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Nestle Case Study

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Nestle Case Study

One of the oldest multinational businesses that is currently present in the world is Nestle. This is a company that was founded in 1866 in Switzerland by Heinrich Nestle, who established Nestle to distribute “milk food,” which is mainly a type of food that is given to the children and infants and this food was developed from powdered milk, baked food and sugar.

It has been noted that in the early days of the company, they looked to expand their brand internationally to get more opportunities such as in London. In the 19th century this company expanded into other parts of the world such as Australia, South America, Africa, and Asia.

Nestle had become the world’s largest infant formula mix maker that included powdered milk, chocolates, instant coffee, soups and mineral water. This is a decentralized organization and it is primarily responsible for the operating decisions that have to be pushed down to local units and this does typically enjoy a high degree of autonomy.

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Nestle Case Study SWOT Analysis

There is a need for proper analysis for the understanding of the rise of the company and the benefits of generating revenue for this company. The SWOT analysis was done for this company.

  • Strengths

1. Unmatched Research and Development Capability

The most unique selling point of this company is that they have a huge advantage of research and development capabilities and the total revenue of the company in comparison to the other big brands is much higher in the US dollars.

They also have the largest research and development centers and the food and beverage company in the world. This company has a superiority in research and development and the rivals of this company provide a sustainable competitive advantage and long-term success in this domain.

2. Widely Spread Offices

Nestle has a superiority in geographic nations as there are more than 189 countries that sell these products and the company has been divided into mainly three different geographic areas which are the American, Europe, Middle East and North Africa and Asia, Oceania and sub-Saharan Africa regions.

This is a company that does not rely only in one country for its sales and turnover and there are more than a few countries that are included in the sales of the company.

3. Brand Portfolio

This is a large company and the image of the brand has been protected for a long time and there are many different categories in which the company has been characterized such as the powdered and liquid beverages, milk products and ice cream, prepared dishes and cooking aids, nestle nutrition, pet care, confectionary and water.

The wide product portfolio allows customers to choose from a variety and also allows customer satisfaction and target a wide consumer segment.

4. Environmental Stability

there have been proper initiatives that are taken by the company to help in the environmental sustainability. The methods that have been adopted include reduction of waste, packaging of material to help in keeping the environment clean.

Since 1991, after they initiated a redesigning of their packaging material, they have saved 500 million kg of packaging and uses its recycled materials and chooses from renewable sources whenever it is possible. The factories of Nestle have reached zero waste production by 2016 and is one of the best policies in the industry.

  • Weakness

1. Criticism of Its Products

Over the many years, the company has been criticized for many different issues such as unethical marketing of baby formula, and claims that water should be privatized. They have also been criticized recently for the uncontrolled water usage in California, where there has been a long drought that is affecting the state.

This has provided a high amount of negative publicity that has damaged the brand reputation and has also led to consumer confidence lost and declined sales.

2. Contaminated Food

This company has sold thousands of different food products daily and there have been strict quality control measures that the company has taken up as there have been various forms of contamination that has taken place in the food.

In 2014, the company faced a major setback as 37,000 tons of contaminated Maggi had entered India and that had spoiled the brand name and reputation. There were also pieces of glass that were found and there was a need for some of its products to be recalled and that was heavy negative publicity.

  • Opportunities

1. Accurate Labelling

It has been noted that labelling of products is important as the consumers do try and choose products that have proper labeling and are free of harmful products.

There are surveys that state that 51% of decisions are influenced by labels and Nestle has a history of misleading labels and therefore, they should take this opportunity more seriously. You can use the plagiarism checker tool to check the plagiarism.

2. Material Sourcing

All consumers are becoming more and more conscious of where the food has come from and how it was grown or made. There is a social responsibility of buying ethically grown, sustainable foods that are often more important. Nestle should start sourcing more sustainable grown plantations.

3. Small Food Startups

There has been a growing number of startups that have been launched and they are looking to disbalance the food industry. Therefore, established brands are losing sales and Nestle should invest in these startups to help the company to meet future challenges.

  • Threats

1. Poor Quality Water

There are many beverages that are produced by Nestle and the bottled water products alone generate 8% of the total company’s revenue. Water is scarce and is one of the most essential elements that is required and as the demand for water is increasing the access to water is high from Nestle and that results in potentially increased production costs and therefore lower profitability.

There is a lot of criticism that this company receives over use of drinking water near communities that are drought stricken.

2. High Competition

There is a high competition that threatens to affect the company and it is a highly competitive market that consists of numerous small, large and multinational companies.

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Nestle Case Study PESTLE Analysis

There are various external factors that are examined such as political, economic, social, technological, legal and environmental factors.

  • Political Factors

There are various changes that are made in the various policies related to import, export, environmental regulations. The global scenario needs to be stable for the company to perform well and ensure that there is more provision of job opportunities for the public.

There are also some newer food regulations that have been developed and the organization must go through some proper brainstorming and extensive testing to recreate the product in newer forms and still meet customer demands.

  • Economic Factors

Cost of raw materials have been increasing and they keep fluctuating as there are various political and environmental factors that are a major challenge. The lower rise in disposable income has posed a difficulty of producing and supplying quality food for the usual price and that is a major setback in the economy of the company.

There has been an initiative taken to locally promote the brand that will help in expanding the sales and marketing of the products that will help in improving the economic activity of the company and will lead to better performance of the company. If you are looking for assignment help in the United States, consider hiring our service.

  • Social Factors

Health and health education are widespread in the world and there are many people that are becoming more and more health conscious. It is important to work towards the trend of improved health and produce products that work with sugar, sodium, and saturated fats.

The success of the company mainly deals with their ability to understand the needs of the customer, and the ability to offer high quality, competitive, relevant and innovative products.

  • Technological Factors

As there is an advancement in technology that allows real time data being proposed for water quality this also allows reliability, security and privacy of data, a contingency plan needs to be developed to avoid major mishaps while trying to expand into the digital segment.

Nestle is willing to change the way technological advancements can help in better implementation of various different portals that can help in the nutritional information and can also help in the online sales as well as information accessibility for the customers.

This will help in the increase in the sales and will also help in the inclusion of innovative ideas and dedication towards making life better for people. Nestle will also help in proving to be a trendsetter in technological advancement.

  • Legal Factors

There are many different legal factors that need to be analyzed and complied with according to the laws that are present. There is a need for laws related to health and safety of the employees, quality of products and hygiene of its products and labor laws established in different countries.

These laws will help the country to protect its image, its employees and will also help them in facing any potential lawsuits that can directly affect them.

  • Environmental Factors

Nestle does believe in sharing a zero environmental impact via its other operations. It is also aiming to reduce the use of plastic and its products and their target to make it 100% recyclable plastic in all the packaging that is used.

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Nestle Case Study Conclusion

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