers have a large amount of bargaining power
A lot of substitutes products and competitors
Quality has been maintained
Threat of substitute Products
Afflicted with the treat of substitute products
Arrays of similar products that compete directly
Find new ways to improve
Generate new sources of growth
Rivalry among Competitors
Few major rivals do exist
Fighting continuously to outperform one another
Achieved significant improvements
Conclusion for Competitive Strategy
Cost leadership (may need to sacrifice the product quality)

Differentiation Strategy (can maintain as a market leader)
* In 2011, Nestlé successfully delivered its Model of financial performance

* Two major partnerships in China

* Significant investments in Russia, India and many African and Latin American countries.

* The winner of the 27th World Environment Center (WEC) Gold Medal award for its commitment to environmental sustainability

* Nestlé Bottled Waters Industry was able to critically audit the old site to establish where improvements could be made with help from experts in lean production

* Using locally sourced materials improved the economy and brought employment
- Cost of production

- Gain more loyalty consumer

- Management

Quality control

- Imaging

Legalism over employment
Gain more loyalty consumer
- To cope with private labeling

-Multinational Company
Avoid controversies
Hold more interaction event and give out more inspirational talk or training to employee to build a good personality.
Quality control
- Improve quality control

- Weak CSR plan

Legalism over employment
- Scandal over under age employees
1. Market Expand & Control -Joint venture and M&A

* Expand their market control by jointing venture with more food & beverage companies

* Pour in more fund to carry M&A plan

2. Branding - People knows about Maggi but how about Nestle?

* 1 Malaysia? What is the purpose of setting up 1 Malaysia shop?

* Help people? Promote its 1 Malaysia culture?

* Nestle should also set up a very small shop , a new concept shop to sell only Nestlé’s product as they have many type of products

* Promote their company

* When you think of our current Prime Minister think of 1 Malaysia.

* When you think of food think of Nestle

3. Old fashion & Convenience -Set up a mobile shop

* For people who don’t venture out for snack.

* World Cup (promotion? Forget to buy your snack? )

* If the feedback is good then this plan can be carry out

4. Land explore - Having own land to produce raw material. -NEWS about African’s land is being explored by Nestle

5. Power Advertising -Maggi is not only a food; it’s a part of MALAYSIA.

* Produce raw material by own self?

* Africa has a large piece of land

* Long term investment
Cost of production
- Instead of hedge inflation by increasing the price, why don’t? :
Employ legally by following the rules and policies
Reinforce the implementation of CSR
Replace a new material
Set up more check up central to ensure product is secured and safe to eat
Why other company can't compete with price of Nestle? Price War?
R&D on more cheap and daily product like bread.
A branded and an unknown product with the same price, which will be your choice?
Full transcript