Nestlé industry

Nestl industryExecutive SummaryNestl is the largest food and beverage industry in the world. Its r unconstipatedue in million in 2008 were 89,630.00, they employ over 276000 pack around the world. (Global 500) Their goals ar to produce good, healthy, and tasty foods which argon consisted of important nutrients. (Nestl South Africa) These features come to Nestl a quaint business which profits by maintaining products which pay offs satisfactions to all customers.After we skimmed through the Fortune 500 list of the companies, there were a lot of choices of thoroughly known companies, however, we picked up Nestl Corporation. Since we grow up with Nestls products which ar nutritional and healthy products, and at the same time really tasty, it seemed interesting for us to do the project about this well known Corporation.The most important issue facing our play along today is to chief(prenominal)tain the caliber of our products and continue to maintain our strong dent name known for its healthy products.Business Mission Visionharmonize to the founder of Nestl, Henri Nestl, Nestls mission is to positively influence the favorable purlieu in which we operate as responsible corporate citizens, with due regard for those environmental standards and societal aspirations which improve quality of life. Further much, the vision and values of Nestl are to make Nestl a leading, agonistic, Nutrition, Health and Wellness Company de outlivering improved shareholder value by being a preferred corporate citizen, preferred employer, preferred provider selling preferred products. (Nestl South Africa)Description of the BusinessThe address of corporate headquarters is Ave, nose 55 Vevey 1800, Switzerland.Nestl operates in 83 countries, in five continents. It has to a greater extent than 509 factories out of which 220 are located in Europe, 153 in America, 136 in Africa Oceania (MARKETING PROCESS OF NESTLE CORPORATION)According to the official website of the Company, Nestl was formed by Henry Nestl in 1867. He was a pharmacist. In the beginning he started to produce milk food for untriedborn babies, which was the first milk cereal for children. The follow was located in Switzerland, where the veridical largest headquarter is located even today. Then, in short period the society started to grow and scatter, and overly offering a large variety of products. Nowadays, the connection is a tum which has multiple stockholders. Throughout its existence, Nestl has merged with some world(prenominal) companies. For example, in 1905 merged with a Anglo-Swiss milk company. (MARKETING PROCESS OF NESTLE CORPORATION) In 1998 Nestl purchased the UK largest java factory, then it do some other agreements with some other companies. In 2002, Nestl made a partnership with Coca-Cola, then with General Mills, LOreal. These mergers helped Nestl expand their commercialise shares on the orbiculate international market. (Nestl.)The brand name of Nestl comes from Henries surname. It is a short name which can be easily remembered. It is a well known and everyone can identify its logo. The quality of Nestls products made the brand easily identified, including the slogan of the brand, Good provender, Good Life. Since Nestl is a company which operates in the global market, it means that its products are interpenetrate worldwide and they are available whenever consumers need them.Nestl over the time has developed and continues to maintain a strong reputation on the Food Industry. We consider that Nestl is on the stage of brand insistency. This means that costumers insist on getting Nestls products, and this is considered to be a big advantage for the company. (Nestl)The legal status of Nestl is a corporation, which is a business that includes stockholders. The main headquarter of Nestl is in Switzerland Peter Brabeck-Letmathe is the CEO. According to the Global 500, the stockholders equity is 46,006.2 million dollars. (Global 500) The boa rd of directors represents the stockholder on managing the corporation.Nestl holes with manufacturing of products, thus, its type of business is manufacturing. Nestl produces a somewhatly similar radical of individual products. Its products are produced on similar ways, they ingest fairly similar prices, which make up a great product line. They produce milk and chocolate products, water, baby food, cof remuneration, and so on. Since Nestl is a huge corporate, they produce on large measuring rods. We know that when a product is being produced in large amount, its production be are start, comparing to products produced on small amounts, thus these lower production costs leads Nestl to bring its products on the market with reasonable prices, from which the consumers benefit directly. Furthermore, they use a production program which includes green technology (environmental couthy technology) that saves electricity, does not pollute the air which leads to consumers benefits.They s ell antithetic types of chocolates, ice creams, coffees, natural water, baby food, flavored milks, etc. some(prenominal) of the products offered from Nestl are NESCAF, NESQUIK, Hot Chocolate, Cocoa, Chocolates, AEROBAR ONEChocolate AssortmentsCHOCOLATE LOGCLASSIC SlabsCRISPCRUNCHBaking ChocolateKIT KATTEX opaque BARMILONestl GOLDROLOSMARTIESSUCROSE FREEPowdered Milk, Nutren ShakesConvalescing MalnourishmentDiabetes SupplementsCritical CareNestl Baby Foods, CERELAC GoldCERELACNESTUMInfant FormulaNestl Waters, Still glitterFlavouredWater DispensersImportsIce Cream, ImpulseTake HomeOut of HomeNestl Cereals, and so on.Consumers may benefit in different ways from buying Nestls products. From the consumers vertex of view, when we decide to buy something to eat or drink, we expect to