SWOT analysis of nestle will elaborate the strength & weakness of, opportunities & threats for Nestle company .It will provide a visual overview that will prompt discussion around the company’s strategy and situation. This SWOT analysis of nestle can be used to evaluate the position of their business. This can be used to guide overall business strategy session of Nestle. It also can be used to go deep into a specific segment like production, marketing, and sales.
Founded in 1905, Nestle is one of the leading food companies in the world. This Switzerland based company provides different types of products including breakfast, coffee, baby foods, dairy foods, confectionery, pet food, and frozen foods. Some of their popular consumer brands are Nescafe, Stouffers, Carnation, Kit-Kat, Nestlé Water, and there are many others as well.
SWOT Analysis of Nestle
Strength – In the first part of SWOT analysis of nestle, Strength of Nestle is discussed.
- Product diversity: As of October 2014, the company had 29 operating brands under which 8000 products were being sold in the market. This show the very diversity in the product line which yield a great strength for nestle.
- Distribution channels: Nestle is successfully operating in more than 100 countries which gives a real strength to its distribution channel. Including direct and indirect channels, it has operations in 197 countries. (Nestle Web, retrieved: September 2015)
- Nestle’s R&D: Nestle has a strongest research and product designing teams with great capabilities. They introduce new products through the year, which strengthen Nestle’s competitive advantage.
- Brand value and Reputation: In 2013, Nestle became one of the top ten reputable companies in the world in the annual ‘Global RepTrakTM 100’ study. A report published by Forbes (click to view the news), Nestle numbered 43th position in the World’s Most Valuable Brands.
- Acquiring and merger: Over the past years, nestle has been defeating its competitors successfully. By becoming successful mergers and acquiring other companies it’s becoming more powerful in the market.
Weakness – In second part of SWOT analysis of nestle, weakness is discussed.
- Less ability to provide good foods consistently: As consumers always look for good tasting and healthy foods, a company should consistently provide healthy foods. Nestle is often blamed for many products due to poor supplies. It is hurting the image of Nestle which is a great weakness.
- Incident in India: Recently in this year, India government sued Nestle for $100m over one of their popular product Maggi noodles, for unfair trade practices. This will bring a negative effect on sells for the long run.
- Criticism: Nestle has been criticized many times over different issues including child labor, horse meat scandal, which make it less trust worthy.
Opportunities – In the third part of SWOT analysis of nestle, opportunities for Nestle is discussed.
- Demand for healthier food products: Great intensity of buying and consuming quality foods is increasing among people. Nestle frequently tries to provide quality foods to its consumers.
- Strong R&D: As it has strong R&D teams, it has great advantages of introducing new product in the future.
- Broad Sale Channel: Nestle has been broaden its selling channel in developing countries in Africa.
- Building Partnership: it has been building partnership with other major companies such as Coca- Cola.
Threat – In the fourth & final part of SWOT analysis of nestle, threats is discussed.
- Trend toward healthy eating: As people’s concentration is increasing toward healthy foods, Nestle will have to make sure healthy foods at any cost.
- Changing trend: Chocolate and chocolate related products are the major products of Nestle. But some recent research showed that peoples becoming more health conscious toward their health which may be the main reason of decline sales of chocolate in future.
- Raising Prices of Raw materials: With the growth of the economy of the world, the price of raw materials is increasing which may harm its competitive price in future.
- Contamination: Though the main responsibility of Nestle is to run thorough quality checks of its products, the company had been thoroughly providing contaminated foods. Such actions may hurt company’s reputation greatly in future if being practiced more.
SWOT analysis of nestle showed that Nestle has great strength and opportunities as well as weakness and threats.
Sources Used To Conduct This Analysis:
- Wikipedia – 2015
- Nestle, annual Report – 2013 & 2014
- Nestle Official Website – 2015
- Forbs Magazine – 2015
- India Times – 2015
