...EXECUTIVE INTERVIEW Changing the Strategy at Nespresso: An Interview with Former CEO Jean-Paul Gaillard CONSTANTINOS MARKIDES, London Business School DANIEL OYON, University of Lausanne Background to the Interview Nespresso represents one of the most innovative ´ new products developed by the Swiss giant, Nestle. The product is basically a system that allows the consumer to produce a fresh cup of espresso coffee at home. Though simple in appearance and use, it took Nestle more than 10 years to develop it. ´ The system consists of two parts: a coffee capsule and a machine. The coffee capsule is hermetically sealed in aluminum and contains 5 g of roast and ground coffee. The machine consists of four parts — a handle, a water container, a pump and an electrical heating system. These four parts are cast into a body and form the machine. The use of the Nespresso system is straightforward. The coffee capsule is placed in the handle which is then inserted into the machine. The act of inserting the handle into the machine pierces the coffee capsule at the top. At the press of a button, pressurized, steamed water is passed through the capsule. The result is a creamy, foamy and high-quality cup of espresso coffee. The new product was introduced in 1986. The orig´ inal strategy adopted by Nestle was to set up a joint venture with a Swiss-based distributor called Sobal to sell the new product. This joint venture (named Sobal-Nespresso) was supposed to purchase the 296 machines from...
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...Nespresso Table of contents I) Introduction a. Company b. Product II) STEP Analysis a. Socio-cultural b. Technological c. Economic/competitive d. Political III) Segmentation Strategies a. Geodemographic segmentation b. Psychographic segmentation c. Behaviour segmentation d. Segmentation analysis IV) Recommendations V) Sources I) Introduction Nespresso belongs to the Nestle Group but Nespresso is also its own company and product at the same time. So I will introduce Nestle briefly and will focus the report on Nespresso as an individual company/product. a. Company Nestle was built in 1866 by Henri Nestle, a pharmacist who developed baby food for babies who did not get their mother’s milk. Nestle doubled its size during World War I. In the 1920s, Nestle expanded its range of products like chocolate that became its second activity after milk. Nestle profits dropped down during due to effects of World War II. In 1947, Nestle had a dynamic phase with acquired companies like Findus and L’Oreal. In the 1990s, Nestle continued acquiring companies like San Pellegrino and others. Today, Nestle is one of the most important groups for food sales. (Nestle UK) b. Product Nespresso SA is part of the Nestle Group, it was founded in 1986. The Nespresso system is an espresso machine using pre-measured capsules. It was introduced in Japan (1987), France & USA (1991), Benelux &...
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...TASK 3: 1. INTRODUCTION Nespresso is an operating unit of the Nestlé group based in Switzerland. Since the 90’s Nespresso sell machines, which have a market success. Packaged portions of espresso coffee are one of the fastest growing segments of the coffee market. It has between 20 and 40% of the value of ground coffee sales in the European coffee market, which totals USD 17 billion. Nespresso sales have been growing at an average of 30% per year over the past 10 years and more than 20 billion capsules have been sold since 2000 at a current selling price equivalent to about USD 0.43 to USD 0.62 per capsule. Furthermore, Nespresso reported annual sales of USD 3,22 billion in 2011, growing by 20% during the fiscal year. The aim of Nespresso is to become the icon of the perfect coffee worldwide and to be established at the super premium brand. 2. 5 FORCES, MODEL OF PORTER a. Rivalry among competiting sellers Competitive intensity of the market is strong because of the many multinational that manage the market and who have a couple of coffee brands each one. Furthermore, Nespresso did have a patent for his capsules. But now, different companies have the right to manufacture capsules. Nespresso has not the monopoly on the portion capsules market now, and the rivalry is constantly increasing between the giants of the coffee market. b. Buyers Buyers have no bargaining power with brands that manufacture and/or distribute this portioned coffee. These are brands...
