...Nestle Porter's 5 Forces * What does the model tell you about the nature of competition in the industry? External Analysis (Porter's Five Forces Analysis) Threat of Substitute products (low) Food and beverage market has a long industry chain and big industry span so threat in substitute products is low. Giants such as Wrigley (Mars, Milkway, Snickers and etc), Unilever (Knorr, Cornetto ,Lipton Ice tea and etc) ,Coca Cola, Nestle have similar products to offer to customers. But in Nestle case threat of substitute products is high because of wide range of similar products that can compete directly with Nestlé. For example, Danone led Nestle to decreasing sales in 2009 in European Markets. In order to make a differentiation in the worldwide market Nestle should innovate its products to stay in the market and to go beyond its substitutes. Recent innovation made by Nestle health consciousness and wellness factor that has been introduced in all products of company. Threat of new Entrants (low) The company has been lunched since 1866 which gave Nestle a wide experience in the food and beverage industry. With substantial brand equity and a base of loyal customers Nestlé is at an insignificant risk from entrants. Nestlé has an advantage of holding majority of the share in the market where competition is becoming increasingly fierce in the world today. Although the food and beverage industry is very competitive and is constantly evolving with entrants, small business...
Words: 310 - Pages: 2
...Introduction The purpose of this group report is to evaluate Nestle Company industry how the company develop strategy for their business organization following the analysis of external and internal business environments. And also analyze the strategic management process as firm used to achieve their goal. The most important thing for most of business company is an understanding their successful performance among the other competitors in market place. For some parties, like shareholders, it is essential for company to make a profit and gain above average return. In the report we will identify the marketplace opportunities and threats of Nestle Company and decide how to use their resources and capabilities to pursue opportunities and overcome threats. In order to strengthen this report about the Nestle Company, there are several method to analysis the data that has been conducted, which is included such as PEST analysis, Porter’s 5 Forces model and SWOT analysis. By the end of this assignment, future strategy will be mentioned as well as our recommendations about Nestle Company that will fit into strategy orientation in order to perform well. And also to develop and implement its learning approach as the chosen large company by using different strategy. Corporate Profile and Summary: Nestle (Malaysia) Berhad Nestle (Malaysia) was established by Nestle Group (Nestle) began in Malaysia in 1912 as the Anglo-Swiss Condensed Milk Company in Penang and later, growth and expansion...
Words: 2826 - Pages: 12
...Review on Myanmar Bottled Water Industry with Porter’s Five Forces Review on Myanmar Bottled Water Industry with Porter’s Five Forces Introduction Bottled drinking water used to be a prestige product till 1990s in Myanmar. Then, the use of bottled water has grown considerably since factories were first set up in the mid-1990s. According to Myanmar Food and Drug Administration (FDA), there are 657 bottled water factories in 2013 which were rose form 320 factories in 2008. Bottled water culture has penetrated even into rural areas of Myanmar where majority of people previously held the view that bottled water was a waste of money. It is due to increasing urbanization, limited time to boil tap water, increasing suppliers and better delivery, convenience and portability. Myanmar bottled drinking water industry is currently dominated by Alpine which has 65% market share, according to the company reports. Analysis with Porter’s Five Forces An industry's competitive dynamics and profitability can be deducted by analyzing with Porter's Five Forces. (1). Rivalry among existing competitors Even though, Alpine has dominated the market, competition among second-tier brands such as Oasis, PMG, KTM , ICE, Sampar Oo, Max'2'0, Imperial Jade, KA is high. As bottled water has become a commodity-like product, customer switching...
