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Nestle

Nestle SWOT Analysis
BusinessManagementMarketingSWOT & PESTLE 

SWOT Analysis of Nestle – Its Development and Research Capabilities

by Shamsul November 25, 2021

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

Nestle Products

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.

Nestle Brands

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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Nestle PESTLE Analysis
BusinessManagementMarketingSWOT & PESTLE 

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

by Shamsul March 17, 2021

 

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

 

The PESTLE analysis is an external strategic business tool that helps to understand the business tactics of any company. The PESTLE analysis of Nestle gives complete details about various external factors such as political, economic, social, technological, legal, and environmental. It gives complete information about the extrinsic scenarios that can influence the brand or business. It is a useful business tool for big companies like Nestle, as it aids to identify changing market dynamics and promote the level of business constantly. Scroll down to check out the PESTLE analysis of Nestle.

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

Political Factors:

According to surveys, Nestle works across 190+ countries and it is heavily influenced politically due to different rules and regulations of countries. They experience different challenges on daily basis due to its huge size. They have to look at things closely and carefully such as environmental regulations, taxation, and import/export laws of several countries. Sometimes these things work in the favor of the company but sometimes they have to face severe consequences. The change in labor laws is also a big problem for the organization because it forbids the exploitation of child labor in cocoa farms. According to reports, this thing can affect the company’s operation indirectly. It is a fact that big global companies like Nestle perform well in suitable and favorable conditions.

The instability creates a bad impact on the working and operation of the company. For example, the Brexit period was really challenging for the company. This thing forces the company to rethink its decisions in this country. This type of instability disturbs the working of Nestle. It creates several problems for both companies and people in the form of unemployment and low wages. Due to strict food regulations, the company has to face stringent and extensive testing in order to create new products according to the regulations. You can take the example of Maggi which faces the same problem. Recently, India reduces the corporate tax which is really welcoming for Nestle. It gives Nestle a good opportunity to form better and more products at an economical rate. It directly gives benefits to customers.

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

Economic Factors:

Nestle is a global organization that is operating in various countries. It is really crucial for the company to make several economic policies according to the economic situations in a specific country. As affordability is the biggest factor, so it is really hard to provide more and better-quality products in those markets where the prices of raw material keep fluctuate due to economic and political factors. As the cost of raw material is increasing on daily basis and the trade tension between the US and China also creating problems, so it is really challenging for Nestle to manage things properly. This thing creates instability between suppliers.

Disposable incomes are also a big hurdle in the way of best quality products. Political unrest and fluctuating exchange rates are also problematic for the organization. The company is trying to improve local production in order to reduce the manufacturing cost. The increasing cost of agricultural products and different segments are influencing the profitability of Nestle. As China and US are two major markets of Nestle, so the political stability in these markets increase the revenue system and offer growth opportunity to Nestle.

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

Social Factors:

No doubt, Nestle is a big organization. These kinds of large-scale organizations are easily influenced by changes in trends formed by the customers. The company is trying to manufacture healthy products such as low fats and sugar items for health-conscious consumers. The company has strong monitoring, processing, and manufacturing system that provides high-quality products. These products are minimizing health risks. It is due to the effective storage and supply chain network. The biggest success of Nestle is its better planning and strategy because they understand the needs of consumers.

Due to the rising sustainability goals, the company has inaugurated the ground-mounted solar plant in the United Arab Emirates. As people are more concerned about pre-cooked and canned products, the company ensures the quality of products by investing a huge sum in the R&D sector in order to satisfy the customers. In order to fulfill the requirements of customers, the company is really improving its working environment by implementing innovative technologies which surely increase the profitability and popularity of Nestle.

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

Technological Factors:

Nestle firmly believes in the assimilation of digital solutions, models, and services. They are essential factors for both the internal and external integrity of the company. Due to the rising cyber-attacks, privacy of data, security issues, and reliability, it is crucial to develop a solid plan to protect the system in case of any emergency or mishap. For achieving desired goals, the company heavily invested in technology segments such as real-time data. They are also investing in different programs that help to check the nutritional information of different products. To complete this plan, Nestle has partnered with several authorities.

In the US, the company has partnered with SmartLabel transparency which helps to give information about allergens, nutrition, and ingredients. With such dedication and innovation, Nestle is continuously trying to improve the life of people with its products and services. There is no doubt that Nestle is a trendsetter in the relevant field. They just need to improve their technology on a constant basis in order to remain competitive in the market.

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

Legal Factors:

It is really necessary to abide by the legal formalities of the different countries in which Nestle is currently operating. It requires a strong legal team that observes these legalities in every aspect and finds solutions for the company. Basically, these laws are designed for the safety and health of consumers and employees such as labor laws and consumer safety laws. They need to follow all the rules and regulations of countries for smooth and constant growth. On the other hand, it is also essential to watch out for IPO and trademark rules occasionally along with environmental laws.

