The Nestle Refrigerated Food Company (NRFC) has the opportunity to extend its Contadina brand name into the refrigerated pizza market. NRFC must determine whether adding a pizza, with or without extra toppings, will meet specific financial objectives and increase sales. Possible Decision Alternatives
Our analysis shows that NRFC can 1) maintain the status quo, 2) introduce the refrigerated pizza without toppings, or 3) introduce the refrigerated pizza with toppings. Analysis of Industry
Pizza is part of the large and rapidly growing Italian ethnic food category. Restaurants like Pizza Hut and Domino’s capture 88% of the $18.4 billion pizza market. Although 75% of the last 10 incidences of pizza consumption were delivered/takeout, 25% of the pizzas were purchased from a grocery store [frozen (16%), fresh (5%) or homemade (4%)]. Globally, NRFC competes primarily with Kraft and Unilever; within the United States, Kraft poses the largest threat. At present, there is no real leader in the refrigerated pizza market in the U.S. Analysis of Company
Nestle, one of the world’s largest food companies, produces a variety of products like chocolates, beverages and prepared dishes. NRFC has a profusion of brand awareness throughout the world, an effective marketing strategy, a strong balance sheet, a comprehensive new product development process, and a profound understanding of what its diverse consumers’ needs and wants are. Moreover, NRFC maintains a long-term focus, which is why it is so committed to the expansion and improvement of product lines and manufacturing and distribution processes. Although the seven-step new development process is very thorough, it could prove to be a weakness at some point. Since it is so exhaustive, it could hinder NRFC’s ability to act quickly when there is an immediate need. For example, had NRFC been able to identify a need for pudding and quickly get a high-quality product to market, it could have gained a...