Words: 1342 - Pages: 6
...Table of Contents I- Introduction 2 II- Analysis 3 1- External Analysis 3 i) Porter’s 5 Force 3 ii) Key Success Factors 4 2- Internal Analysis 5 i) Value Chain Analysis 5 ii) Financial Analysis 6 III- Decision Opinions with Evaluation 6 IV- Recommendation and Implementation 8 1- Short Term Activities 8 2- Long Term Activities 9 V- Exhibits 10 i) Exhibit A: Financial Ratio Analysis and Calculations 10 ii) Exhibit B: Decision Matrix 11 Introduction First time winner of the “Product of the Year” category, Ice-Fili, is the top ice cream producer in Russia. Recently, the company is experiencing tough competition by Nestlé and regional ice cream producers. Ice-Fili’s current problem is its loss in market share due to their poor quality decision-making after Russia became an open-market in 1992. Nestlé took advantage of Ice-Fili’s low reaction adjustment and is taking over their market. What should be Ice-Fili’s next move? To offer proper advice, an external and internal analysis should be conducted to analyze their environment. Analysis EXTERNAL ANALYSIS An external analysis allows us to understand the ice cream industry. It includes analyzing Porter’s 5 forces and Ice-Fili’s key success factors in comparison to its competitors. Porter’s 5 Forces 1- Threat of New Entrants High The ice cream market is attractive due to its 15% to 20% profit margin and low initial capital investment. Ingredients are acquired at low cost because...
Words: 1997 - Pages: 8
...Assignment Title; Marketing Topic; Launch of BUXTON (Nestle) Bottled water in Indian market Table of Index INTRODUCTION........................................................................................................................................... REASON FOR BUXTON TO ENTER IN INDIAN BOTTLED WATER MARKET.............................................. MARKET ANALYSIS OF INDIAN BOTTLED WATER INDUSTRY................................................................ A) Five Forces analysis........................................................................................................ B) SWOT Analysis.............................................................................................................. MARKETING STRATEGY(PRICE AND PRODUCT STRATEGY) FOR BUXTON.............................................. A) Pricing strategy........................................................................................................ B) Product strategy........................................................................................................ C) Place strategy........................................................................................................ D) Promotional Strategy........................................................................................................ CONCLUSION AND RECOMMENDATIONS...
Words: 3509 - Pages: 15
...Nestlé in 2008 PAGE LIST COURSEWORK COVER COVER……………………………………………………………………………………1 PAGE LIST………………………………………………………………………………..2 INTRODUCTION……………………………………...…………………………………3 HISTORY……………………………………………..…………………………………..4 * TIMELINE……………………………………………….………………………..7 BUSINESS MODEL AND FRAMEWORK…………………………...…………………8 QUESTION AND ANSWER………………………………………………..……………9 * QUESTION 1……………………………………………………………………...9 * QUESTION 2………………………………………………………….…………14 * QUESTION 3………………………………….…………………………………17 * QUESTION 4……………………………………………….……………………19 * QUESTION 5…………………………………………………………….………20 ANALYSIS………………………………………………………………………………22 * SWOT……………………………………………………………………………23 * PORTER’S 5 FORCES……………….…………………………………………30 * PORTER’S VALUE CHAIN……………………………………………………36 * BCG MATRIX…………………………………………..………………………39 * PORTER’S GENERIC STRATEGIES……………………….…………………41 FINANCIAL STATEMENT……………………………………………….……………44 CONCLUSION……………………………………………………..……………………49 RECOMMENDATION……………………………………………………….…………51 CITATIONS…………………………………………..…………………………………53 INTRODUCTION Nestlé is the largest food and beverage company in the world. It is also well on its way to becoming world leader in nutrition, health and wellness. Nestlé is a Swiss company, founded in 1866 by Henri Nestle. Henri Nestlé, the founder of Nestlé, was a life-saving chemist but also an innovative marketer. He used scientific knowledge to develop products that met consumer needs. He used his name to brand his products in a distinctive...
