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    By-

    Pinal Basarani 12

    Jayesh Budhrani 20

    Pawan Lilani 52

    Vinita Makhija 55

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    The worlds leading nutrition, health

    and wellness company

    Nestl: Good Food, Good Life

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    MISSION STATEMENT

    Good Food, Good Life"is to prov idecon sum ers w i th the best tast ing, mos t

    nutr i t ious cho ices in a wide range of food

    and beverage catego ries and eating

    occasions, from morning to night.

    Customers Yes

    Products and Services Yes

    Markets No

    Technology No

    Concern for survival, growth and

    profitability

    No

    Philosophy No

    Self-concept Yes

    Concern for public image NoConcern for employees No

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    Found in 1866 by Henri Nestl at. Switzerland

    Over 280,000 employees

    Nestl sales for 2009 were CHF 108 bn.

    456 factories in 84 countries

    24 R&D Centres worldwide.

    10,000 different products

    Nestl at a glance

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    Americas42.2%

    Asia, Oceania, Africa

    21.8%

    Europe

    36.0%

    Excluding globally managed businesses (Pharmaceutical, Nestl Waters, Nestl Nutrition)

    Sales by rgionPercentage of total sales in 2008

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    Nestl India has presence across India with 8

    manufacturing facilities and 4 branch offices.

    Nestl India manufactures products Nescaf, Maggi,

    Milkybar, Milo, Kit Kat, Bar-one, Milkmaid And Nestea

    BRANDS-

    Milk products and Nutrition

    Beverages

    Prepared dishes and Cooking AidsChocolates and confectionery

    Nestl: Presence In India

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    STRATEGIES OVER THE YEARS

    Nestle Nutrition-a global business organization.

    Corporate Wellness Unit was designed to integrate

    nutritional value-added in their food and beverage

    businesses.

    Competitive Strategies associated with FDI.

    It aims to balance sales between low risk but low

    growth countries of the developed world and high risk

    and potentially high growth markets of Africa and

    Latin America.

    Another Strategy-Striking Partnership with other large

    companies.

    It employed wide-area strategy for Asia

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    FOUR STRATEGIC PILLARS

    1. low-cost, highly efficient operations

    2. renovation and innovation of the Nestle

    product line

    3. universal availability

    4. improved communication with consumers

    through better branding

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    NESTLE MODEL

    The Nestl Model seeks to achieve the

    following every year:

    5-6% organic growth

    Improved trading operating profit marginImproved underlying earnings per share

    Improved capital efficiency

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    CHILD LABOUR ISSUE

    PROBLEM

    The use of child labor in cocoa production

    Because of the poverty and a lack of schools

    Violation of child labour law

    Enslaved children and child trafficking

    SOLUTION

    Introduces the nestle supplier code

    Monitoring all participants in its supply chain and set clearer labor standards.

    Give special training on how to address child

    labor problem

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    RECOMMENDATION

    Monitoring all of process for recruitment of child labor

    Working with government

    IMAGE OF CHANGE (CARETAKER)

    The manager control is severely impeded by a variety of internal and external

    forces beyond their.

    The manager had create Nestle Supplier Code to guide and maintain the

    relationship between supplier and company.

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    RAW MATERIALS

    PROBLEM

    1. Unexpected demand by customers

    2. Bad weather and natural disaster

    3. Inaccuracy of orders receives in inventory or stocks in hands

    SOLUTION

    1. Manager build multiple relationship with other raw materials suppliers

    2. The surplus products will be sell with promotion to clear the stock

    3. Build the Dealer Management Systems (DMS)

    - Dms is a software for solutions that provide tools for managing sales, services,

    parts and inventory management, business management, integration, and core

    architecture

    - Dms was build to maintain the relationship between dealer and consumers

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    RECOMMENDATION

    Import inventories from other region

    Not all region has similar demographic factor such as race.

    IMAGE OF CHANGE (CARETAKER)

    The manager control is severely impeded by a variety of internal and external

    forces beyond their.

    The manager had build Dms software to guide and maintain the relationship

    between dealer and consumers.

    This can prevent the poor the relationship from happens among the Nestle dealers

    and consumers

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    Business-level strategy

    Nestle business-level strategy is integrated

    cost leadership/differentiation

    -Wide range of products (over 20 categories:

    coffee, milk, mineral water, petfoods, cereals)-Low cost operators.

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    Competitors

    Many competitors

    The same qualities

    The same prices

    Unilever, Kraft, Master foods

    High pressure

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    Problem

    High market share

    Low growth

    Competitive pressure

    Want to expand

    Dont have enough resources

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    Solution

    Cut investment budgets, overheads, frill

    Maximizing existing assets, capacity,

    distribution

    Target internal growth rate

    Improve supply chain, productivity,optimize

    planning

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    ANALYSIS

    1. SWOT Analysis

    2. Porters Five Force Model

    3. PEST Analysis

    4. IFE

    5. EFE

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    SWOT ANALYSISSTRENGHTS

    Unmatched product and brand portfolio.

