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Innovation and Renovation, the Nespresso Story

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Innovation and Renovation, the Nespresso Story

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  • April 9, 2013
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INNOVATION AND RENOVATION THE NESPRESSO STORY

INTRODUCTION
The main point of this case is how firms can develop and maintain new strategies in order to have innovation and renovation, this two are fundamentals for all the companies who want to be competitive and evolving in the changing market. Nespresso, as a line product of NESTLE, not just developed a different way to sell coffee, also created a new business model difficult to copy for the competition and a good approach to the market of R&D coffee.

CONTEXT
Nespresso System is an innovative concept because offers to the consumer an individual portions of coffee (high quality coffee). Many of these consumers are in Europe, principally in the Scandinavian nations. The Nesspreso System is directed to households headed by well-educated, affluent 35 to 45 years old men and women. The coffee market is divided in two categories, the first is Coffee R&G (roast and ground) this coffee has more quality, the second is instant coffee. Each category is divided into two more “Away-from-home” and “in-home”. Nespresso is focused in coffee R&G in home. The coffee market is controlled by 5 major brands: the first is nestle with 23% in the market, the second is kraft Jacobs SUCHARD (Philip Morris) with14%, the third is Douwe Egberts for Sara lee with 7%, the fourth is Folgers coffee for P&G with 6% of the market, and in the last place is Lavazza with 2% of the market. The other 48% of the market is belong to the others, less important, companies. WHY NESPRESSO?

Facing the context and the challenges of the company in the future, Nespresso was represented a big opportunity not just to try the unexplored market of R&B, also to exploit the success of new and innovating brands in the market like Nesquick and pure life. Besides Nestle didn’t have experience in other types of business and Nespresso show up like a window which aloud to see other type of business model. Nespresso is a type of coffee packed...