Free Essay

Nestle Mature Markets Growth

In:

Submitted By Undermine
Words 1142
Pages 5
NESTLE’: SUSTAINING GROWTH IN MATURE MARKETS 1. Describe the characteristics of each of the following elements in the Current Competitive Landscape: a. Globalization - Nestle’operates in 77 countries and sells its products in all 6 continents. Its global position is further enhanced by acquisition of companies which have an established global presence. b. Technology – As part of the GLOBE initiative, Operation Excellence program was implemented which deals with creating concepts & systems to optimize productivity, improving supply chain, eliminating overhead & reduce product complexity. Installation of common information systems in order to integrate all information from all business units. c. Knowledge - As part of the thrust to achieve internal growth , the company invested on extensive research and development . Existing products undergo improvement/changes such as changes in shape, packaging or even taste. Other products are being moved to a new promising product segments in order to maximize earning potential. d. Strategic Flexibility – The launching of Global Business Excellence initiative or GLOBE has transformed Nestle to what success it is enjoying at the moment. GLOBE covers a broad range of strategic objectives and also to improve operational efficiency by integrating the company’s businesses on a global scale. e. Quality – Putting into consideration consumers whose primary motivation to purchase a product is the product’s nutritional value, Nestle’created the Corporate Wellness Unit. Its main thrust is to increase the value of its traditional products by adding health and nutritional benefits. These add-ins are referred to as Branded Active Benefits (BAB’s). In addition, Nestle ‘devotes 1/5 of its research & development budget to nutrition research. f. Profit Pool – The company’s 127,000 products were allocated to 6 strategic brands namely: Nestle’, Buitoni, Maggi, Nescafe, Nestea and Purina. This resulted to higher margins, the products occupy more shelf space, help retailers generate top-line growth and by exploiting brand synergies resulted to reduced marketing expenditures. Further expansion into new product segment through the creation of the Life Venture Fund. Acquisition of business with established market share in order to reinforce its poor business segment is the key action to fulfilling Nestle’s objective of reaching critical mass in terms of market share. 2. Discuss the Vision and Mission of Nestle Nestle’is a company that is not only after of generating sales and profit but also looks after the welfare of its stakeholders (e.g. consumers, employees). Over the years, it has exerted relentless effort in product innovation and renovation in order to meet consumers’ needs or to improve existing products by adding nutritional value. Nestlé strives to be a leader in nutrition, health and wellness, with the belief that good food is central to health and wellness. Nestlé products bring consumers the vital ingredients of taste and pleasure. As consumers continue to make choices regarding foods and beverages they consume, Nestlé helps provide selections for all individual taste and lifestyle preferences. 3. Identify and describe the fundamental principles that guide the company’s strategy Nestle’s strategy evolved from the company’s vision of providing Good Food for Good Life. It is a human company providing a response to individual human needs throughout the world with specific concern for the wellbeing of both its consumers and employees. The company aims to increase sales and profits, but, at the same time, to raise the standard of living everywhere it is active and the quality of life. 4. Explain how Nestle establishes & manages relationships with its primary stakeholder. For over 130 years, the company has acquired the knowledge of the markets all over the world and is enjoying success in adapting its products to the local taste. The company employs continuous product innovations and renovations of its existing products in order to suit its consumers ‘needs. As part of the strategic initiative, Nestle’ has ventured and invested heavily on nutrition and wellness products and to develop nutrition and wellness as a value added feature in its existing products. The creation of Nestle’ Nutrition Unit to provide products for consumers whose primary purchasing motivation is it’s nutritional value. 5. Discuss the leadership tasks that are fundamental to Nestle’s success. When Brabeck took over the reins of Nestle as CEO, the company is already enjoying success in terms of generating sales & hitting profit targets. But despite its success, the challenge that faced Brabeck is sustaining the company’s growth in a maturing market. In order to address the challenge, initially, Brabeck had to identify new growth opportunities and this requires significant investments in R&D and marketing capabilities. Brabeck launched programs and initiatives that address the company’s weak points. An example is the manufacturing efficiency program or MH97 with an objective of cutting raw material costs and optimizes production process. 6. Update the case information using at least three (3) data sources in addition to the text. In 2006, Nestle’ concluded 2 critical acquisitions under its Nutrition business namely: Novartis Medical Nutrition and Gerber. Through the acquisition, the company has significantly increased presence globally and in the US, in Europe and in Japan, which are key markets for medical nutrition. With sales of nearly 1.2 billion Swiss francs, Novartis Medical Nutrition amounted to more than twice the sales of Nestlé Healthcare Nutrition. The combination generated sales of over 1.7 billion Swiss francs and a very solid base to tackle a worldwide market estimated at 10 billion dollars. With 82 percent market share in the US, Gerber occupies a significant part of the baby aisle in the retail trade and its dedicated sales force will help Nestlé infant products to benefit from that critical mass. Overall, the acquisition reinforces and extends the leadership Nestlé had in infant nutrition. While Nestle is already a clear leader in infant formula and in infant cereals at the global level, Gerber now propels the company into the number one slot also in baby meals and drinks. With these two key acquisitions, as well as the excellent internal growth generated by Nestlé Nutrition, the Group's position as the world's foremost nutrition company is now solidly anchored. Based on sales forecast of more than 10 billion Swiss francs, or about 10% of the Group's food and beverage turnover, Nestlé Nutrition is now twice as large as its nearest competitor and a significant driver of growth for the Group. It covers all key areas, from infant nutrition to healthcare and to performance nutrition, as well as weight management with Jenny Craig.
REFERENCE