    R&D capabilities.

    Distribution channels and geographic

    presence.Competency in mergers and acquisitions.

    Brand reputation valued at $7 billion.

    Ability to customize and localize products

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    WEAKNESSES

    Inability to provide consistent quality infood products.

    Weak implementation of CSR.

    Allegations of unethical conductProduct concentration in many areaswhich might be viewed as unhealthy.

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    OPPORTUNITIES

    Increasing demand for healthier foodproducts.

    Acquiring startups specializing in

    producing well-being products.Establishing new joint ventures.

    Opportunity to further expand into new

    markets (geographic and product)

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    THREATS

    Food contamination.

    Trend towards healthy eating.

    Growth of private labels.

    Rising raw food prices.

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    INTERNAL FACTOR EVALUATION

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    EXTERNAL FACTOR EVALUATION MATRIX

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    Porters Five force Model

    Keeping in mind the global market in which Nestleoperates, the porters five force analysis will becarried out keeping a general view of the entireworld as the potential market for Nestle.

    1. Threats of New Entrants: Nestle threats to entryexists because its barriers to entry are very low.For instance, Nestle in India there are low barriersto entry and many small domestic players can

    enter the market and challenge the market ofnestle through their product or pricing offeringwhich is tailored to the local culture and tastes.

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    Bargain ing Power of Suppl iers

    The bargaining power of suppliers of Nestle is

    very low especially in regions where the

    countries are economically backwards such asPakistan or Bangladesh. That is because Nestle

    being such a giant in the market has the ability

    to bring lots of new business to the suppliers and

    therefore the suppliers have to produce the rawmaterials according to the outlines set by the

    company or they can be replaced.

    7

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    Bargain ing Power of con sum ers:

    The bargaining power of the customers of Nestle ishigh. That is because it is a brand which greatly

    relies on consumer appreciation for the product. If aproduct is launched in any part of the world wherethe consumers do not like the taste, they will refuseto buy it. Similarly in third world countries theconsumer base is very price sensitive. This raises

    their bargaining power if Nestle wants to penetrate,then it will have to reduce its prices to theiraffordability level.

    7

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    Threat o f Subst i tutes:

    Threat of substitutes for Nestle is also very high.In all areas of its operations there are multiple

    other firms that are offering either similarproducts or substitute products. For this purposeNestle has to ensure that it offers a productexperience that cannot be imitated and isdemanded by its consumers.

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    Indus try Rivalry:

    Industry rivalry for Nestle is very high in no

    matter what part of the world it operates in. In

    United Kingdom it faces threat of competition

    from brands like Kellogs, in India it faces

    competition from local brands and brands such

    as Knorr which are starting to venture into thefood industry

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    BCG MATRIX

    STARS

    Nescafe

    Maggi Noodles

    QUESTION MARKS

    1. Milo2. Nestle Kitkat/Barone/ Munch

    3. Maggi Sauces

    4. Maggi Soups

    5. Nestle Butter

    6. Nesvita

    7. Milk

    1. Nestle Maggi Pickles

    2. Nestle Butter

    CASH COWS

    Ceralac

    DOGS

    1. Nestea2. Milky Bar

    3. Nestle Crunch

    HIGH

    LOW

    B

    USINESSGROW

    THRATE

    HIGH LOW

    MARKET SHARE

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    Product: NescafePosition: Star

    Reasons for present positioning:

    (1) Nescafe is one of the leading coffeebrands in the Indian market.

    (2) It has find a dominance which isunparalleled by any other brand in thecountry.

    (3) Not only does it have a high market share

    but it growth rate is also significantlyhigh.

    (4) The name Nescafe has become genericwith coffee.

    Product: Maggi Noodles

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    Product: Maggi NoodlesPosition: Star

    Reasons for present positioning:

    (1) It is surprising to note that Maggi Noodles, whichhas found more households of consumption in Indiathan any other country in the world and has become

    the first preference of Indian children in terms of instantfood, but with other competition prospects arechanging

    (2) The reason essentially lies in the fact that thoughMaggi Noodles has a significantly high market share in

    the Noodles market in India, the market growth rate ofNoodle consumption is growing very high.

    (3) Though the number of repeat purchasers is high incase of Maggi, the rate of increase among the newpurchasers is also growing.

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    Position: Question Mark

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    Position: Question MarkIntended Placement: Star

    (The reason why these are is not placed as a dog is that it has the potential to

    expand

    and also because the product lies in a market with high business growth rate.

