Yaprak AngaySelim Erim

Mehmet Avşar

CONTENT

• General Information• Vision & Mission• Environmental Analysis• SWOT Analysis• Organization• Porter’s 5 Forces• Business Level Strategy• BCG Matrix• Competitive Advantages/Core Competency• Social Responsibilities• Ethics

General Information

• Nestlé is a Swiss company, founded in 1866 by Henri Nestle.

• World’s biggest Food and Beverage Company.• Approximately 254,000 people working.• Operating in more than 70 countries.

Vision-Mission

VISION• “Nestlé's aim is to meet the various needs of the consumer

everyday by marketing and selling foods of a consistently high quality.”

MISSION• “ We strive to bring consumers foods that are safe, of high

quality and provide optimal nutrient to meet physiological needs. Nestle helps provide selections for all individual taste and lifestyle preferences.”

Environmental Analysis

Economic trends

• Most countries all over the world are affected by the global economic crisis

• Economic fluctuations in the world• Economic development of countries• Exchange rate

Environmental Analysis

Technological trends

• Most of latest technology (in researching, producing…)

• Developing production systems

• Technological developments in supply chain management&logistics

Global trends

• Improving import&export in the world

• Accessibility to products easily

Environmental Analysis Political/Legal trends

• More countries join WTO: allow more free trade across the nations.• Government controls and certificates in food and beverage industries

Sociocultural trends

• The world people care more about their health, especially with foods and beverages.

• Concern about recycling

SWOT ANALYSIS

STRENGHTS

•Very long history (over 140 years)

•Operated factories in 77 countries (all six continents)

•Distribution channels and geographic presence

•Established many acquisitions

•Brand reputation valued at $7 billion

WEAKNESSES

•Inability to provide consistent quality in food products

•Weak implementation of CSR

•Limited presence in organic food

•Slow growth rate of chocolate&dairy products

•Not as successful as they thought they would be in some market (i.e. France)

SWOT ANALYSIS

THREATS

• Many competitors • Trend towards healthy

eating

• Growth of private labels

• Rising raw material prices in some periods

OPPORTUNITIES

• Acquiring startups specializing in producing well-being products •Continuous growth in US coffee market

• More request to establish joint ventures

Organization

• Nestle is organized in a matrix system, by products and geography.

• Products – in terms of the business units -They define the strategy of each of the products -EG: Ice cream, coffee, nutrition (infants), etc.

• Geographies – The businesses have their central head unit - Zone Europe, Zone Americas, Zone Asia/Oceania/Africa

Organization Chart

Organization

• The matrix structure serves Nestlé well

• For a global organization, the ability to organize around geographical markets and also around products is an advantage

• It has a manager in charge of a product line, but each product line is also coordinated with a manager in charge of a specific geographical area

Porter’s Five Forces

THREAT OF NEW ENTRANTS

• Food Industry large & competitive• Companies enter this market every year in attempt to gain

a portion of profitable market• Nestlé has been around for over a century• Its long history, product quality, consumer satisfaction

allowed Nestlé to obtain a considerable share of the market• New entrants should capture a portion of Nestlé's Market

to survive

Porter’s Five Forces

THREAT OF SUBSTITUTE GOODS

• Nestlé is surrounded by the threat of substitute goods• Wide range of similar products that compete directly

with Nestlé• Competition is fierce• Nestlé’s responsibility to improve its products• Nestlé focused on health and wellness in order for its

products to stay competitive.

Porter’s Five Forces

BARGAINING POWER OF SUPPLIERS

• Creates and maintains positive relationship with its suppliers

• Nestlé holds large purchasing power• Nestlé holds more bargaining power than its suppliers• The company prefers Long-term relationship with its

suppliers which ensures quality of products• Offers advice to suppliers on how to perform more

effectively and minimize cost

Porter’s Five Forces

BARGAINING POWER OF CUSTOMERS

• Customers have large amount of power in regards to Nestlé’s products consumption

• Nestlé’s understands the power of customers and has taken specific steps to meet their needs

• Society is more health conscious---Nestlé is incorporating health and wellness in its products.

Porter’s Five Forces

COMPETITIVE RIVALRY WITHIN THE INDUSTRY

• Nestlé is a powerhouse in the Food Industry • They are in constant and continuous battle to outperform

one another • These companies spend hundreds of millions to appear

more desirable. • Companies continue to strive in order to stay competitive

but consumer will continue to enjoy ever- improving products.

Business Level Strategy Nestlé business-level strategy is integrated cost

leadership/differentiaton.

• Wide range of products (over 20 categories: coffee, milk, mineral water, pet foods, cereals…)

• Low cost operators

Product Differentiation

BCG Matrix• STARSNestle beverages

• CASH COWSBaby food products

• DOGSPharmaceutical products

• QUESTION MARKSBreakfast cereals

Competitive Advantage

• Innovation• R&D capabilities• Sufficient experience• Workforce

Core Competency

• Different types of tastes are combined to create new products.

Social Responsibilities

Ethics

Ethics

Ethics

Ethics

THANK YOU FOR ATTENDING!

References• http://www.ukessays.com/essays/marketing• www.nestle.com• www.nestle.com.tr• http://mamminurture.com/25-reasons-to-boycott-nestle/• http://www.nytimes.com/2013/02/20/world/europe/nestle-pulls-2-

products-in-horse-meat-scandal.html• http://www.nestle-family.com/our-company/english/assets/downloads/

The-World-of-Nestle.pdf• http://sustainable-stella.blogspot.com/2013/02/the-horse-meat-controver

sy.html