1. http://www.nestle.pk/pdf/4c%20Management%20&%20Leadership%20Principles.pdf 2. http://www3.interscience.wiley.com/journal/114124270/abstract?CRETRY=1&SRETRY=0 3. http://www.scribd.com/doc/10552265/Nestle 4. http://wiki.answers.com/Q/What_is_the_Mission_Statement_for_Nestle 5. http://www.nestle.com/MediaCenter/SpeechesAndStatements/AllSpeechesAndStatements/Nine+months+results+2007+press+conference+-+address+by+Peter+Brabeck.htm

Similar Documents

Premium Essay

Nestlé: Sustaining Growth in Mature Markets

...Case Study Analysis 8 Nestlé: Sustaining Growth in Mature Markets Strategic Management Instructor Dr. David J. Rambow Associate Professor of Management Summer Term 2011 Anchorage Campus Wayland Baptist University Nestlé: Sustaining Growth in Mature Markets Introduction Dated back to 1866, the Nestlé company had acquired profound knowledge of markets all over the world over the previous 130 years. Nestlé is the leading position in the global food industry with operated factories in 77 countries and sells its products on all six continents. Nestlé has a broadly diversified business portfolio and with leading global market shares in numerous product categories including coffee, mineral water, dairy products, nutrition and baby food, ice cream, confectionary, pet food, and chocolate. Nestlé is also committed to providing quality brands and products that are essential to good health. In doing so, Nestlé incorporated nutritional elements into vast array of product categories to promote food that are safe of high quality (Raisch & Ferlic, 2006). Peter Brabeck-Letmathe took the job as CEO of Nestlé in June 1997; he faced the challenge of having to improve the company’s profitability. In order to generate the financial means required to invest in growth initiatives, Brabeck launched a suite of process innovation initiative in an effort to maximizing existing assets, maximizing capacity utilization, and maximizing distribution logistics...

Words: 1580 - Pages: 7

Premium Essay

Nestle: Sustaining Growth in Mature Market

...Strayer University - Online BUS499 Week 3: Nestle: Sustaining Growth in Mature Market Professor: Robert Brown Abstract Nestle is presently one of the largest food company in the world. Nestle has been called the most conglomerate companies ever, with more than 400 plants in 60 countries and growing. Nestle is Switzerland's largest industrial company and the world's leading food processor. The food giant ranks as one of the 100 largest companies in the world. Nestlé’s primary products include beverages such as (coffee, chocolate drinks, mineral water, and soft drinks), dairy products, infant formula, culinary products (soups, seasoning, condiments), frozen foods and ice cream, yogurt and chilled desserts, and chocolate. Nestlé is committed to providing quality brands and products that are essential to good living. In doing so, the Nestlé name has become synonymous with great-tasting, nutritious food and beverage products. (nestleusa.com) For well over a century, Nestle commitment to producing foods that’s uniquely fulfilling people's needs has been the secret ingredient in everything we they make. Introduction Nestle is know as one of the world’s leading Nutrition, Health and Wellness Company. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. Nestle boasts a broadly diversified business portfolio and has leading global market shares in numerous product categories, which...