get the most satisfaction from it. Thus, we look at its price first, then its ingredients, if it is nutritious, if it is tasty, and healthy. Since Nestls company objective is to produce healthy, tasty, nutritious food, and they offer them at reasonable prices, we conclude that consumers benefit by buying Nestl products.Nestls products are considered as high quality products. Furthermore the raw material for example for chocolate, milk is purchased merely from the milk producers who grow and give food to their cows in natural ways.All Nestl products are penuryed, because Nestl first makes research and market analysis then starts to produce its products. But unruffled chocolate products are the most demanded products from Nestl.In magnitude for Nestl to grow and expand its market share is to follow up and to adapt to the current trends that are affecting the food industry. For example, the trend of customers demanding low and no fat products is increasing, and if Nestl develops a dodge to adapt and expand production of low and no fat products, this would be a growth opportunity. Franchising is perceived as a way for companies to expand on other markets. In our cocktail dress, t his also would be a growth opportunity, however, they should supervise and control and see if the franchisee is maintaining the quality standards that the Nestl Company sets to them. Also Nestl officials should make sure that the franchisees are maintaining the prestige and the reputation of the brand.The corporate goals and objectives are to maximize their profits. They tend to achieve this by realiseing consumers demand, by offering nutritional products which taste good, coping up with trends.There are many resources for producing products related to food industry. Nestls triumph is reliant on fresh milk, cocoa, sugar, water, power supply, materials related packaging, technology, transportation modes.Suppliers define success when there is a huge demand for their products, while the stakeholders define success if they achieve to increase the market shares, having enough resources to meet the demand, and maximizing profits by increasing sales.Market AnalysisNestls primary fall gu y is considered to be raft of all ages. In this range there are included infants, children, teenagers, adults, and ripened people. If we take age into consideration, we conclude that it is a factor that distinguishes the consumers, since Nestls has products made eespecial(a)ly for infants, while on the other hand we consent other products which are targeted to athletes, or to adults, such(prenominal) as coffee. Despite of the age, gender, income, and education level are not factors to be included in targeting Nestl consumers. There is not a special product of Nestl which is dedicated to males or females, or to people with different levels of education, while when it comes to income, since our products are not expensive, we dont consider income a factor to target Nestls products.From the consumers point of view, we define Nestl as a successful company if they meet our demands, they evermore supply us with new products, we find Nestls products easily and with a fair price. Also, a factor of Nestls success would be seen if they are aware of social responsibility meaning that they should care more for the benefits of the society as a whole and not only if for companies profits.In general, the food industry is in the level of steady market that does not necessarily grow since people unceasingly use food products because they are necessity goods which no one can substitute them with something else. Furthermore, even if Nestl is always bringing new products on the market, since the population is still growing, we cannot say that it is being placed on the growing level.SWOT analysisStrengths Nestl has a very organized structure, it manages to lead in an effective way more than 276 000 employees and that requires great organizational skills. Thus, one of the strengths of the company is considered to be the organizational structure, Nestl is divided in sectors and severally sector has their CEOs, then it has the executive board and in the lead is the CEO. The hierarchy on Nestl works perfectly. Efficient chain of supply, it delivers its products in a good condition in a fast way. Furthermore, it is a Socially right and innovative company. It has skilled and educated employees.Weaknesses Since Nestl develops many products, it is im mathematical to promote each of them. Another weakness is that Nestls products are dependable on milk, any global disease on cows may conflict directly on Nestls production.Opportunities Nestl has many growth opportunities which are considered to be current trends that allow the company to extend its market. If Nestl catches up with some of the trends that are affecting food industry then it may be an opportunity to increase their profits.Threats As a nemesis that intimidates the company may be the current global economic crises. Nestl has to react fast with a strategy in order to pass the world receding without many losses. It may overturn into a disaster for the company if they ignore what is happening in the global economy. Another threat is competitions operations.PEST analysispolitical The government plays a role on Nestle in terms of the rules that the government makes related to the food industry in general. For example failing to meet any standard of quality, hygiene or other set by the government may result in some sanction or fee for the company.Economic When it is about economics, companies always fear any recession that may occur. So if any recession occurs Nestle allow be affected, and result in possible losses. Another way of economic involvement is the tax