Nestle: First-mover Advantage and Pizza Kit

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Case study: Nestle Refrigerated Foods
Problem Statement:
Nestle Refrigerated Food Company (NRFC) in the year 1990 while in the late 1980s the company has successfully captured the category by introducing refrigerated pasta and sauces in the markets which improved the shelf life of the earlier selling products in the U.S markets. NRFC is wondering whether or not they should launch a pizza product into the refrigerated foods market, and if it should have additional toppings sold separately or not. Objectives:

Sustain the first-mover advantage
Extend their product line
Increase market share
Alternatives:
Maintain the status
launch the Pizza Kit with toppings sold separately
launch the Pizza Kit with no additional toppings sold separately

Consequences of Alternatives:
Recently, the company’s major competitor in the global markets ,Kraft is expected to launch refrigerated pizza in about six months .NRFC want to replicate the success of its earlier product to pizza market, NRFC has to launch its product well before Kraft to enjoy the first mover advantage over the competitor. The first option - Maintain the dominant status in pasta market, not entering the pizza market. The entry of pizza into the refrigerated food category was new as people never tried it. Because the Pizza market was dominated by restaurants where the people either ate it or carried for eating it at home. Therefore it will be more risky and costly for Nestle to enter the pizza market. Nestle could damage its current Contadina Pasta & Sauce product line if the Pizza Kit product is not received well in the marketplace due to the brand penetration. The second option- launch the Pizza Kit with toppings sold separately. NRFC gained the first-mover advantage when they enter the pasta market, and then use the advantage to sustain the threatened by Di Giorno. NRFC’S brand penetration can be increased to improve the total sales by launch the pizza kit, because pizza and pasta are in...
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