In case of any breaking rules, the company has to face severe problems in the form of court cases and public trials. They also face criticism for supporting studies for breast milk which is against international and local laws. These kinds of negative things can break the reputation and image of Nestle globally. These things can be threatening for the profitability and market position of Nestle.

PESTLE Analysis of Nestle | Nestle PESTLE Analysis

Environmental Factors:

Nestle is trying to reduce its environmental impact by adopting eco-friendly options. They are reducing the use of plastic in their products and also focusing on creating 100 percent recyclable packaging. This thing really contributes towards the sustainability of and also welcoming for eco-conscious people. In case of any severe changes in environmental laws, the company has to face real problems in its operation. They were suspended by RSPO for the reason that they fail to submit the sustainability report on palm oil. They are also working to reduce its footprint of greenhouse gas emissions.

The company officials are also claiming zero-waste production in their manufacturing plants. They are also planning to develop sustainable goals globally in order to catch the attention of consumers. Recently, they are working on a water efficiency program. In short, they are trying their best to fulfill the environmental laws that can contribute to its success and growth.

 

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Nestle Marketing Strategy | Marketing Strategies of Nestle

by Shamsul January 31, 2021

 

Nestle Marketing Strategy | Marketing Strategies of Nestle

 

In the food processing industry, Nestle is the largest company in terms of profitability and revenue. They are serving the customers globally through their products and offerings. According to the available data as of January, Nestle is the 18th biggest company with a market capitalization of us$ 323.40 billion. We will analyze the Nestle Marketing Strategy to achieve this position. The company deals in wellness, nutrition, and health products that are essential for every household. In this way, they are taking care of their and assist them to live a healthy life.

 

Marketing Strategy of Nestle (Segmentation, Targeting, Positioning):

Nestle is one of the top FMCG (Fast-moving Consumer Goods) companies. They use different marketing strategies in different marketplaces in order to sell their products and goods. They segmented their strategy into behavioral strategy, geographic, and demographic strategy. This kind of strategy helps them to understand the changing needs of the consumer and industry.

Nestle targets the customer’s requirements in order to identify their requirements and needs. They also target homogenous customers that have similar preferences. The main positioning of Nestle is to recognize the value of marketing in different markets and products. That’s why they focus on the branding and marketplace in order to advertise their goods.

The main mission of Nestle is to offer healthy and the best products to its consumers. Their slogan ‘’Good Food, Good Life’’ is an example of this mission. They offer a variety of consumer goods in different categories such as beverage, food, and eating. Its products are nutritious and essential for all age groups.

 

Nestle Marketing Strategy

Competitive Advantage:

Nestle has a strong global presence and currently, they are operating in more than 190 countries globally. This is the major strength of Nestle as they understand the cultural exposure and needs of different consumers. With such a wide global presence, Nestle is leading in the competitive market. Its wide product portfolio and offerings help them to maintain a major market share and customer base. The company also has a powerful R&D network in consumer goods and wellness. They have more than 5000 qualified researchers and scientists across the globe.

 

Nestle Marketing Strategy

BCG Matrix:

The company has seven verticals offering wellness, nutrition, and health. Its confectionery business, bakeries and cookies, liquid and powdered beverages, and dairy products are very famous due to the strong presence of Nestle in the global market. They are facing stiff competition in the water business and pet care category due to the existence of different local and national companies.

Distribution Strategy:

With a wide global presence and diversified portfolio, the company has been capable to offer its products to every region’s customers. This type of extensive distribution network creates more opportunities for Nestle to penetrate into the market and retain its position in the competitive market. They also target developing markets to increase their portfolio and market share. Moreover, Nestle uses different distribution strategies to deliver its products in different nations.

 

Nestle Marketing Strategy

Brand Equity:

Nestle is on the list of Fortune’s 500 companies and which gives it high visibility and awareness. This kind of publicity is really helpful for the company’s overall image and reputation. Recently, some countries banned Maggi noodles but this issue was resolved. This kind of negative branding also worked for the company. So, we can say that Nestle has a powerful brand image and brand equity.

Competitive Analysis:

As we know, the consumer goods market is highly competitive and most of the local and national brands offer the same products in health, food, nutrition, and wellness. That’s why this industry is very crowded with local and international giants. Nestle is also facing stiff competition from different pharmaceutical companies.

 

Nestle Marketing Strategy

Market Analysis:

The wellness, nutrition, and health industry are loaded with several players that are giving tough competition to each other in order to take lead. This type of fierce competition can threaten the company’s growth and market share. Some products of Nestle are not so popular and due to this reason, they are facing huge competition from the competitors.

Customer Analysis:

Nestle has a broad variety of products in different segments, they offer products for every type of customer and pocket-friendly options. This thing can give them a competitive edge because they understand the changing needs of their customers. They just need to focus on the price factor so that every type of customer can use its products.

 

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