rises which also interrelated to the Political (government regulations). However if the economy is doing well it means that also Nestle expectations are to do well on the market too, because it has the necessary conditions.Social Change of life styles, income level, place of residence, education level are some social factors, which might have an influence in a company. But when it comes to food industry they do esnt make a huge difference, because food is a necessity and whether you live in urban or rural areas, or whether you are educated or not, you need to eat unless it is a luxury, and most of the Nestle products are for insouciant use or necessity.Technological Technological advancements always shape the industries change the way they are produced, and makes industries much more productive, but also the need for employees is lower. With the new technologies productivity has increased, the delivery of products is easier products are being safer with the new packaging. Another segment related to technology is that the advert of Nestle products is much easier with internet, other media channels.Nestl uses market breakdown in order to develop a suitable market mixes for different consumers. For example, they segment market for only water consumers or products which are dedicated only for athletes. First step of market segmentation is to name broad product markets, for example, in the case of Nestl would be beverage and then as stated in the beginning segment this market on only a relatively homogeneous group of consumers, such as athletes.According to Fortune 500 the five most influential competitors of Nestl are considered to be Unilever, PepsiCo, Sara Lee, Groupe Danone, ConAgra Foods. However, Nestl has advantages over these particular competitors since it is a larger company and can produce with lower cost, thus the products can be offered with lower price, this can be seen as a weakness of these companies over Nestl. They, offer fairly similar products as Nestl does. They also use many advertisement tools such as, TV, radio, news paper and so forth, some of them also use direct advertisement a earningsst Nestl, for example PepsiCo. According to the research that we have done Nestl maintains to be leading of these companies, so they are not taking market shares from Nestl.In order to increase its market shares, Nestl Corporation must continue to develop ne w products, to spread even more on the countries that do not have factories. It must cope up with trends and forces that are affecting food industry today.The promotional reckon of Nestl is set every year. Nestl for its products uses all known promotional tools. Nestls logo placed in a product makes Nestl responsible for the quality of the product. Advertising contrive has an important role on promoting Nestls products therefore, advertising a product in an effective way increases chances for that product to be successful. They use many advertisement techniques to promote their products such as TV, Radio, Internet, Newspapers, and Magazines. (MARKETING PROCESS OF NESTLE CORPORATION) Beside advertisement, Nestl pays a lot of attention on the Public Relations field. They have a 24 hours media helpline so that journalists can contact them and inquire information whenever they want. Also, Nestl has developed a reputation and maintains that reputation through a variety of public relati ons strategy. The department of PR in Nestl tends to maintain a good relationship among employees and develop good give. They have developed or branded their CEO in a very captain matter and made him well known also developed its reputation worldwide. Because of their reputation when they can easily contact media to make announcements or Press Releases.According to Nestl pricing strategy, Nestl has its own set of techniques for setting the prices of the product. It does not primarily focus on the competitors pricing strategies. It emphasizes on the market demand of the product. Nowadays market is difference through tough recession, so they set their prices keeping in view the purchasing power of the customers. Moreover the prices of the products are also subjected to the type of consumer product. If the product is a daily use then it can have a minimum price to attract the customer towards your product. Thus the company cannot influence much on the prices. (MARKETING PROCESS OF NE STLE CORPORATION)Trend 1 tempo 1 State the focal issue or last facing the enterprise.When a customer want to buy a product he goes through a last process in order to choose between so many offers from different producers for the same product. Now when it comes to the food industry products, there are so many indicators that affect a persons decision. If it is farm friendly than it is an important factor that affects the decision of the buyers. Buyers impart always choose the products that are consistent of organic and natural ingredients. In our case Nestls most important materials that purchases are milk and cocoa. And it is very important that Nestl purchases organic and natural milk and cocoa for the production of its products.Step 2 distinguish the distinguish factors that influence this decision.Certainly success will be considered that all of our raw materials (milk and cocoa) to be purchased from the farm-friendly sources. When we sell our products we also put the farm-f riendly sign on it than customers will differentiate our products not only with our brand name, Nestl, but also with its farm-friendly sign. Whereas failure would be considered if we fail to purchase organic and natural milk and cocoa. Whether it is because we cannot afford to buy them or nobody produces organic and natural milk, it still would be considered