Nestle Industrial analysis

Nestle Industrial analysis

• 1.
  INDIAN FOOD PROCESSING INDUSTRY NESTLEINDIA LTD 07-02-2018
• 2.
  INTRODUCTION 2 INDIAN FOOD PROCESSINGINDUSTRY NESTLE INDIA LTD  One of the largest industries in India and ranks 5th in terms of production, consumption and exports.  It constitutes 14% to India’s GDP through manufacturing.  Main export destination for food products have been the middle east and south east Asia.  In financial year 2017, India’s exports stood at $ 1.3 Billions.  Major players – Chocolate and Confectionary- Nestle, ITC, Cadbury, Snickers etc. Milk Products- Amul, Nestle, ITC etc.  Subsidiary of Nestle S.A of Switzerland  First factory in 1961 at Moga, Punjab  Presently worlds largest and most diversified food company.  It has seven factories spread cross the country complying with Nestle quality management systems and have been certified by ISO  Nestle includes milk products and nutrition, beverages, prepared dishes and cooking aids, chocolates and confectionary.  Total revenue – Rs. 92,238 millions.  Total Profit – Rs. 9265.4 millions.  ROCE -31.78  ROA -14.37
• 3.
  INDUSTRY ANALYSIS THREATS OFNEW ENTRANTS  Diversity makes it tough for a new entrants.  Hold large market share.  Have well experienced and understanding of consumer needs.  Increased costumer loyalty. BARGAINING POWER OF BUYERS  High level of competition makes bargaining power high.  Switching cost is low for consumers.  Companies sell similar products.  Ensure customer satisfaction which creates brand loyalty. THREATS OF SUBSTITUTES RIVALRY AMONG EXISTING COMPETITORS BARGAINING POWER OF SUPPLIERS  Readily available substitute products.  Allegations against Nestle products as not been healthy for consumption.  Increase the sale of substitutes amongst health conscious people.  Largest player with more experience.  Firm spend large amount on marketing and advertisement especially during product launches.  Competition is not just for price but for product variety, creativity and promotional offers.  Due to largest market shares, it requires suppliers in massive quantities – ideal buyer for suppliers.  Long term relations with its suppliers to ensure quality of the row products  Switching cost is moderate.
• 4.
  PEST Analysis Political EconomicalSocial Technological • The company should also consider the government stability and recognize risks involved • Nestle needs to consider the changes in global regulations and maintain its quality standards • Consumer being price conscious, Nestle should price their products accordingly. • It is important to be aware of changing inflation, income levels of the consumers and economic growth rates. • Nestle promotes family time in a world of convenience through its Maggi Noodles • The company adheres to its strong values and principles in order to build the trust of its consumers • There is a tremendous scope in using e- commerce as a platform for marketing • With the help of social media, Nestle should try to penetrate different segments and create awareness about its products through various campaigns.
• 5.
  Product Positioning
• 7.
  Resource Based Viewof Nestle
• 8.
  Intangible Resources ofNestle • Human Resources • Approximately 330,000 people have been employed by Nestlé Company. • Innovation Resources • Nestlé R&D generates the innovative science and technology needed to build nutritional and health benefits into products offerings Nestlé legendary sensory excellence. • Reputational Resources • Nestlé scientists play their part in communicating the health and wellness benefits of products to consumers. • From consumer need into research priorities. • From emerging science into consumer benefits and services.
• 9.
  VRIO Analysis ofNestle Value • Resources are valuable if they help organizations to increase the perceived customer value. In 2006 Nestle became the first company to introduce the shared value approach. Nestle has focused on shared value by focusing on sectors like rural development, water and nutrition. This also builds a strong base of performance in environment sustainability and compliance. Rareness Nestle has been world leader in larger number of nutritional technologies like fermentation and probiotics, extrusion, healthy fats, foam booster technology, malt extraction, portion distribution. The company has a dedicated group of food scientists who have successfully patented a lot of their offerings, hence ensuring a competitive advantage for Nestle.
• 10.
  Inimitability • Nestle hasbeen the market leader in snack with their most popular offering, Magi. Although the inimitability is significantly low, Nestle has been able to sustain the market share with continuous and rigorous R&D and marketing. Organization Nestlé’s strategy has always been guided by its fundamental and core principles which stresses on growth through innovation and renovation while maintaining a balance between geographic activities and product lines. The company’s priority has always been to bring the best and most relevant products to people which make a difference in their lives.
• 11.
  BUSINESS STRATEGIES 1. Improvepenetration across product portfolio: 2. Making healthier products 3. Nestle India tying up with PayTM
• 12.
  References • https://www.marketing91.com/marketing-strategy-nestle/ • https://simconblog.wordpress.com/2017/08/06/nestle-india- company-analysis/ •www.nestle.in • https://www.equitymaster.com/stock-research/compare/ITC- NEST/Compare-ITC-LTD-NESTLE • https://simconblog.wordpress.com/2017/08/06/nestle-india- company-analysis/
• 13.
  THANK YOU