Words: 14085 - Pages: 57
...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
...and the financial crisis in 1998. As Russia’s largest domestic ice cream producer, they had held onto their market leadership for many years. However, increasing competition from foreign companies, along with the emergence of regional producers of ice cream led to Ice-Fili’s market share erosion in the recent years. Porter’s five forces model was the primary method to analyze Ice-Fili’s industry and its competitiveness in the industry. Segmentation analysis was used for further study of the ice cream industry in Russia. The analysis was carried on key variables like distribution channel, buying behavior, geographic locations, and product characteristics. Based on this model, various alternatives were considered. From these alternatives, it was possible to form a recommendation: Ice-Fili will need to focus on the strengthening of its distribution channel through various efforts including marketing and raising of capital while focusing on its long history and brand recognition. Above all, availability of its product to the consumers is the key to Ice-Fili’s success. Porters Five Forces In order to analyze the industry and environment of Ice Fili, Porter’s five forces model will be used to assess its competitiveness in the market. An illustration of the model specific to Ice Fili is displayed in Exhibit 1. The analysis will lead to the identification of various opportunities for Ice Fili, along with determination of the most appropriate strategy and associated milestone for the...
Words: 4802 - Pages: 20
...“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. ..........
Words: 3948 - Pages: 16
...http://www.5dmag.com/wp-content/uploads/2010/08/bottled-istock.jpg QUENCH BUSINESS PLAN 1) COMPARISON OF EFFECTUATION AND CAUSATION MODELS NAME: HAMIDULLAHSHIRZAI STUDENT ID: B0627MHMH0213 COURSE: MBA (FEBRUARY) SUBJECT: MSE SUBMISSION DATE: 17.04.2013 ABSTRACT This is a business plan for a new venture called Quench and in this Plan different business theories are used and different marketing Tools and techniques are highlighted in order for a new business to begin its new venture efficiently and effectively. The report covers all the relevant techniques can be used in developing a new venture 1.0 Introduction The word entrepreneur is derived from the French word “entreprendre” that means to eundertakei.i.e... The person who undertakes the risk of new enterprise. The word entrepreneur, consequently, first acted in the French language in the commencement of the sixteenth century. The word was also applied to the leaders of military expedition. But it was Richard Cantilon, an Irishman, living in France who first used the term entrepreneur to refer to economic activities. According to Cantilon: “an entrepreneur is a person who buys factor services at certain prices with a view to selling its product at uncertain prices.” Thus, to Cantilon, an entrepreneur is a carrier of risk which is non-insurable. One of the most well-known French economists Jean Baptiste Say defined the term entrepreneur in an expressive manner. According to J.B Say: “an entrepreneur...
Words: 6862 - Pages: 28
...Individual Assignment Accounting For Decisions Making ACC 70204 Daulet Amirbek 0321643 Taylor’s University MIM Aug 2015 CONTENT 1. INTRODUCTION: NESTLE MALAYSIA BHD……………………………..............3 1.1 Brief history......……………………………………………………………......3 2. INTERNAL ANALYSIS…………………………………………………………........4 2.1 SWOT Analysis……………………………………..……………………........4 2.2 Porter’s Five Forces Analysis………………………..………………………...7 2.3 PESTLE Analysis………………………………..…………………………….8 3. COMPETITIVE ANALYSIS………………………………………………………...10 3.1 Ratio analysis……………………………………………..…………………..11 3.2 Profitability…………………………………………………………..……….11 3.3 Liquidity………………………………………………………………..……..12 3.4 Solvency…………………………………………………………………..…..13 3.5 Horizontal analysis……………………………………………………………14 3.6 Vertical analysis…………………………………………………………........17 4. SHARE PRICE ANALYSIS…………………………………………………………19 5. THE BALANCED SCORECARD – VISION AND STRATEGY…………………..20 6. CONCLUSION AND RECOMMENDATION……………………………………....20 REFERENCES………………………………………………………………………..21 APPENDIX…………………………………………………………………………...22 2 1. INTRODUCTION NESTLE MALAYSIA BHD The aim of this report is to identify the important financial issues of Nestle Malaysia Bhd, according to its business situation and performance. Financial accounting will be provided in this report such as competitive analysis. It will helps to well understand the current competitive situation, determine main competitors and understand their marketing strategy. Moreover, financial analysis shows entity through...