failure to us.In order to purchase the organic and natural sources, we need to know our suppliers. Where are their farms located, are there sufficient hygiene sources, check for possible diseases that cows may have and also some other issues that would affect the milk quality.Step 3 List the driving forces that influence these key factors foreseeablePeople will shift to the products that are farm-friendly (natural organic).Nestl will increase the profit.Nestls brand name will become stronger.Increase in the number of farmers who offer farm-friendly productsLess predictableOther food industries will use the same strategy.Higher competition.Highly uncertainCustomers will reject the farm-friendly products.The number of farm-friendly farmers will decrease.Step 4 Rank the key factors and driving forces by importance and by uncertainty.Step 5 Compose plots for alternate futures that could impact the decision.Best possibility ScenarioThe stovepipe case scenario would be if our customers like the products that produce by the organic and natural ingredients. And if this happens, customers shift their demand to these kinds of products, and certainly we will have to shift all of our sources in the production of these products. Furthermore we will grow our market because our brand name will be stronger and we expect a market growth for Nestl. whisk Case ScenarioThe worst case scenario would be if customers reject the farm-friendly products. And all of our production will be a loss for our company. Therefore we will lose our market shares not only for these kinds of products but also for other products produced by N estl. And this will lead to the weakening of our brand name.In-between case ScenarioThe in-between case scenario would be if people will buy the organic and natural products but there wouldnt be any raise in the market shares or any change in the demand for Nestl products.Step 6 evaluate the decision in each of the postulated scenarios.Best Case ScenarioWe have to make the decision of producing our products with organic and natural ingredients because customers always tend to buy products that are natural and organic. And also products with natural and organic ingredients are much healthier and tastier too, so we will provide healthier and tastier products. By using this farm-friendly strategy of production we will affect also in the raise of the number of farmers in the rural areas. bastinado Case ScenarioIf the worst case scenario occurs than Nestl will for sure face losses in the market shares and in other sectors of the company too.In-between case ScenarioWith the in-between ca se scenario occurrence Nestl will probably face some losses in some of its sectors, but it will be easier to rehab in a near future.Step 7 charter indicators and signposts for each scenario.Best Case ScenarioThere will a huge demand for the products with organic and natural ingredients.Increase the market shares.Increase in profit.Worst Case ScenarioRejection of farm-friendly products by customers.High production costs.Loose the market shares.In-between case ScenarioCompetition.The market shares status steady.Trend 2Recently Nestl has merged with the Krafts Food Company so they will start to offer rimed pizzas. Since it is easy for people to prepare frozen products, it is considered that this trend will have positive cause on Nestls profits.Step 1. State the focal issue or decision facing the enterprise.A lot of consumers are interested on frozen products because it is easy to prepare them. If a person can prepare a Pizza for 5 minutes by putting it on Microwave, then they will b uy it. The focused target for this products will be people who work and do not have enough time for preparing food. Also, the fact that Nestls slogan is Good Food, Good Health, it is obvious that the frozen pizzas will be healthy, nutritious and they tasty, therefore, there will be a demand for them.Step 2. List the key factors that influence this decision.In order to achieve this goal, which is to be successful in frozen food industry, we must get information from other food industries which deal with frozen products. We will obtain information which we will analyze, and according to them we will come up with our products. An important factor that influences us to this decision is the name of our company (Nestl), which is a powerful name on the food and beverage industry. People will buy our products more when they realize that Nestl is the producer, thus they will increase the demand for the frozen pizzaso There will be a success if with this trend we increase the production and t he profit to Nestl.o There will be a failure if the target market will not accept our new products. If they do so, we have to start developing a new trend.Conditions/Events determine the success/failureo Success If the trend increases the profit and bring success of Nestl If consumers accept our products and get satisfaction from it If the demand of our frozen products will be higher than the demand for our competitors products.o Failure If this trend will bring losses to our company If frozen products will not be demanded by our target marketCritical assumptions defining the logic of these responseso The competition on the food and drink industries nowadays is very large. In order to keep our clients and gain new ones, we must develop the frozen products on the market. Therefore, Nestl will be differentiated from other companies and will gain success by this trend.Step 3. List the driving forces that influence these key factors.Highly Predetermined/Predictableo An increase of peopl e who consume frozen productso Increase companies profito New production technologyLess Predictableo A decrease of