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The success of Nestle in Chinese market

Summary

Nestle whose headquarter is located in Switzerland is the world's largest food company, and has set up its first sales office in Shanghai China in 1908. At present, Nestle has been known well and gained the trust of Chinese consumers, and its coffee products have occupied 80% of the market share in Chinese coffee market. Considering the success of Nestle in Chinese market, this report will mainly study the success of Nestle coffee to provide references for other coffee enterprises in Chinese market. Firstly, through using some analytical tools including PESTEL and five forces model, this report analyses the external environment of Toyota and reaches the opportunities and threats faced by Nestle and though value chain analysis, this report reaches the strengths and weaknesses of Nestle. Last, this report analyses the differentiation strategy from brand, products and service adopted by Nestle and reaches that Nestle should continue to implement differentiation strategy deeply because of the favourable current economic environment, intense competition within the industry and the customer loyalty brought by brand differentiation.

Table of contents
1 Introduction1
2 Mainbody2
2.1 PESTLE analysis2
2.1.1 Political factor2
2.1.2 Economic factor3
2.1.3 Social factor3
2.1.4 Technical factor3
2.1.5 Legal factor4
2.1.6 Environmental factor4
2.2 Five forces analysis5
2.2.1 Threats of new entrants5
2.2.2 Threats of substitute products or service5
2.2.3 Bargaining power of suppliers6
2.2.4 Bargaining power of buyers6
2.2.5 Rivalry among existing competitors6
2.3 Opportunities and threats7
2.3.1 Opportunities7
2.3.2 Threats7
2.4 Value chain analysis7
2.5 Strength and weakness9
2.5.1 Strength9
2.5.2 Weakness10
2.6 Porter's Generic strategy10
3 Conclusions12
References13
Appendix 116
Appendix 216
Appendix 317
1 Introduction

Nestle whose headquarter is located in Switzerland is the world's largest food company. Nestle has a long history in China. Early in 1908, Nestle has set up its first sales office in Shanghai China. As one of the earliest foreign merchants entering China, Nestle has been known well and gained the trust of Chinese consumers (Nestle, 2012). The main businesses in China include three parts: coffee, milk and baby milk, wafer biscuit and sweets. Among the above three part, its coffee products have occupied 80% of the market share in Chinese coffee market (Nestle, 2012). In 2010, the sales volume of Nestle in China reached 20.4 billion yuan which accounts for one third of that in emerging market (Liu, 2011). Considering the success of Nestle in Chinese market, this report will mainly study the success of Nestle coffee to provide references for other coffee enterprises in Chinese market. The mainbody of this report includes the following parts: firstly, this report will employ some analytical tools including PESTEL and five forces model to analyse the external environment of Toyota, thus reaching opportunities and threats faced by Nestle coffee based on SWOT model; and then use value chain model to analyse the internal environment of Nestle coffee, thus reaching the strength, weakness of Nestle coffee based on SWOT model; Secondly, this report will analyse the differentiation strategy of Nestle coffee in China based on Porter's generic strategy; Last, this researcher will provide recommendations to other coffee enterprises in Chinese coffee industry on the basis of the successful experience of Nestle coffee.

2 Mainbody

2.1 PESTLE analysis

PESTAL analysis which refers to the environmental analysis of an industry to forecast and make decisions (Luthans F. & Davis K, 1993) including the political factor, economic factor, social factor, technical factor, legal factor and...
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