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...Corporate baCkgrounder © Nestlé Nespresso SA, Corporate Communications, March 2013 Coffee is at the heart of all we do. yet consumer pleasure is why we do it. at a gLanCe Coffee is at the heart of all we do. Yet consumer pleasure is why we do it. The Nespresso story began with a simple but revolutionary idea: enable anyone to create the perfect cup of coffee – just like a skilled barista. From its beginning in 1986, the Nespresso brand concept has redefined and revolutionised the way millions of people enjoy their coffee today, and it has shaped the global coffee culture. Nespresso is not just a coffee. It is a genuine experience that combines perfection and pleasure, simplicity and aesthetics. Nespresso has evolved from being the pioneer and trendsetter into the reference in the portioned coffee category through a singular focus on delivering the ultimate coffee experience to our consumers cup after cup. This is the cornerstone upon which the company was founded, and it is the foundation that has fostered the incredible growth we have enjoyed over the last 27 years. Our success is built on creating the highest quality Grand Cru coffees, long-lasting consumer relationships and sustainable business success. These will continue to be the Key Growth Drivers of our business moving forward, as we compete in the dynamic and growing portioned coffee category. Nestlé Nespresso is a company without boundaries, with both a direct business-to-consumer and business-to-business approach...
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...Introduction : Launched 30 years ago, Nespresso is a subsidiary of Nestlé and one of the world’s leader on the coffee market. The brand became famous through its coffee makers working with pods, it is also Nespresso who opened the coffee pod segment as it was the first company to launch coffee makers working with pods. Nespresso wanted to innovate by creating the “Nespresso experience”. In this case, we will analyze the company and its strategies through the SWOT. SWOT analysis Internal diagnosis STRENGTHS A high visibility internationally: Nespresso, is part of Nestlé, which is one of the worldwide leader concerning consumer goods products: the turnover represents 58 billion euros, the company employs 250 000 people in 85 countries. So, Nespresso takes benefit from the visibility and the financial power of Nestlé. It enables Nespresso to have a better access to R&D and communication skills. Being part of the Nestlé Group helped Nespresso to become the European leader in the production of espresso machines. A high focus on the clients: One of the key factor of the success of Nespresso, it is that their strategy is based on their relationship with their clients. They listen carefully to the consumer needs and demands in order to promote fidelity within their clients. Excellence and high quality products are part of their strategy. Hence, the products have some particularity in order to enhance the unique aspect of Nespresso: - Very high quality products and a large range or...
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...Nestlé and Nespresso Based on the case study of Nestlé refines its arsenal in the luxury coffee war of the coffee war, this case talked about a subset of the coffee war that currently brewing in Western Europe between Nestlé, Sara Lee and Ethical Coffee. Nestlé is the incumbent in the market with a monopoly over its home coffee system with 1,700 patents. It has become one of the company's so-called "billionaire brands" with sales last year of $2.6bn. The Nespresso SA company was founded in Vevey, Switzerland in 1986 under the ownership of the Nestlé Group. Nespresso partnered with a Swiss manufacturer, Turmix, to produce and launch the first Nespresso coffee system in the office coffee market in Switzerland and Italy. Nestlé produced the first coffee capsules at its Swiss factory in Orbe. Nestlé traces the roots of Nespresso back to the belief that consumers wanted to have cafe‐style espresso experiences in the home and work place. Nespresso believed that the perfect combination of the highest quality coffee, water and air pressure was necessary to deliver a superior espresso. With this thinking the Nespresso system was born. Since 1986 Nespresso has expanded beyond its initial partnership with Turmix for production of its Nespresso machines. Today, Nespresso counts as partners such precision manufacturers as DeLonghi, Jura, Koenig, Krups, Miele and Siemens, all of whom provide a global distribution network of precision Nespresso machines. These machines, starting at €149...
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...------------------------------------------------- March 01, 2012 How a brand could go ahead: Nespresso Nespresso, Swiss brand, was a separate company created in 1986 as a 100% owned Nestlé affiliate aiming to further develop, produce and market the Nespresso system. The product consisted of high quality coffee packed in aluminum capsules for exclusive use in specially designed machines. There were eight available coffee varieties. With this product, Nespresso was developed as a totally innovate system. However, the company had to face some troubling signs of market. Nespresso was on sales fields for both the machines and the capsules, but at the end of 1987 just half of the manufactured machines were sold, and without the machines further coffee capsules would not sell. Consequently to this, the machines had defects that were consuming much of the maintenance and service budgets that were covering in total by Nestlé. We can see at this point, that one of the causes of the losses of the company was the slow sales in non-traditional espresso markets like japan. Given this situation, we can identify two problems faced by the company: the first one was a problem of distance with the customer, and the second one, it seems as if the company had forgotten its primary purpose: the sale of coffee, not machines. For the first issue, Nespresso had to have thought about the customer (what he wanted) within its distribution strategy. In addition, Nespresso needs to think on a way that the customer could buy the desired...
