THE CASE STUDY: NESTLE
THE EXECUTIVE SUMMARY
The project is highlighting the depth analysis of one of the Australian well-established company. In the project, we have chosen nestle, which shall be discussed in a detailed manner. This project is about the depth analysis of the Nestle Australia new innovative and the creation of the product which will be available in the market as per the customized services. With the lot of competition along with facing the global turbulences, one needs to understand the business challenges which need to be evolving and customized as per the taste of the customers. With understanding the consumer need, one need to involve or upgrade technology to save time and efforts. For this, we are about to nestle was required to mitigate the risk along with the new innovative technologies which would help in taking a stand in the competitive market. We have considered various factors detrimental which include laws, budget, strategy & various other business challenges foreseen before implementing it.
TABLE OF CONTENTS
Executive Summary………………………………………………………………….. 3
Introduction of business model………………………………………….…………… 5
Types of business Model………………………………………….………………… 6
Nestle Image…………………………………………..…………………………….. 7
Background……………………………………………….…………………………. 8
Pest analysis of nestle…………………………………….…………………………. 9
Packaging of Nestle……………………………..…………………………….…….10
Nespresso Business Model………………….……………………………………… 11
Explanation of Nespresso…………………………………………………………… 12
Nestle canvas………………………………………………………………………… 13
References……………………………………………………………………………. 14
INTRODUCTION
Nestle Australia is one of the well renowned Australian Registered parts of the Swiss Company. Henry Nestle gave his name to the world largest food and Beverage Company of the Australia. Nestle sells its products in the Australia since the 1880’s. The nestle is facing many problems in Australia as the upper – level positions are filled with the aged and experienced person who is retiring. The Less experiencing staff is working on it is disadvantage for it. Lack of proper planning has led to the shortage of talented people. There is the high turnover rate in Australia Nestle because a company has to provide benefits to employees to motivate them. Nestle had faced many problems when they introduced infant milk powder, many people go to the company and refuse to buy their product as well. Nestle has to put full training course for the employees to make it successful. Nestle has maintained the price of coffee very loo to within the affordability of the customers. Due to the low prices, farmer goes against the nestle as they get very less money on coffee. But nestle has come out of the problem by reducing the waste money of the company. The act is working on the factors which encourage anti-competitive arrangements which maintain consumer price and quality up to the level. The location of Australia Nestle Pvt. Ltd. is Home Bush bay drive (Markides, 2016).
NESTLE – A WELL ESTABLISHED FOOD COMPANY OF AUSTRALIA
SOURCE: (Koverger, 2017)
BACKGROUND
Nestle Australia is one of the well renowned Australian Registered parts of the Swiss Company. Henry Nestle gave his name to the world largest food and Beverage Company of the Australia. Nestle has shown its excellent potential in the Australia and becomes a second largest export market. Nestle official headquarters in the Australia, Oceania region, which includes nestle company various operations of New Zealand, The pacific islands etc. The nestle marketing mix shows nestle has a very strong product line which its marketing mix. The company is fully committed to the healthy and nutritional goals. The ACCC (Australian competition and consumer commission) is the government agency for the trade practices. The act is working on the factors which encourage anti-competitive arrangements which maintain consumer price and quality up to the level. The location of Australia Nestle Pvt. Ltd. is Home Bush bay drive. The Nestle sell some products:
Violet Crumble (Honey comb bar covered with chocolate)
Milo (A healthy chocolate drink)
Nesquik (Banana or chocolate powder)
Milo Bar
Aero Bar
Smarties
Milky Bar
Chokito
In 2002, Nestlé had a net profit of $5,862,100,000 USD with $69,099,000,000 USD1 in revenues. Being a top rated company of Australia, Nestle understands that the need of technology upgradation is vital for the growth and success of the company. The company has a large amount of technology available in its place. Nestle employs up to 3800 people as its working staff. Nestle has got big opportunity despite the drop in the tea and coffee markets now selling premium, fresh tea, ice tea. Nestle has high number of competitors:
Arnott’s Limited
Berri Limited
Bonlac Food Limited
Cadbury
After many disputes, Nestle has many opportunities expanding in large in food and company. Today there are many products of nestle are went through a renovation to attract more customers of different tastes and preferences. Consumers are eager for the latest innovation on the products of nestle. Consumers are getting satisfied with the prices of the company as the prices are very affordable.
PEST ANALYSIS OF NESTLE
POLITICAL FACTORS
Political Factors can affect nestle for the good and bad.
POSITIVE: If the amount of taxes per product decreases, the consumer will buy it more.
NEGATIVE: If the amount of taxes per product increases, the consumer will not buy anymore.
The food company may be criticized if it’s selling unhealthy products. The food company which operates worldwide has to follow stringent regulation.
ECONOMIC FACTORS
Economic factors can highly convert into profitability.
Property prices are very high in Australia as compare to the income level of the consumer. Most of the people opt to live in rentals. This increases demand for the rents. Increase in the rent, increase the production cost which increase the overall cost of the product. This factor may show large adverse effect on nestle.
If the income of consumer increase or decrease, then demand will be the increase or decrease vice versa.
SOCIOLOGICAL FACTORS
If the bank charge high rate of interest on the money borrowed, then nestle will not borrow money which will limit its expansion.