Words: 662 - Pages: 3

Premium Essay

Nestlé: Sustaining Growth in Mature Markets

...Abstract Nestle is presently one of the largest food company in the world. Nestle has been called the most conglomerate companies ever, with more than 400 plants in 60 countries and growing. Nestle is Switzerland's largest industrial company and the world's leading food processor. The food giant ranks as one of the 100 largest companies in the world. Nestlé’s primary products include beverages such as (coffee, chocolate drinks, mineral water, and soft drinks), dairy products, infant formula, culinary products (soups, seasoning, condiments), frozen foods and ice cream, yogurt and chilled desserts, and chocolate. Nestlé is committed to providing quality brands and products that are essential to good living. In doing so, the Nestlé name has become synonymous with great-tasting, nutritious food and beverage products. (nestleusa.com) For well over a century, Nestle commitment to producing foods that’s uniquely fulfilling people's needs has been the secret ingredient in everything we they make. Introduction Nestle is know as one of the world’s leading Nutrition, Health and Wellness Company. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. Nestle boasts a broadly diversified business portfolio and has leading global market shares in numerous product categories, which including soluble coffee, bottled water, dairy products, nutrition and baby food, ice cream, frozen prepared dishes...

Words: 280 - Pages: 2

Free Essay

Draft

...Reading and analysing Nestle case plus doing a draft write-up: * Page 564: Nestle has been very successful and is in the “Food & Beverage” industry. Many of their products have reached maturity and this is a big challenge for Nestle. * Page 565: Nestle is facing intensive competition nationally and regionally. Nestle’s global competitors are Kraft, Masterfoods and Unilever. Nestle went through mergers with massive investments that has affected Nestle operational efficiency. Nestle ‘s organic growth is also in the mature markets therefore Nestle needs to strength its innovative capabilities in order to be more competitive in the organic mature market. Nestle program called “operational excellence in 2007 where Nestle’s key objectives are to improve supply chain productivity, optimise planning, eliminate overheads and reduce product complexity” {Raisch & Ferlic, 2006} * Page 566: The are new opportunities for Nestle in the area of wellness and nutritional product market segment. Brabeck the Chief Executive Officer (CEO) aimed at two main strategic goals that is developing nutrition and wellness as a value added feature and reinforcing Nestle’s leading position as specialised nutritional products. * Page 567: * Page 568: * Page 569: * What do you make out from the info given in page 571: * What do you make out from the info given in Page 572: * What do you make out from the info given in Page 573: * What do you make out...

Words: 308 - Pages: 2

Premium Essay

Nestle’s Sustainable Growth in Mature Market

...Nestle’s sustainable growth in mature market The company establishment Nestle was first founded by Henri Neslte in the 1860s by developing and producing food products for babies who could not adapt mother’s milk. Following the success in baby food products, Henri incorporated with an Anglo-Swiss condensed milk company to develop dairy products, especially for government supply in World War I. High sensitive and quick responding to the demand of consumer, Nestle continued to create and develop new product mix to canned food, beverage, pet care products, to maximize its scope of business in food segment. Nestle had been incurring high success during its operation in food industry, proved by production many creative product portfolio, double sales and tripled profits, globally brand recognition, offices and factories around the world with the management of previous CEO Helmut Maucher. Maucher successfully promoted Nestle to higher position in market as a global company and has been operating beyond its original Europe boundary. Nestle seems not still happy with what it had obtained. Under leadership of current CEO Peter Brabeck, Nestle is now experiencing a more significant growth and synergies as the top nutrition and food company with strategic management of Brabeck since he took over Nestle in 1997. In today, Nestle has developed another core business to Research and Development sector to support its traditional food and beverage business. Vision and Mission Vision ...

