Topics: Infant formula, Milk, Marketing Pages: 9 (2258 words) Published: February 19, 2015
Nesle - Strategic Managment
Nestle is a Swiss, world leading multinational company producing a wide range of tasty beverages and nutritious food at international standards. Nestle holds on to a good brand name, innovative products, low cost, rising share market and a financial position which can be classified as Cash Cow using the Boston Consulting Group Matrix. Nestle has an employee strength of over 328,000 people around the world. Nestle produces a wide range of baby food, dairy products, beverages, pet food, confectioneries and also pharmaceutical products. My selected country Australia, had become the second largest export market for Nestle by 1906. This potential translated to setting up the business in Australia in 1908. Nestle Australia Ltd is ranked at number 83 against 2000 Australian companies This public company is foreign owned and it’s profits are focused from Beverage, food and Tobacco manufacturing. Strengths

The strengths of this company is it produces quality products. It’s more than 140 years in the industry has earned Nestle the world’s biggest brand. Committed research and development through product innovation resulted in the invention of Milo in 1934 which is seen as a breakthrough in Nestle technology in Australia. Nestle is seen as the world’s biggest brand and was featured as a top brand in the Fortune 500 list Nestle also hold a strong marketing and advertising power due to the global brand. Nestle’s constant upgrade in technology has resulted in the quality and increase in healthy food production. This is complimented by the skilled and committed team who are the reason for the Improved manufacturing techniques. Threats

Weaknesses are internal characteristics that might inhabit or restrict the organization’s performance. (Daft, Richard L.2008) The threats of Nestle remains to be the high competition from the competitors from the same category of food manufacturer like Arnotts Limited, Australian Co-operative foods limited and Cadburry Schweppes Australia Limited. Weakness

Being a global brand, Nestle has faced many controversies in different countries of operation. This can also cause a negative impact globally. The adverse reaction of infants to milk formula also is a major weakness to nestle which holds a major share of the baby formula market. In 2008, Nestle was impacted by the China milk scandal, involving infant formula’s and other milk products which contained melamine causing threat to lives. Over 53000 children fell ill from the tainted milk powder. However, Nestle had denied claims that the traces of melamine found in one product by the local government was far too small to be significant Opportunity

Nevertheless, Nestle continues it’s opportunity into the food industry by introducing new products and new flavours as the needs and taste of consumer becomes more complex. For example, Nestle has invested in the introduction of health based products to tap the more sophisticated needs of the healthy conscious customers. Opportunities might include the possibility of serving additional customers ( market penetration), the chanse to entre new markets or segments ( market development), or falling trade barriers in attractive foreign markets ( Dessler, Gary.1998). The Degree of Rivalry

Nestle has high number of competitors which are also fighting for the same slice of the cake. But these competitors are concentrating on increasing the market share globally but have not researched on new products or new services in this industry. Nestle has made a name in the global market and it’s band has earned trust and confidence by consumers The Threat of Entry

Nestle might have a few threats of entry in the future. Competitors duplicating the new products researched by Nestle and with new technology and machineries might be a threat for Nestle. However, Nestle has also taken actions to patent many of it’s products so that it’s rivals cannot replicate Nestle’s products. The Threat of Substitutes...
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