If nestle make unhealthy products, then people will stop buying it as they are more heath conscious.
TECHNOLOGICAL FACTORS
Upgradation of technology may enhance the effectivity of the production which will make profit in the large.
The company can take media for its promotions for its new products.
Nestle Strategies
To become the king of Food & Company, Nestle has adopted many strategies like market visibility, Promotion through each channel, communication with the customer, promoting cultures and reasonable pricing. The strategy of nestle remains stable even in that period they face challenges. This strategy has become a business model for a large number of business. Nestle had made and introduced a product that of high quality. This is true that products are highly nutritious and reliable. Even after the dynamic changes, the company remains stable maintains its position in an effective way. For the startup of any business, it is very important to promote it largely on all types of platforms. In the initial stage its good to keep the price low to attract large number of consumers.
BUSINESS MODEL CANVAS (NESPRESECO)
The positioning of the product
Customization is the key factor for the success of the Nespresso. Today, individualization is the driving element of any business market. The success of the Nestle Nespresso is the idea of making your own Nespresso according to your taste. This unique positioning helps nestle to make something unique as per consumer conveniences (Teece, 2012).
The product and service logic
The idea of unique capsule system is appreciated by the most of the people. The coffee is available in sixteen different tastes available in one vacuum packed capsule to have that freshness.
The capsules have been sealed hermetically to protect the coffee against the air, moisture to maintain the flavor and freshness of the coffee. The uniqueness of the coffee does not only depend on the flavor but also in the Nespresso machine. The machine is very highly designed and maintains the water boiling and its temperature to the optimum level (Johnson, 2015).
The value creation
Nestle core strength is the production of food and beverages. Therefore Nestle decided to develop the Nespresso system in collaboration with external design partner to design Nespresso machine design. In the future, Nestle Nespresso wants to take 80 percent of the coffee from the farmers to extend its business worldwide.
The sales and marketing
To make the vast sales, Nestle Nespresso chooses to go with uncharted channels. Earlier the retail shops were the only option to sell the product. The Nespresso depend on the internet sales which is successfully undertake by Nestle. If the offline mode of Nespresso came, the company would be the king among its competitors.
Profit
The idea of Nespresso is based on the razor – blade model. The high quality machine is sold on very reasonable price. The Nespresso capsules gross margin is around the 85 percent as compared to the drip coffee which has 40 percent margins on it (Bowman, 2010).
(Food bank. Org. au)
NESTLE BUSINESS MODEL CANVAS
KEY PARTNERS:
Machine manufacturers
General Mills
Bio Gaia
KEY ACTIVITIES:
B2B Distribution
Marketing
Production
KEY RESOURCES:
Distribution
Production
Patents
brand
Channels:
Retailers
Mail order
Call- Centre
Retail stores
Nespresso.com
Consumers want to reach with a suitable option whether online or offline.
VALUE PROPOSITION:
Nespresso Machines
Cereal (General Mills)
Nespresso Pod
CUSTOMER SEGMENTS:
Customer of all age groups
Business class
REVENUE:
Revenue is approx… $179 million(2015)
Customer willing to pay if the product is healthy
Pricing is very reasonable which can be affordable by all classes of people.
The customer to get something easy in making and healthy at the same time
COST:
Very affordable rates
The Increase in the production cost due to high rentals increase the cost of the product which should be maintained.
( Mc Grath, 2016)
NESTLE AUSTRALIA ENHANCING LIVES AND WELLBEING
Nestle supports parents in raising healthier children.
Nestle helps in developing creative products to protect skin health.
Nestle helps old dogs to maintain their dog’s health.
Nestle delivers Nespresso, a high – quality coffee.
CONCLUSION
NESTLE has successfully maintained its high position in the Australian market. In the project, we have talked about the number of products which are introducing by the company. Despite facing many problems, the company maintains its stability. There are many products of nestle like milo, smarties, milky bar, Nespresso coffee. These products have win – win situation for the products. There is a more important model which is manufacturing, nestle is walking around manufacturing model. It has a large number of people for its working. People are working on technology upgradation, giving new ideas, giving training etc. The team members are working very effectively. Nestle manufacture products sell it to the retailers, whole sellers and online (McGrath, 2012).
REFERENCES
Bowman, C. and Ambrosini, V. (2010), ”Value creation versus value capture: towards a coherent definition of value in strategy”, British Journal of Management, Vol. 11 No. 1, pp. 1-15.
Johnson, M.W. (2015), Seizing the White Space: Business Model Innovation for Growth and Renewal, Harvard Business Press, Boston, MA.
Markides, C.C. (2016), ”Creativity is not enough”, IMP Perspectives, No. 2, pp. 73-81.
Teece, D.J. (2012), ”Business models, business strategy and innovation”, Long Range Planning, Vol. 43 Nos 2-3, pp. 172-94.
McGrath, R.G. (2011), ”When your business model is in trouble”, Harvard Business Review, January-February, pp. 96-8.
Casadesus-Masanell, R. and Ricart, J.E. (2010), ”From strategy to business models and onto tactics”, Long Range Planning, Vol. 43 No. 2, pp. 195-215.