Words: 1525 - Pages: 7

Premium Essay

Assignment 2 - Diversification Strategies.

...1.INTRODUCTION 1.1 Brief Overview of Nestle Over the previous 130 years Nestle Company has been able to acquire great amount of knowledge of almost all the varied markets of the world since 1866. This is the reason why Nestle has been able to gain a leading position in the global food operations as it has factories operation in 77 countries and it is selling its gamut of products in all the six continents. The best part so Nestle is that it occupies the leading market shares  along with a  broad and diversified  business portfolio in varied and many product categories which include  nutrition and baby food, coffee, dairy products, ice creams, mineral water, confectionary, chocolate and pet food and many more.  Nestle has been committed to provide top quality products and brands which are essential for good health for all age groups. That is why it incorporated nutritional elements in its vast array of product categories so that they can be promoted into the markets as high quality products and safe too (Raisch & Ferlic, 2006).  In June 1997 Peter Brabeck –Letmathe was appointed the CEO of Nestle and the critical challenge in front of him was to enhance the profitability of the company which already had mature markets. A suite of process innovation initiatives were being launched by Brabeck so that financial means can be generated to be invested in growth initiates which would result in maximization of existing assets, maximise distribution logistics as well as enhance...

Words: 3296 - Pages: 14

Free Essay

New Product Development Management

...THE COMPETITIVENESS OF THE SELECTED PRODUCT CAN BE IMPROVED ................................. 8 5. CONCLUSION ......................................................................................... 8 6. REFERENCES ......................................................................................... 9 1. INTRODUCTION OF THE SELECTED COMPANY 1. The Nestlé company history The history begins back in 1866, when the first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company. In Vevey, Switzerland, our founder Henri Nestlé, a German pharmacist, launched his Farine lactée, a combination of cow’s milk, wheat flour and sugar, saving the life of a neighbor’s child. Nutrition has been the cornerstone of our company ever since. “Henri Nestlé, himself an immigrant from Germany, was instrumental in turning his Company towards international expansion from the very start. We owe more than our name, our logo and our first infant-food product to our founder. Henri Nestlé embodied many...

Words: 2657 - Pages: 11

Premium Essay

Cadbury Marketing Strategy

...107 Marketing Plan Nestle Marketing Plan Nestle NESTLE When thinking about food and beverages leading organizations, a name that immediately comes to our minds is Nestle which is the world’s largest food production company in terms of profit and products diversity. The Swiss based company was founded in 1866 by Henri Nestle, it all started when Henri Nestle who was a pharmacist developed a milk-based baby food and named it Farine Lactée Nestlé. He used his surname which means ’little nest’ in both the company name and the logotype, the nest symbolizes security, family and nourishment which summarizes the message that the company wanted to deliver through its products. The logo till today plays an essential in nestles profile. As years have passed, the Nestlé family has grown to include chocolates, soups, coffee, cereals, frozen products, yoghurts, mineral water and other food products. Beginning in the 70s, Nestlé has continued to expand its product portfolio to include pet foods, pharmaceutical products and cosmetics too. Nestle kept inflating and expanding its presence in the market and develop new products accompanied by preserving high quality and great standards. Business Nestle is a Swiss transnational food and beverage company headquartered in Vevey, Switzerland, Nestlé's products include baby food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. The Nestle family embraces other...

