Company background

Name Industries served Geographic areas served Headquarters Current CEO Revenue Profit Employees Main Competitors Nestl S.A. Food processing Worldwide Switzerland Paul Bulcke CHF 92.2 billion (2012) CHF 10.6 billion (2012) 328,000 (2012) Unilever NV, Hershey Foods, Kraft Foods, Cadbury Schweppes, and GROUPE DANONE

Nestl is the world's leading nutrition, health and wellness company based in Switzerland. It is the largest food company in the world measured by revenues. Nestl's sells baby food, breakfast cereals, coffee, confectionery, dairy products, frozen food, pet foods, yoghurt and snacks. It owns several major consumer brands such as Stouffers, Nescafe, Kit-Kat, Carnation, Nestl Water, and many others.

SWOT

Nestle SWOT analysis 2013 Strengths

1. Unmatched product and brand portfolio 2. R&D capabilities 3. Distribution channels and geographic presence 4. Competency in mergers and acquisitions 5. Brand reputation valued at $7 billion

Weaknesses
1. Inability to provide consistent quality in food products 2. Weak implementation of CSR

Opportunities
1. Increasing demand for healthier food products 2. Acquiring startups specializing in producing well-being products 3. Establishing new joint ventures 1. 2. 3. 4.

Threats
Food contamination Trend towards healthy eating Growth of private labels Rising raw food prices

Unmatched product and brand portfolio. The business offers one of the widest portfolio of food and brewery products in its sector. It also operates 29 brands that earn more than $1 billion in annual revenues. With more than 8,000 products it is hard for any other corporate to compete against Nestl. R&D capabilities. Nestl invested more than $2 billion in R&D in 2011. Its introducing new and redesigned products every year, strengthening firms competitive advantage. Distribution channels and geographic presence. Nestl runs in more than 100 countries and has extensive distribution channel all over the world, which supports its operations globally. Competency in mergers and acquisitions. Over the years Nestl has been forming successful partnerships and acquiring other companies in order to grow and maintain its leadership in the market. Brand reputation valued at $7 billion. Nestl is known almost everywhere and has a reputable brand for its products that are used by millions every day.

Weaknesses
1. Inability to provide consistent quality in food products. Nestl has been recalling many products from trade due to food contamination or poor quality supplies. This does not only hurt firms sales but its image as well as the business is unable to control quality of the products. 2. Weak implementation of CSR. The company has announced and is involved in many programs that aim to make company more eco-friendly and improving the working conditions of its suppliers. Still, Nestl receives a lot criticism over the effectiveness of its programs.

Opportunities
1. Increasing demand for healthier food products. The trend of buying and consuming only healthy food products is a major shift in consumer tastes and opens up an immense market for companies. Currently, Nestl tries to introduce more healthy food products in response to the trend. 2. Acquiring startups specializing in producing well-being products. Many new startups are forming and introducing new products for well-being or revolutionizing the ways those products are made. Startups are cheap and can easily be acquired. Nestl is focusing on providing more well-being products and this is a great opportunity to expand its portfolio.

3. Establishing new joint ventures. Nestle is already involved in many successful partnerships with major world companies like The Coca-Cola Company and Colgate-Palmolive.

Threats
1. Food contamination. Although it is Nestles responsibility to run thorough quality checks of its products, the company had been reportedly providing contaminated food or other products to the market. Such actions hurt companys reputation and result in losses. 2. Trend towards healthy eating. Nestl is a major supplier of chocolate and chocolate drinks that have high level of calories and due to changing customer habits, will experience decline in demand. 3. Growth of private labels. The growing number of supermarkets and other retailers are introducing their own label products that cost less and can easily compete with Nestls product portfolio. 4. Rising raw food prices. With an overall growth of world economy and population, the demand for raw food will rise. The result of that will be higher material costs and squeezed margin for Nestl.

Nestle Ltd

Parent Company

Nestle Ltd

Category

Food Products

Sector

Food and Beverages

Tagline/ Slogan

Good Food, Good Life

The biggest health and wellness brand in the world, top brand in USP Fortune 500 list

STP

People looking for premium quality, and branded products like foods, Segment dairy products, baby food, pet food, confectioneries, etc.

Target Group

Urban middle and upper middle class

A world class brand providing good quality, healthy and tasty food and Positioning beverages

Product Portfolio

1. Milkybar 2. MilkMaid 3. Everyday Dairy Whitener 4. Nescafe 5. Maggi Noodles 6. Kitkat 7. Bar One Brands 8. Polo

SWOT Analysis

1.More than 140 years in the industry 2.World biggest brand, top brand in Fortune 500 list 3. Global reach with presence in over 86 countries 4. An employee strength of around 328,000 people worldwide 5. Wide product range including baby food, pet food, dairy products, confectioneries, pharmaceuticals, beverages, etc. 6. Popular brands owned like Maggi, Haagen-Dazs, Boost, Kit Kat, Nescafe, etc. 7.Largest R&D network facilitating continuous innovation 8.Strong supply chain network 9. C.S.R. activities for rural development, environment protection, water conservation,, etc. 10.Mergers and acquisitions and joint ventures to increase market share 11. Strong marketing and advertising power Strength 12.Strong brand loyalty and brand recall

Weakness

1.Being a big global brand, Numerous controversies in different countries of operation can cause issues

2.Strong competition by other brands

1.Introduce more health based food products to tap the health consciousness amongst consumers 2.Expand with focus on developing economies 3.Continue with acquisitions and joint ventures to increase its market share Opportunity 4.Try to capture the rural markets

1.Failure of the complex supply chain 2.Economic instability and inflation in most countries 3.EURO zone crisis, as most of its revenue comes from Europe 4.Increase in cost of raw materials Threats 5.Stiff competition in all product segment

Competition

1.Unilever 2.Kraft Foods 3.Sara Lee 4.Danone 5.Mars Incorporated 6. Hersheys Competitors 7. Parle