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Nestle Five Forces
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| Words: 1295 | Submitted: 22-Dec-2012
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DescriptionPorter Analysis of Nestle.
Table of Contents
Through the years, Nestle has emerged as a multi-national company that serves as a brand in itself as well as an umbrella company for many well recognized processed food commodity brands. Nestle was established in 1867, with the distribution of its first product, a dehydrated baby food; this product quickly made the company profitable. Through a series of well-coordinated mergers and the growth of a vast selection of innovative food products, Nestle became the global giant it is today. Nestle’s success can be attributed to its deep agricultural supply chain, strong local market teams, hiring from within, and long tenured CEOs. Nestle has become the epitome of innovation and success in the retail food product industry.
In 1996 Nestle established the Nestle Environmental Management System (NEMS) in an attempt to produce more environmentally friendly products. NEMS required innovative eco-design in the company’s products and activities, and gave preference to suppliers who worked to improve their levels of efficiency and sustainability regarding their use of resources. Aside from this, NEMS also requires independent environmental auditing regarding the practices of the company. In addition, environmental awareness training for the employees and business partners is required.
Nestle launched Sustainable Agriculture Initiative Nestle (SAIN) in 2000 in order to optimize the transparency from farm to table and to increase efficiency and productivity. Nestle took a big risk as they were the first to implement this type of program. The program was effective and other companies such as Unilever and Group Danone adopted the idea. In 2006 they further expanded the program to make water a central area of concentration.
Nestle has established many goals throughout the life of their company. Being a highly innovative company, they are always looking for new ways to grow and develop higher quality products. Our primary goal is to maintain a competitive edge over top competitors in the industry. We want to create shared value for shareholders and society. Another goal is to maintain growth by continuing to create value for consumers by implementing an effective risk management policy. Lastly, we want to continue to uphold and expand environmental policies (i.e. SAIN, NEMS).
There are a few pertinent constraints that will affect the implementation of our goals. First, is the loss of brand loyalty due to the current economic recession. With a strain on household incomes consumers are more likely to choose generic brands over higher quality and more costly alternatives. We must make sure the ...
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