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... The Nespresso story began over 27 years ago with a simple but revolutionary idea: enable anyone to create the perfect cup of espresso coffee just like skilled baristas, but in your little environment. The Nespresso concept has redefined and revolutionised the way millions of people enjoy their espresso coffee today. It has shaped the global coffee culture. Thanks to continuous innovations and highest quality, Nespresso has evolved from being the pioneer and trendsetter for portioned coffee into a worldwide reference. Let’s go back to the start of this amazing journey! In 1986, Nestlé Group founded the company Nespresso SA. It was inspired by Luiggi Bezzera’s original espresso coffee concept. It developed a revolutionary system of portioned, encapsulated coffee and dedicated machines that interact to deliver what was expected to be a perfect coffee. But only four initial coffee varieties included Capriccio, Cosi, Decaffeinato and Bolero (now known as Volluto) were offered. And the first two machines offered (the C100 and C1100) are designed to resemble mini espresso machines that people were used to seeing and enjoying at cafés and restaurants. In 1989, Nespresso first tested the Nespresso system in the Swiss household market with Turmix as machine partner. . In 1991, Nespresso SA takes a huge turning point deciding to produce their own machines exclusively with Eugster, which becomes their exclusive producer. Within the same year, Nespresso enters the markets...
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...Nespresso coffee shop Salalah Name: __________________________ ID: ______________________________ Table of Contents Executive summary 2 Company Summary 3 Product/ Services Summary 5 Strategies – Marketing & Sales 7 Management Summary 8 Organizational Chart 9 Financial Statements 10 Balance sheet 12 Feasibility Business Idea and its suitability to Oman 12 Conclusion 13 Executive summary Nespresso coffee shop is a coffee shop that is located in Salalah exactly in the Alsaada north . That is a complete list of moderately priced "comfort" food influenced by Arab cooking traditions but on the basis of time-honored recipes from around the world. Section of the cafe and Nespresso coffee shop features a cafe with candy bar, and magazines, and space for live performers. This shop is basically the franchise that was introduced by the Nespresso the international brand of Coffee. This Coffee shop was not till now available in Salalah Oman. So, the opening of Salalah branch will provide a unique taste of coffee of an international brand. This business plan offers financial institutions an opportunity to review our vision and strategic focus. It also provides a step-by-step plan for the business start-up, establishing favorable sales numbers, gross margin, and profitability. This plan includes chapters on the company, products and services, market focus, action plans and forecasts, management team, and financial plan. Company Summary The "Nespresso...
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...Executive Summary INDEX NESPRESSO COMPANY INTRODUCTION Internal and External Analyses Introduction of the model The methodogy used to analyse Nespresso Business Model is ‘Business Model Generation’ by Osterwater and Pigneur 2009. The methodology uses a model named Canvas, which divides the business model into 9 segments. The concept is simple, relevant, and understandable to analyse a company. This concept has been applied and tested around the world and is already used in organizations such as IBM, Ericsson and Deloitte. The nine basic building blocks are shown in the logic of how a company intends to make money. The nine blocks cover the four main areas of a business: customers, offer, infrastructure, and financial viability. The business model environment of the company is analyzed in the external analyses using a mythology designed by Osterwater eg. The four main area of the environment are; Industry forces, key trends, market forces and macroeconomical forces. External analyses In this section the external environment influences on a company such as Nespresso are analysed into a treat or an opportunity depending on the implication on the E-business strategy of Nespresso. 1.Market forces 1.1.Global coffee consumption is growing World consumption has been growing at an average of 2.5% annually since 2000. This development indicates an opportunity for Nespresso as consumers will purchase more coffee. 1.2.Sustainability in the coffee...
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...marque Nespresso A. Descriptif de la marque Nespresso est une marque de Nestlé, groupe suisse, leader mondial de l’agro-alimentaire. Créé en1989, Nespresso redonne au café une image de luxe, de produit haut de gamme qui au delà de sa valeur d’usage, procure un moment précieux, de plaisir et de détente. La signature résume, à elle seule, l’originalité et la force de cette marque dont toute la stratégie marketing consiste à nous faire oublier le produit pour nous proposer un art de vivre et de consommer autrement. B. Analyse stratégique du marketing : Le marché du café est segmenté en deux grandes parties : le moulu et le soluble. Voici un schéma qui représente la segmentation du café du point de vue de l’offre et donc de la position de Nespresso et de ses principaux concurrents : Café Moulu Soluble Dosettes Filtre Home Café Tassimo Malongo Nespresso Senseo En ce qui concerne la demande, nous avons cherché à déterminer les utilisateurs du produit et par la même occasion d’établir la (les) différence(s) entre les consommateurs de Nespresso et ceux de ses concurrents. Le sexe et la zone géographique n’étant pas significatifs pour segmenter Nespresso, nous avons retenu l’âge et la CSP. Café Age CSP - 28 ans 28-49 ans CSP + 50 ans + CSP - CSP ++ Nespresso Home Café Malongo Nespresso ...
