SWOT Analysis of Nestle – Its Development and Research Capabilities
Nestlé is one of the strongest companies in the world when it comes to the consumer goods market. Nestlé coffee is almost a cash cow for Nestlé, just like Maggi !! There are many brand items in Nestlé that are very popular. Here is the SWOT analysis of Nestle.
Strengths of Nestlé’s SWOT analysis
Weaknesses of Nestlé’s SWOT analysis
Opportunities in Nestlé SWOT Analysis
Threats in Nestlé’s marketing strategy
SWOT Analysis of Nestle
Strengths of Nestle – SWOT Analysis of Nestle
Unmatched development and research capability:
Nestle is successful because of its development and research capabilities, which is a significant advantage. Almost 1.678 billion dollars spending on R&D by the company in 2015, and the total revenue was nearly 1.89%. In comparison, all other competitive companies used 0% on R&D and income, and Nestle spent almost 1.25 on R&D or revenue.
Powerful geographic presence, best and diversified geographic revenue sources:
Nestle sells its products in almost 189 countries, covering virtually the world. The operating segment of the company has been divided into three geographic areas. Europe, Americas, Africa, Asia, Middle North, East Africa, and Oceania. Not even one of these regions earns 50% of total revenue. It does not even rely on a few countries for its revenue. The USA is one of the best countries for companies; it generates 28.5% of total revenue. While on the other hand, other companies earn 46 and 56% of revenue from the US. US market is negatively affected by the geographic distribution, but Nestle is strong because of this distribution. In China, the revenue percentage is 8. However, in France, the percentage revenue is 5.5. In Brazil, the percentage revenue is 4.4. Moreover, in all other countries, the total percentage of revenue is 50.3%.
Unrivaled brand and product portfolio:
The product portfolio of nestle is much more comprehensive than all of its rival companies. The company offers almost 200 plus products, making it easy for customers to choose from. The products distribution is in seven categories which are below.
Liquid and powdered beverages:
It include the brands of Nescafe Dolce and Nescafe, Nestea and Nespresso.
Dreyer’s, Movenpick, and Nestle offer ice creams and milk products. They also provide cooking aids and prepared dishes. They supply health products also which give strength to the body.
The brand has products for pets too.
With the beverages, you can get simple water too. So, they offer a different variety of products.
The portfolio is extensive, so consumers’ needs can easily be satisfied. It helps the brand a lot even when people’s taste is changing.
Efforts for environmental stability:
Nestle company is proud of itself because of its sustainability. The company is trying its best to keep the environment clean by reducing waste material, and they also use recycled packaging material. The company saved many million kilograms of material packaging by using other things. They are choosing renewable material sources and using those materials that are recycled to protect the environment. They have shown the best results by causing 0% wastage of material in the industry. The atmosphere is clean and happy because of these steps.
Ownership of most recognizable companies or brands in the world:
There are so many famous brands that are marketed and owned by Nestle. These brands include Nestle Nescafé, Purina, KitKat, Nan, and Maggi. Nescafe is a very famous brand, and it is one of the best brands in the whole world. Nestle is a valuable brand in international brands lists and Forbes.
Brand recognition and brand value are interrelated to each other. The brand recognition of nestle is so wide due to its presence in so many countries. Anybody can sell its current products easily due to awareness.
Read on: NESTLE MARKETING STRATEGY | MARKETING STRATEGIES OF NESTLE
Weaknesses of Nestle – SWOT Analysis of Nestle
Criticism over selling food with contamination, using high water amount, unethical practices and child labor:
It is the largest food company in the world and that is why it gets attention too. The attention is not always good as it causes too many problems too. People start noticing you with a more critical eye. Nothing can escape criticism, and the same is the case with nestle. For so many years, people criticize nestle for so many reasons, which are below.
Baby formula is marketed unethically, which is wrong. Once, they asked for debt payment to a country that was facing famine. They get work by forcing child labor which is resisted by all. They have anti-unionism and misleading labeling issues too. There are some issues regarding water usage, too, that are critical to solving.
Recently the water usage in California caused a very severe drought condition. There are so many state laws applied to use less water so that the water conditions can be improved in society. The nestle is not following these rules, and it is draining water from aquifers and other natural resources. This issue caused a lot of criticism and is against the company’s repute.
Contamination of food:
Nestle is selling its products in huge amounts on daily basis. All products are completely different and nothing can beat their level. Sometimes, the company has to recall some production because of health issues or contamination. There is no compromise over health and that is why they lost so many customers. The worst condition was when they had to recall the prepared food dishes from the US market because of some contamination. It destroyed the reputation of the company badly.
You can read: PESTLE ANALYSIS OF NESTLE | NESTLE PESTLE ANALYSIS
Opportunities for Nestle – SWOT Analysis of Nestle
Accurate and Clear labeling which indicates harmful products:
Everyone knows that people love to buy those products that have clear labels and every ingredient is mentioned on them to come to know what they are eating. There should not be any harmful products in making because people love to eat products free from harmful elements. In a survey, people said that they would love to eat things on which the company mention everything clearly. Nestle is providing very misleading information which is a very bad thing. They should improve their labels.
Material sourcing by the transparent method:
Consumers are very conscious about the sources from where they are getting food, and they want to know whether the food is clean and hygienic or not. People like to but the food which is made with ethical values and price does not matter in this case. So, all materials used in the making of products must be obtained from transparent resources.
An increasing number of many small startups of food:
Startups are very trendy nowadays and people love them. The reason behind id they are available in many options. In a world where original brands are losing their sales, startups are gaining hype. Nestle can gain a high rank by increasing the investment amount in startups.
RTD Coffee and tea markets:
Beverages are the most used RTD products and almost every brand is offering these products. RTD teas and coffees are everyone’s favorite because they are ready in no time and they can provide you with the energy. Tea and coffees are healthy and they are a great source to keep you active throughout the day. There are several small brands that are moving fast because of their coffees and teas.
Threats to Nestle – SWOT Analysis of Nestle
Bad water quality:
Beverages are mostly made by using water and thus water plays an important role in a beverage company. Bottled water is a bit expensive and that is why they use water of low quality which can cause severe health issues. Water scarcity is a big issue and threat to beverage companies, which is why it is very important to deal with it. There are so many things which are exploiting the water nowadays. Water demand is increasing day by day and its resources are decreasing on a daily basis. Companies are facing criticism because of the high usage of water near areas where people are suffering from water threats.
Increased competition among beverage or food industries:
Competitive companies are always the threat and rivalry causes a lot of issues. There are so many large or small companies which are offering beverages or foods because they are famous all over the world. When the demand for something increases, the companies start to offer these products in vast amounts. Thus, the air of competition blows which is a great threat. The quality, taste, spices, price, and so many other factors matter a lot when it comes to eatable things. The company should respond to the consumer’s desires.
Coffee Bean’s higher price can cause weather disasters:
You can use coffee beans to make coffee or use them in raw form. These Coffee beans are very volatile and they can cause weather change which is not much appreciable. Coffee beans have high prices and that is why they can cause droughts or famine which is against the climate.
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