- 1 Company Background
- 2 An Overview Of Nestle
- 3 What is SWOT Analysis And Why Do You Need To Use It?
- 4 Strengths in the SWOT analysis of Nestle
- 5 Weaknesses In The SWOT Analysis Of Nestle
- 6 Opportunities In The SWOT Analysis Of Nestle
- 7 Threats In The Marketing Strategy of Nestle
- 8 The Limitations Of SWOT Analysis For Nestle
- 9 A SWOT Analysis That Is Weighted For Nestle
- 10 Recommendations To The Company
- 11 Reference Textbooks on Nestle SWOT Analyses
- 12 Conclusion Of SWOT Analysis Of Nestle
Nestle’s SWOT Analysis analyzes the brand by looking at its strengths, weaknesses, and opportunities.
The strengths and weaknesses in Nestle’s SWOT Analysis are internal factors, while the opportunities and threats are external factors.
A proven management framework, SWOT Analysis allows Nestle to compare its business and performance to other brands.
Nestle is a leading brand in the food and beverages sector. The table below lists Nestle’s SWOT (Strengths. Weaknesses. Opportunities. Threats).
It also includes the target market, segmentation, positioning, and Unique Selling Proposition.
|Industries served||Beverage, Food|
|Geographic areas served||Worldwide (189 countries)|
|Headquarters||Vevey, Vaud, Switzerland|
|Current CEO||Paul Bulcke|
|Revenue (Swiss franc)||88.785 billion (2015) 3.1% decrease over 91.612 billion (2014)|
|Profit (Swiss franc)||9.467 billion (2015) 36.7% decrease over 14.904 billion (2014)|
|Main Competitors||ConAgra Foods, DPSG, Hansen Natural Corporation, Kraft Foods Group, Mondelēz International, Monster Beverage Corporation, National Beverage Corp., PepsiCo Inc., Snyder’s-Lance, The Coca-Cola Company, The Kellogg Company, and many other beverage, food, and snack companies.|
An Overview Of Nestle
Nestle was founded in 1905 after a merger between Anglo-Swiss Milk Company and Nestle.
In a very short time, Nestle was the largest Swiss packaged food company. Nestle is top-ranked nutrition, health, and wellness company with more than 150 years of market stability. Ulf Mark Schneider is currently the CEO of Nestle.
Nestle products include dairy products, chocolates, and juices. Nestle’s slogan ” Good food, Good life” has been a hit with millions of people around the world, literally and figuratively.
In a single day, it generates more than $1.1 million in revenue. You can see how large this company is.
This article contains more information about Nestle and provides insight into the company’s SWOT analysis.
What is SWOT Analysis And Why Do You Need To Use It?
Before making any major strategic decisions, it is important to assess one’s abilities and position in the context where they will have an impact. This assessment allows one to make informed decisions and prepare for all eventualities.
SWOT stands for Strengths Weakness Opportunities and Threats. It allows us to assess our internal capabilities and external positions.
The Strengths, Weaknesses, and Capabilities are the internal capabilities. External positions and opportunities are determined by
Because it is so simple, the SWOT can be applied to any situation that is affected by both internal and external factors.
It can be applied to any situation, industry, product, business, strategy, product, or even person.
Opportunities and strengths have a positive effect on one’s life and can help you expand. On the other side, weaknesses and threats can be detrimental to your growth.
This is where I will present the SWOT analysis for Nestlewhile discussing each aspect of the SWOT.
We will also examine the unique elements and strategies of Nestle. This analysis will help you understand why Nestle is so successful and how it has been running for so many years.
For easier visualization, I will walk you through the SWOT matrix.
Strengths in the SWOT analysis of Nestle
❤️ World-renown brand It is a Fortune 500 Company and the world’s largest food corporation by revenue (2014). Nestle individual branding their food brands helps them to create awareness about their products. They also benefit from this because even if Maggi’s brand is damaged, it doesn’t affect the sales of Coffee.
❤️ Extensive distribution: Nestle’s diverse product portfolio has helped it penetrate rural and urban markets. The company has been able to make its products more visible on the market by using local distribution methods and decentralization of the supply chain. This includes street markets, mobile street vendors, distributors, door-to-door distributors, and medical outlets. Just look at the
❤️ Wide Product Portfolio: Nestle owns more than 8000 brands/products. These include beverages such as Coffee & Mineral water, breakfast cereals, soups & sauces, and other food items. Nestle has a wide range of products to meet the needs and wants of its customers.
❤️ Large workforce. Nestle has 340000 people around the globe who are constantly working to make their products available in every corner and corner of the globe.
❤️ R & D centers: Nestle is the largest food & nutritional research organization in the world, with approximately 5000 people engaged in R & D. They also have corporate venture funds and research partnerships, and business partners. There are 21 research centers worldwide.
❤️ Brand Equity – It is the 37th highest-ranking brand in the world, which speaks volumes about its brand equity.
Weaknesses In The SWOT Analysis Of Nestle
❤️ Maggi Controversy- Maggi in India was recently banned after it was discovered to contain harmful additives. This had a huge impact on Maggi and the brand at Nestle. It has been relaunched recently by Nestle, which is trying to convince consumers about Maggi’s quality.
❤️ Brand structure There are many brands that fall under the same umbrella, so it can be difficult to manage all of them. Conflict of interest
❤️ Legal and consumer issues: Nestle is a global food giant, but it has been in controversies like the Nestle baby formula boycott. Supplier child labor, fixing of chocolate prices, etc. This resulted in negative word-of-mouth.