unemployment rate on rural areaso Market Sizeo Increase of employees incomeo Competitive advantage of Nestlo Higher production costsStep 4. Rank the key factors and driving forces by importance and by uncertainty.Step 5. Compose plots for alternate futures that could impact the decision.Best Case ScenarioIf we will be concentrated on frozen products, the demand for our frozen products and the profit of Nestl will be higher.In-Between OutcomesThe trend of frozen products will keep things going almost on the same direction, but with a lower profit and production.Worst Case ScenarioIf we will not go through the strategy of our trend, our market size would be decreased and we will no more have competitive advantage. No one would buy frozen products with a high price if they find almost the same product with a lower price.Step 6. Evaluate the decision in each of the postulat ed scenarios.Best Case ScenarioWe should make this decision because it is a reasonable decision. First of all, the demand for frozen products is higher. Nowadays, most of the people are working and they need products which they can prepare quickly. By informing people about our trend which is Nestls Frozen Products, we will change the peoples behavior so the demand for our frozen products will increase even more.In BetweenOn this case, the things will diverge a little from the best case, but we are sure that they will not get very bad. This is not a decision which brings us high profits, but it will help us to empty failure.Worst Case ScenarioIf we take this scenario, we will face loses for sure. This is obvious that by having a high production cost, the price will increase, which would keep us outside(a) from clients.Step 7. Select indicators and signposts for each scenario.Best Case ScenarioDemand for our productsNumber of clients is highProfit is highIn BetweenThe demand for fr ozen pizzas only (not necessarily other frozen products)Worst Case ScenarioHigh production costsSmall number of clientsMany competitorsSummaryDuring the completion of the project we have done a lot of research to find proper information for each sector of the project assigned to us. We tried to work together on each sector in order to make the project more cohesive. We found very interesting information about Nestl and how a big company should operate. We used the terminology and concepts learned through the quarter in the Global Forces and Trends course. During the completion of the project we found out that Nestl is a very serious company, each department of Nestl has its own responsibilities and it is very well organized. It is important for Nestl to observe forces and trends that are affecting the food industry nowadays. It is essential for the company to maintain its market shares and its touch in the global market through following the current trends such as low and no fat pr oducts, use of green technology, farm friendly (use of organic and natural sources), healthy and tasty drinks, frozen products and so on. We could expand our knowledge if continue to do more research and explore the company even in more details.BibliographyGlobal 500. CNN Money. CNN, 01 Jan. 2009. Web. 8 Feb. 2010. .MARKETING PROCESS OF NESTLE CORPORATION. Http//www.scribd.com. Nestle Corporation, 29 May 2009. Web. 8 Feb. 2010. .Nestl. Nestl Corporation, n.d. Web. 8 Feb. 2010. .Nestl South Africa. Nestl Corporation, n.d. Web. 8 Feb. 2010. .Scenarios from provisionArianit BllacaTrend Low and no-fat productsStep1 TrendThe food industry is a very competitive market and companies are trying to adapt to changes of customer tastes, attitudes, beliefs in order to grab as much market shares as they can. Nestle is one of the most important brand on food industry that deals mainly with producing products such as chocolate, ice creams, beverage and so forth. Although, it is a leading company on this industry it has a very strong competitors. Nowadays many people are concentrating on buying products that have very low or no fat at all. Until now Nestle products had on average amount also included fat. The key issue is whether we as a company should shift our production on products with low and no fat? Or, perhaps give no importance to this trend and focus on other potential trends with higher importance?Step2 Key Factors that influence the decisionIn order to have clearer picture of the problem and construct a strategy on this issue, we need to have more information on the impact and importance of this trend on our company. We should do primary market research in order to create alternatives for solving the problem. If the results show that there is enough evidence that the trend will impact the market in wide range then we should go on with the decision.o If the companys decision to increase the production of the products that have low or no fat increases market shares, this would be considered as a success. It is also important that the shift of production in this direction will not impact on the cost of producing these types of products the cost is lower or approximately the same as previous.o Failure is, if the decision for making more products with low or no fat essentially depreciates our customers base. The customers do not respond positively and do not appreciate the change.Conditions/Events determining the success/failureo Success The decision increases profit. The changes made by the company lead to more market shares. The actual customers like our new products. We are perceived as shapers of the market. We wider our customers base.o Failure If our market shares drop significantly. The products do not taste as delicious as previous ones. The actual customers perceive it as an unnecessary move. We cannot attract new customers.