    The retailers dont give much importance to these items as an item on the

    shelf but they also do not completely disregard it off their stores.

    WHY?

    These might have not seriously taken promotional drive.

    The main chunk of advertisements is seasonal

    Extensive promotional exercise meant to place it in the mindset of the Indian

    psyche.

    It has huge avenues for growth especially analyzing the extending Indian

    market.

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    Position: Question Mark

    Intended Placement:DISINVESTReasons for present positioning:(1) Maggi Pickles and, on account of its limited variety (especially in thistaste crazy country) and comparatively higher prices, has been unableto acquire a market necessary for its bare minimum existence.

    (2) The sales of Maggi Pickles has never really trigged since its launch.

    (3) The placement of Maggi Pickles is doubted for the twin reasons of itshigh price and packing, which seems to target it to the upper substratawhile the lack of a significant number of variants poses it a challenge tomaintain itself in such households.

    (4) It is not a dog because it is not the market which has low growthrate. In fact the market of packaged pickle is growing but it is MaggiPickles which is unable to gather a substantial share in this growingmarket.

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    (1) Placing Maggi Pickles on the hearts and mind of the

    typical taste centric and money conscious Indian

    consumer will require an overhauling and huge

    investment.

    (2) Extensive price cuts are required but the matching

    returns are doubtful.

    (3) Pickles being a non-durable product and their

    success essentially related to the taste of the consumer,

    are not one of the core competencies of Nestle, which is

    better known to introduce standard taste in the countryand get them approved by the consumers.

    (4) Thus it is better advised to disinvest in the business

    and focus on other brands.

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    Reasons for present positioning:(1) Nestle Butter, though available in the market for some

    time now, has not found much support from the consumers

    primarily on account of the dislike of the taste of Nestle

    Butter.(2) Considered as salt less, Nestle butter again is yet to

    grow from its pre-launch position on account of the huge

    competition it faces from Amul, the market leader in this

    field.

    (3) Now, as the market growth rate is quite significant, yet

    as Nestle Butter has not acquired a better share in the

    market, it has been placed in the category of Question Mark.

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    1) Facts do not favor Nestle to continue with its butter.

    (2) Instead of no response, a significant number of

    retailers are of the opinion that Nestle Butter seems to be

    rejected by the consumers for the reason that its tastedoes not suit the Indian psyche.

    (3) Thus it is advisable for Nestle to discontinue with

    butter, as it did with its water brand, Pure Life. Also, itwould be better to concentrate on other brand than to go

    in for a head on collision with Amul, the market leader,

    which is inevitable on account of the same market which

    both the products cater to.

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    Product: Milky BarPosition: Dogs

    Reasons for present positioning:(1) It become quite popular in and around the year 2000 but itnever reached the stage of a power brand.

    (2) Primary tried by the Indian consumer as a craze which laidin trying the first no brown chocolate, Nestle Milky bar was a

    sweet chocolate with cream color. Thus the primaryacceptance of Milky bar was not based on its core qualitiesbut on the basis of certain peculiarities which it contained,differentiating it from other products in the same line.

    (3) Milky Bar, as a chocolate, though has a growing market,yet it has been placed as a dog on account of the inherentlack of core quality which makes it generic with chocolates.This was the main reason why it was never considered acompetitor by other chocolate manufactures and theconsumers also treated it so.

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    Intended Placement: Disinvest

    Comments:(1) Milky Bar has lost the primary battle which it had withmindset of the unaware Indian consumers who couldnever contemplate a non-brown chocolate.

    (2) The market positioning of Nestle Milky Bar has beenonly to children (as one can contemplate from theadvertisements which relate only to children in the agegroup of 10 -15) and thus it has lost the adolescentconsumer, which is also a

    major part of the entire consuming segment of chocolates.

    (3) The promotion style of Milky Bar has disappeared. Theadvertisements have been too soft and not too impressive.Thus success of Milky Bar requires rebuilding the image ofMilky Bar.

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    REFERENCES

    Nestle Annual Report 2013

    http://www.articlesbase.com/management-

    articles/strategic-management-at-nestle-

    5907881.htmlwww.nestle.com

    http://articles.castelarhost.com/nestle_competit

    ive_strategy.htm

    http://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.nestle.com/http://articles.castelarhost.com/nestle_competitive_strategy.htmhttp://articles.castelarhost.com/nestle_competitive_strategy.htmhttp://articles.castelarhost.com/nestle_competitive_strategy.htmhttp://articles.castelarhost.com/nestle_competitive_strategy.htmhttp://www.nestle.com/http://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.htmlhttp://www.articlesbase.com/management-articles/strategic-management-at-nestle-5907881.html
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    Thank you!