Nestle SWOT Analysis

Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestle. It is the largest consumer packaged goods company in the world with a wide range of products across a number of markets including bottled water, coffee, infant foods, ice cream, chocolate, healthcare nutrition etc. The company operates in 86 countries around the world and employs nearly 283,000 people.

 

Strengths

 

  1. Nestle logo is a significant part of the corporation’s corporate identity. The Nestle brand itself has participated key role in the corporation’s globalization efforts.
  2. Nestle is the biggest consumer packaged goods corporation in the world and pioneer of many healthy products.
  3. One of the most important strengths of the Nestle is its strong culture and human resource. Every one give emphasis to its internal growth, have committed to achieve higher volumes with strong R&D by refurbishing existing brands and innovating new ones.
  4. Nestle functions in 86 countries all over the world and has nearly 283,000 employees.
  5. It is one of the oldest and most profitable corporations in the world and market leader in different brands.
  6. Nestle is the world’s biggest ice cream producer with a 17.5% market share.
  7. Nestle has 6,000 brands or products, with a wide range of diversified and related diversified products across a number of markets.   
  8. Since the existence of nestle, it is known for honesty, integrity, full compliance with all applicable laws, and fair dealing.

 

Weaknesses

 

  1. Nestle has some divisions which are successful in some countries and unsuccessful in other ones. This may be the result of less coordination between centre and divisions.
  2. Some products are positioned victimized and not understandable to consumers in many countries.
  3. It has extremely diversified portfolio due to which some divisions get lesser time than others.
  4. Nestle has complex supply chain management and the major problem for Nestle India is traceability. The split nature of the Indian market place obscures things more.
  5. Russia has been a very unstable market for Nestle. The general performance of nestle often obtains a hit due to this factor.

 

Opportunities

 

  1. In South Asian countries such as: India, Pakistan, Bangladesh; majorities of the consumer are price-conscious rather than health-conscious. Similarly, they have also higher birth rate. Nestle have to focus on that segment too.
  2. Currently the world is recovering from the worst economic recession therefore, demand for the various products of nestle will increase due to increase in the income of consumers.
  3. Now day’s consumers have become health-conscious. Therefore it is an important opportunity for nestle to come up with variety of health-based products.
  4. Thirty percent of the countries are developed and 70% are developing and have higher GDP. Nestle must have to focus on them.

 

Threats

 

  1. Competition in consumer packaged goods is increasing due to global as well as local players.
  2. Local players in many countries are also adapting latest technology to produce healthy products.
  3. Devaluation of currencies against dollar can decrease the demand for nestle products. For example, devaluation of the Pak rupee against dollar has increased the prices of the products in Pakistan by almost 60%.
  4. Several markets nestle is entering are already mature. Poverty and food security is increasing.
  5. Developing countries are facing double burden such as: malnutrition and obesity.

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