Words: 2376 - Pages: 10

Premium Essay

Nestle Business Policy

...Salman Kamani Executive Summary Nestlé is currently the biggest food and beverages (F&B) company in the world. The company has a long-standing history of 140 years and a business portfolio comprising of more than 140 brands under the umbrella of Nestlé. One of Nestlé’s cash cow product lines is the ice cream. Popular household ice cream brands under Nestlé include Häagen-Dazs, Movenpick and Dreyer’s. Nestlé acquired its financial prowess and brand equity from a few sources. Firstly, Nestlé possesses an unmatched R&D capability enabling them to research on new ice cream products to satisfy consumers’ needs and retain their loyalty. In addition, Nestlé also has a huge resource pool, which they can utilize to expand their product lineup and business portfolio through various merger and acquisitions. Nestlé entered into the US premium ice cream market in 2002 through the acquisition of Dreyer’s ice cream followed shortly by Movenpick in Switzerland and Häagen-Dazs. This acquisition allowed Nestlé to venture into highly desirable niche premium market and expand their global coverage. It was not long before Nestlé overtook Unilever as the biggest ice cream manufacturer in 2011, in terms of both sales volume and market share (Nestlé: 17.5% vs Unilever: 16%). Switzerland, despite being Nestlé’s home market, did not provide a significant inflow of revenue. On the other hand, Nestlé derived most of its revenue from foreign markets which it has penetrated into, for...

Words: 7384 - Pages: 30

Premium Essay

Paper on Industry

...The global confectionery market was valued at approximately $147bn in 2008, an increase of 3.2% over 2007. Business Insights forecasts that the global confectionery market will grow at a CAGR of 3.1% during 2008–13, to reach a total value of approximately $171bn in 2013. A shift in consumer preference towards premium chocolate and increasing consumption of healthy confectionery in matured markets, primarily the US and Europe, will drive industry value through 2013. Chocolate represents the largest confectionery category in value terms, accounting for almost half of the global market in 2008. The dominance of the chocolate category in the confectionery industry has been driven by the growth in demand for dark chocolate due to its inherent health benefits. Business Insights anticipates that cereal bars will outperform all other categories of confectionery, growing at a CAGR 5.8% during 2008–13, led by the increasing demand for nutritional and fortified foods. An aging population will drive the development of functional confectionery, including satiety enhancing gums. 2005-2007: Through this period, Nestlé‟s predominantly mass-market confectionery portfolio under-performs the market, which is largely driven by premiumisation, a trend which is largely beneficial to premium chocolate manufacturers, such as Lind & Sprüngli and Ferrero. Over 2005-2009, the largest gains in global confectionery share were made by Kraft Foods and Mars, by 10.7 percentage points (already...

Words: 2515 - Pages: 11

Premium Essay

Nestle

...You are here: UK Essays » Essays » Marketing » Nestle Case Study Assinemnt Marketing Essay We write custom essays and can help you with Essay writing Dissertation writing Assignment writing Coursework writing More... The essay examples we publish have been submitted to us by students. The essays are the student's work and are not examples of our expert essay writers' work. READ MORE See how we can help NESTLE CASE STUDY ASSINEMNT With reference to the Nestle case study, provide one example which clearly illustrates a link between topics or concepts drawn from at least two pre-requisite modules. The Nestle case study provides a number of examples which illustrate links between Strategic management, Methods of Enquiry and Accounting for decision making concepts. Nestle is one of the oldest of all multinational business. Nowadays, Nestle is one of the biggest food and nutrition companies in 86 countries in the world. (Hill, 2009 pp). Nestle was involved with a range of acquisitions in the last years in order to extend its line of products and try to expand on a geographical scale. Since its sales are reducing in developed markets, Nestle has the opportunity to expand business in up and coming countries, which is going to generate more profit for the company. Up and coming countries is one sector that Nestle is going to invest money in because it has the potential to be a strong and attractive market. Nestle feels confident in doing so because in such countries...

Words: 3852 - Pages: 16

Free Essay

Nestle

...Nestle: Sustaining Growth in Mature Markets Describe the characteristics of each of the following elements in the Current Competitive Landscape: Globalization, Technology, Knowledge, Strategic Flexibility, Quality, and Profit Pool. Nestle’ recognizes that increasing globalization is leading to the development of more and more international recommendations. Although, as a general rule, these recommendations are addressed to governments they inevitably impact on business practices. [ (Brabeck-Letmathe, 2004) ]. The internet is changing the way of doing business. It concerns business-to-business relations and also the Company’s interaction with consumers. In this respect nestle’ S.A. has an Internet Privacy Policy which is available on the Corporate Website. This policy aims to protect the privacy of the users; it covers, for instance, the accessing, deleting or correcting of information, the security of information, and relates also to tracking technologies [ (Brabeck-Letmathe, 2004) ]. Nestlé’s broad known of their products and laws that are required in order to design different product are impeccable. Needless to say one company has to know about water, using raw materials, nutrition for not only infants but everyone including animals. Nestlé’s knowledge of human rights gives them a strong understanding of strategic flexibility. Nestle’ recognizes that governments are ultimately responsible for the establishment of a legal framework for protecting human rights...