Words: 5762 - Pages: 24
...aspectssuch as their general environment, industry environment, competitive environment, and scanthe opportunities and threats of the company. And also I am going to explain briefly abouttheir internal environment includes their resources, type of their resources, company’scapabilities, evaluate their core competencies and so on.1.1 Industry and Nestle summaryNestlé S.A. is a Swiss multinational nutritional and health-related consumer goodscompany headquartered in Vevey, Switzerland. It is the largest food company in the worldmeasured by revenues. Nestlé’s products include baby food, bottled water, breakfast cereals,coffee, confectionary, dairy products, ice cream, pet foods and snacks. Nestlé employ around330,000 people in over 150 countries and have 461 factories or operations in 86 countries.Nestlé sales for 2011 were almost CHF 83.7 billion. It is one of the main shareholders ofL’Oreal, the world’s largest cosmetics company. Nestlé history begins back in 1866, whenthe first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company. In Vevey, Switzerland, Nestlé founder by Henri Nestlé, aGerman pharmacist, launched his Farinelactee, a combination of cow’s milk, wheat flour andsugar, saving the life of a neighbour’s child. Nutrition has been the cornerstone of thecompany ever since. In 1905, The Anglo-Swiss Condensed Milk Company, founded byAmericans Charles and George Page, merged with...
Words: 5300 - Pages: 22
...-Team 5- 900-22-7377 904-46-8228 904-47-4673 904-50-0701 904-50-7922 904-52-3718 February 13, 2006 Executive Summary Ice-Fili had been successful in the past, surviving various tumultuous times including the transformation of the Russian closed economy into an open economy and the financial crisis in 1998. As Russia’s largest domestic ice cream producer, they had held onto their market leadership for many years. However, increasing competition from foreign companies, along with the emergence of regional producers of ice cream led to Ice-Fili’s market share erosion in the recent years. Porter’s five forces model was the primary method to analyze Ice-Fili’s industry and its competitiveness in the industry. Segmentation analysis was used for further study of the ice cream industry in Russia. The analysis was carried on key variables like distribution channel, buying behavior, geographic locations, and product characteristics. Based on this model, various alternatives were considered. From these alternatives, it was possible to form a recommendation: Ice-Fili will need to focus on the strengthening of its distribution channel through various efforts including marketing and raising of capital while focusing on its long history and brand recognition. Above all, availability of its product to the consumers is the key to Ice-Fili’s success. Porters Five Forces In order to analyze the industry and environment of Ice Fili, Porter’s five...
Words: 3802 - Pages: 16
...THE BROADWAY CAFE BRINGING IT TO THE 21ST CENTURY 1 THE BROADWAY CAFE BRINGING IT TO THE 21ST CENTURY 2 Abstract I just recently inherited my grandfather's coffee shop called the Broadway Café. In this paper we are going to examine how to bring it up to the 21st century. To get a better understanding of how to bring the coffee shop into the 21st-century; we are going to talk about the history of coffee and how it got started, and what life must have been like in the 1950’s. We are also going to talk about running today's coffee shops with today's technology. Wi-Fi allows us to access the Internet, check our bank accounts, and read electronic books & magazines. Another piece of technology we're going to talk about is a Point of Sale or POS unit, which is an electronic cash register. THE BROADWAY CAFE BRINGING IT TO THE 21ST CENTURY 3 History Coffee supposedly started in Constantinople, Turkey. According to the International Coffee Organization: “The global spread of coffee growing and drinking began in the Horn of Africa, where, according to legend, coffee trees originated in the Ethiopian province of Kaffa. It is recorded that the fruit of the plant, known as coffee cherries, was eaten by slaves taken from present day Sudan into Yemen and Arabia through the great port of its day, Mocha. Coffee was certainly being cultivated in Yemen by the 15th century and probably much earlier. In an attempt to prevent its cultivation elsewhere, the Arabs imposed...
Words: 2566 - Pages: 11
... 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 and emergent. We'll explore the models of these two approaches to corporate strategy later in this exercise. The case we're going to look at is an important strategic battle between two of the world's largest food companies. On one side, we have the Swiss company Nestle, which was exploring how to enter the market for prepared breakfast cereals in recent years. On the other side, we have...
Words: 8269 - Pages: 34