Opportunities In The SWOT Analysis Of Nestle
❤️ Healthy breakfast Maggi oats and other healthy options for breakfast are great options. Most breakfast options are too heavy, and people are more concerned about their health. Nestle must expand its market penetration in relation to its Cereals.
❤️ Expanding market. Through its strong supply chain, penetration of rural markets and transition of places of unorganized businesses to organized ones will allow for further growth of the company’s operations.
❤️ Increasing income levels: Because of the stable political situation, increased literacy rate, and controlled inflation, disposable income is increasing. This leads to an increase in demand and a change in their lifestyle.
❤️ Strategic Alliances Nestle has already formed partnerships with several major companies like Coca-Cola and many others to open up opportunities. It is the largest shareholder of L’Oreal, which is the world’s largest cosmetics company. Therefore, partnering with other giants in the food industry will aid the company’s growth.
❤️ Putting more emphasis on R & D in order to address ethical problems: The recent outcry over Maggi Noodles in India about lead presence will have a negative impact on the company’s future growth. Nestle needs to invest more in R & D to address these health problems and create healthier food products.
Threats In The Marketing Strategy of Nestle
❤️ Market competition: It’s becoming increasingly difficult for companies to distinguish themselves from other players due to increasing numbers of local and national players. It is also at risk from counterfeit products that could damage its brand image on the market.
❤️ Increase in price of commodities: An increase in commodity prices will lead to an even greater price. A further increase in the price will lead to a decrease in sales, margins, and brand switching.
❤️ Buyers’ power In a highly competitive goods market, where many brands claim different benefits, it is very difficult for consumers not to switch to one brand. This leads to brand switching, where consumers have the power to choose a brand based upon several factors such as availability, recommendation group recommendation and preference, price, and price.
The Limitations Of SWOT Analysis For Nestle
While SWOT analysis is a popular tool for strategic planning, SWOT analysis is extensively used as a tool for strategic planning However, the analysis has its fair share of drawbacks.
- Certain abilities or aspects of an organization could be both strengths and weak points at the same. This is among the main drawbacks of SWOT analyses. For instance, changing environmental regulations could be a threat for companies, but however, it could also be an opportunity in the sense that it can allow the company to compete in a position to compete with its competitors or even gain an advantage over competitors, if they are can develop its products quicker than competitors.
- SWOT is not able to show you how to gain competitive advantages It is not a strategy to gain competitive advantage, therefore it should not be a complete solution.
- The matrix serves as an idea to begin discussions on how the proposed strategies might be put into practice. It also provided an evaluation window, but not an implementation plan based upon its strategic competitiveness. Nestle
- The SWOT model is a static evaluation that analyzes the existing conditions and a small number of potential modifications. As the environment, circumstances threats, strategies, and circumstances alter, the dynamic of a competitive setting cannot be analyzed in the form of a single matrix.
- SWOT analysis could make a firm overemphasize one external or internal aspect when formulating strategies. There are interrelations among the most important external and internal elements that SWOT doesn’t reveal, which could be crucial in determining strategies.
A SWOT Analysis That Is Weighted For Nestle
Given the above-stated shortcomings of the SWOT analysis/ matrix, the corporate management determined to give the weightage to every internal strength and weakness of the company.
Companies also evaluate the probability of the events that will occur in the near future, and what the effect will be on the company’s performance.
This technique is known as a weighted SWOT analysis. It is superior to basic SWOT analysis as With a Weighted SWOT Analysis Nestle managers are able to focus on the most crucial aspects and eliminate the less important ones.
It also eliminates the problem of the long list, which causes organizations to make a lengthy list but not address any of the elements that are considered to be important.
Recommendations To The Company
Nestle’s portfolio of products is diverse, and its brand names are thousands of years old. are a major force in the world.
However, as we’ve discussed previously it is dependent on its most popular brands for its revenues, and this is not needed for expansion.
Digital media is the most efficient method of marketing its other brands efficiently. Particularly, emerging markets should be the primary focus to build its brands for nutrition and health.
Its R&D department of Nestle must make use of its strengths to decrease using plastics for packaging, and develop more plant-based products that capture market opportunities and combat the challenges. Therefore, Nestle can boost its business to the next level.
Reference Textbooks on Nestle SWOT Analyses
Nestle (2018), “Nestle Annual Report” published in 2018.
Euromonitor (2018), “Consumer/Non-Cyclical Sector Analysis “, Published in 2018.
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
L. Wrigley Divisional Autonomy and Diversification (Ph.D., Harvard Business School 1970)
M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975)
R. E. White, Generic Business Strategies, Organizational Context and Performance: A Comparative Study The Strategic Management Journal 7 (1986)
Conclusion Of SWOT Analysis Of Nestle
The Nestle company’s expanding product portfolio and global reach could be explained by its focus on its primary strengths and alignment with its new possibilities. Nestle must be aware of challenges to its core strengths and be prepared to combat these.
I’ve talked about the SWOT analysis of Nestle and also provided the answers to queries like Why Nestle is Nestle succeeding so well.
What are the weaknesses of Nestle? What are the strengths of Nestle? What is the current position of Nestle’s market?
It’s a powerful but simple tool that is used in a variety of industries, situations, and even in making choices.