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...Strategic Analysis of Nestlé and its Competitor Kraft Foods Course: International Business Strategy (IB BA) Professor Lewis University of Applied Sciences Dresden Project Members: Katerina Schneiderova Sandra Merkel Nicole Klötzer Carolin Wiese Samuel Weimer Nicole Schröder Date: 11th June 2010 Executive Summary In the following, two companies and their strategic positions within the coffee consumer goods industry will be described. The focus lies on Nestlé and its competitor Kraft Foods. As coffee is one of the most popular products worldwide, this is a very demanding business. It is necessary to provide high quality products, especially when working in the more affluent segments like Nestlé and Kraft Food do. Several political, economic, social, technical, environmental and legal aspects have an impact on the industry branch they are operating in. In addition, there is not only a differentiation in Robusta and Arabica coffee, but also in filter coffee, portioned and non-portioned soluble coffee. To satisfy the diverging needs of all customers, different strategies are applied to gain more market share. In this report it is examined how those companies operate in the specific business context, what they have in common and where they differ. Furthermore, an analysis of the industry attractiveness, of the market segmentation and value chain and an overview of resources and capabilities are part of this paper. After intense research...
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...rapport toch een bijdrage kunnen leveren aan dit bedrijf, zouden wij dat als groep natuurlijk een zeer mooi resultaat vinden. Wij hopen dat dit rapport door iedereen met plezier gelezen zal worden en het voor deze en genen nog eens van pas kan komen. Tot slot wensen wij eenieder succes bij het kiezen/verbeteren van de strategie en hopen wij dat dit rapport u daarbij op weg mag helpen. Ramon Vermaak Koen van Haasteren Martijn van Beek Januari 2012Samenvatting Opdracht: De opdracht voor het vak strategie was een bedrijf uit te zoeken en deze geheel te onderzoeken aan de hand van een interne en externe analyse en op alle strategische niveaus. Wij hebben hiervoor het bedrijf Douwe Egberts gekozen. In het rapport trappen we af met de visie en missie, het waardebod en de marktafbakening. Gevolgd door de kern, die bestaat uit de interne analyse, de externe analyse aan de hand van de...
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...Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I illycaffè: Value Creation through Responsible Supplier Relationships Francesco Perrini and Angeloantonio Russo SDA Bocconi Francesco Perrini and Angeloantonio Russo prepared this case study, as a basis for class discussion rather than to illustrate either effective or ineffective handling of a business situation. Copyright © 2007 SDA Bocconi University and EABIS. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the express permission of SDA Bocconi University and EABIS. About the Project This case was written as part of a project on “Curriculum Development for Mainstreaming Corporate Responsibility,” coordinated by INSEAD and London Business School and supported by the European Academy of Business in Society (EABIS). The project aims to develop degree and executive programme designs and teaching materials that will assist the process of mainstreaming the area of corporate responsibility into core disciplines in management education and increasing its inter-disciplinarity. Within this context, EABIS members from across Europe have been invited through an open call to submit case proposals with the intention of developing a range of cases across a number of subject areas for use by mainstream faculty. The open...
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...“Strategic Management Of Nestlé” INDEX 1. 2. History Nestlé and basic financial information. ...................................................... 1 Porter’s Five Forces Model.................................................................................... 2 3. Analyze the product/service offered by the company using the B – C framework. What affects the customers’ willingness-to-pay (B)? Where do firm’s costs come from (C)? ... 2 4. Analyze the resources and capabilities of the company. Indicate the key resources and capabilities. ...................................................................................................................... 4 Tangible Resources of Nestlé ................................................................................................................... 4 Intangible Resources of Nestlé.................................................................................................................. 4 Capabilities of Nestlé................................................................................................................................. 4 5. In class, we discussed two types of Porter generic strategies (cost advantage and differentiation advantage). Indicate which strategy the company pursues. Explain. ................ 5 Research and development of new products. ........................................................................................... 5 Competitive differentiation. ..........
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