nestle s2 f08
TRANSCRIPT
History
• Founded in Vevey, Switzerland by Henri Nestle
• Combination of two companies
• Popular during WWI and WWII
Industry Analysis• Brief for candy industry
• Health Issues
• Challenges • Future Trends
Definition and History• Definition of candy industry
- It’s a part of snack industry and belongs to food industry.
• History of candy industry
- Can be dated back to mid 1800’s.
Health Issues• As a part of food industry, Candy industry is also facing
health issues mainly as followings:
• - Tooth Decay
• - Obesity
Challenges• Substitutes to candy in snacks risk the profit of candy industry.
• - Chips and crisp
• - Biscuits and cookies
• - Popcorn
Future Trends• -Improved technology
• -High profit
• -Fierce competition in market
Global Analysis• Nestle and Ethiopian Government
• Nestle and Infant Formula
• Nestle and Kit Kat
Kit-Kat Commercial
Company AnalysisSTRENGTHS• Strong brand name recognition
some of the most recognized brands in the candy and chocolate industry:
-Nestle Crunch-Pixy Stix-Wonka Products-Butterfinger-Baby Ruth
STRENGTHS Cont.• Internationalization throughout the industry
• Very recognizable in nearly every country
• Chocolate and Candy are popular worldwide
• Very low operating costs– Allows Nestle to undercut pricing stategies of competitors
WEAKNESSES• Candy division is small portion of company revenue----only
11% of annual sales---Nestlé's revenues
• Company interests are more targeted toward other industries, not candy
• Dependence on Foreign production-many Nestle products are made overseas for low costs
OPPORTUNITIES
• Healthier approach to candyCountries including U.S. are becoming more health conscious
• Strong opportunity to join bubble gum market
THREATS• Competitors
• U.S. market slump
• Foreign Labor
• Tainted ingredients (Melamine)
Competitor Analysis
Hershey’s Company• Largest North American candy company
• Headquartered in Hershey, Pennsylvania
• Largest chocolate factory in the world
• Twizzler’s, Reese’s, Milk Duds, Jolly Ranchers
• Produces Kit Kat for Nestle
Mars Incorporated• One of the largest private owned companies in the United
States
• Headquartered in Hackettstown, New Jersey
• International Headquarters is Brussels, Belgium
• Skittles, Starburst, M&M’s, Snickers
• Recently purchased Wrigley Jr. Company
Pearson’s Candy Company• St. Paul, Minnesota headquarters
• Salted Nut Roll, Mint Patty, Nut Goodie
• Very centralized – 80% of revenue from Salted Nut Roll and Mint Patty
• Several ownership changes
Cadbury plc• Worlds largest candy company
• Based in London, England
• Cadbury Cream Eggs, Trident Gum, and Halls cough drops
• 60 countries, 50,000 employees
• Sold United States subdivision to Hershey’s
Recommendations
• Short Term
– Find more efficient and labor friendly production practices
– Create even more low cost products to match the budgets of homes.
– Produce environmentally friendly packages
Recommendations Cont.
• Long Term
– New product lines• Health?
– Expansion into untapped markets
– Combine candy segment with another competitor
Conclusion
Nestle is one of the top producers of candy in the world. They share just a small share in the global market as well as just 11% of their own companies revenue, but their ability to transition into foreign markets and produce top brands lets them compete with all other companies worldwide.