NESTLE - SWOT and PESTLE analysis Free essay! Download now
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NESTLE - SWOT and PESTLE analysis
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DescriptionThis essay talks about the SWOT / PESTLE analysis of Nestle and the importance of it
A SWOT analysis is a useful tool for internal assessment. The SWOT enables you to
consider the Strengths, Weaknesses, Opportunities and Threats you face, and
clarifies how you may tackle these challenges
Nestle India Limited is the Indian arm of Nestle SA, which holds a 51% stake in the company. It is one of the leading branded processed food companies in the country with a large market share in products like instant coffee, weaning foods, instant foods, milk products, etc. It also has a significant share in the chocolates and other semi-processed foods market. Nestlé's leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Milkmaid. To strengthen its presence, it has been the company's endeavour to launch new products at a brisk pace and has been quite successful in its launches.
Parent support - Nestle India has a strong support from its parent company, which is the world’s largest processed food and beverage company, with a presence in almost every country. The company has access to the parent’s hugely successful globalfolio of products and brands.
Brand strength - In India, Nestle has some very strong brands like Nescafe, Maggi and Cerelac. These brands are almost generic to their product categories.
Product innovation - The company has been continuously introducing new products for its Indian patrons on a frequent basis, thus expanding its product offerings.
Exports – The company’s exports stood at Rs 2,571 m at the end of 2003 (11% of revenues) and continue to grow at a decent pace. But a major portion of this comprises of Coffee (around 67% of the exports were that of Nescafe instant to Russia). This constitutes a big chunk of the total exports to a single location. Historically, Russia has been a very volatile market for Nestle, and its overall performance takes a hit often due to this factor.
Supply chain - The company has a complex supply chain management and the main issue for Nestle India is traceability. The food industry requires high standards of hygiene, quality of edible inputs and personnel. The fragmented nature of the Indian market place complicates things more.
Expansion - The company has the potential to expand to smaller towns and other geographies. Existing markets are not fully tapped and the company can increase presence by penetrating further. With India's demographic profile changing in favour of the consuming class, the per capita consumption of most FMCG products is likely to grow. Nestle will have the inherent advantage of this trend.
Product offerings - The company has the option to expand its product folio by introducing more brands which its parents are famed for like breakfast cereals, Smarties Chocolates, Carnation, etc.
Global hub - Since manufacturing of some products is cheaper in India than in other South East Asian countries, Nestle India could become an export hub for the parent in certain ...
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