Words: 1293 - Pages: 6

Premium Essay

The Battle for the Breakfast Cereal Market

...THE BATTLE FOR THE BREAKFAST CEREAL MARKET, by Richard Lynch 1. INTRODUCTION Corporate strategy is certainly a topic that is exciting and challenging. It makes fundamental decisions about the future directions of organisations. And it has the potential to have a real impact on people's lives. But it isn't the easiest subject to study. There are several reasons for this: *It's a young academic subject when compared to more traditional topics like economics and organisational behaviour. This means that there is a lot that we still don't understand. *It's a complex subject that involves many different aspects of organisations, all of which may be important. This makes it difficult to record and analyse. *And it's a subject that lacks a widely agreed body of accepted knowledge. Different strategists have different opinions on what is important and how strategy should be developed. All these factors make it quite tough. Certainly, some strategists argue that there is a place for strategic analytical frameworks like Professor Michael Porter's Five Forces. But the same strategists also point out the most successful strategies need to be more experimental and creative. For example, they argue that the successful strategy of Dell Personal Computers - selling directly to customers, cutting out the distributor - owed much more to innovation than to traditional strategic analysis. In more general terms and arguably to oversimplify strategy theory, strategic processes need to be both prescriptive...

Words: 8269 - Pages: 34

Free Essay

Nestle Case Study

...Nestle's Growth Strategy and Business Development Nestle's Growth Strategy and Business Development 1.) Does it make sense for Nestle to focus its growth on emerging markets? As it can be derived from the text, Nestle generates operates worldwide with a focus on European markets, which make up 70 percent of its sales. These markets are in the mature state of life cycle of that industry and additionally demographic changes such as the stagnation of population growth rates make it very hard companies like Nestle to generate higher profits through higher sales. As a matter of fact the western economies are actually facing a downturn in output and growth, thus influencing the consumption patterns of customers, especially in the retail business. Consumer are becoming more price aware and tend to spend less while demanding at the same time for customisation, product differentiation and specialization. Another trend is the shift away from branded food and beverages towards cheap non-branded foods and beverages. Nevertheless, the introduction of non-brand own labelled products such as Food Lion offers only makes sense in a large scale in order to achieve economies of scale. As a result of increasing non-brand cheap products offered by rivals, Nestle find itself in an even more embattled market and needs to develop a new strategy either away from branding or towards a higher degree of international market penetration. Since Nestle stands for high quality and has distinctive competencies...

Words: 2040 - Pages: 9

Premium Essay

Rajendra

...Nestlé began in Switzerland in 1867 when Henri Nestlé, a pharmacist launched his product Farine Lactée Nestlé, a nutritious gruel for children. Nestlé, which means ’little nest’, is used in both the company name and the logotype and symbolizes security, family and nourishment. Nestlé is today the world's biggest food and beverage company and employs roughly 280,000 people in over 86 countries and have factories or operations in nearly every country in the world. The Nestlé family has grown to produce products that include chocolates, soups, coffee, cereals, frozen products, yoghurts, mineral water and other food products. Nestlé has continued to expand its product portfolio in the early 70’s to include pet foods, pharmaceutical products and cosmetics. Nestlé's strategy is directed by Long-term potential is never sacrificed for short-term performance or profit. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. The company’s business principles are vital to its framework for corporate responsibility. This framework also enables it to create shared value with suppliers, partners, customers and consumers across the world several fundamental principles such as innovation and renovation which ensures that the existing products grow and maintain a balance in geographic activities and product lines. Nestlés corporate responsibility involves more than what the regulations and laws require...

Words: 1454 - Pages: 6