SWOT Analysis for Nestle - Essay Example

Financial strengths – a decade-plus of strong financial results; available cash for launching new operations and/or making acquisitions. Effective R&D Department. Nestle introduces new products every year which strengthens the firm's competitive advantage.
5. Wide range of product offerings. Nestle offers one of the biggest and widest ranges of food products in the sector. They have more than 29 brands that combined make over 1 billion in annual revenues

6. Stable of popular brands.
7. Strong holding supply chain. Each part of the supply chain relies on a strong relationship with other areas. This creates an environment with people who think on the same level. It creates a team-like atmosphere (Supply Chain).
8. Good well preserved relations with suppliers and farmers.
9. Ability to customize and localize products. the ability to customize their products can be seen as a strength because they create a supply for the demand of their customers.
10. Very competent in mergers and acquisitions around the world. Nestle has been very successful in forming successful partnerships and acquiring other companies to grow and let them maintain leadership within the company (Jones, 2012).

Weaknesses

1. History of unreliable products and product recalls. They have had some trouble with their food being contaminated and containing products that were not supposed to be in it which resulted in a recall of their products
2. History of having a questionable reputation and being mentioned in shady deal-making.
3. Said to be unethical. A lot of people view Nestle as unethical which could tarnish its reputation.
4. Few to no organic profiles in its portfolio. People nowadays like healthy food people want to stay healthy by lacking these products creates a weakness for the company.
5. Bad implementation of CSR. Nestle has come across a lot of problems on an ethical level this is because they are seen as not that ethical therefore their implementation of CSR is not that good (Jones, 2012).

Opportunities
1. Reacting to Changing tastes worldwide. An opportunity for them could be reacting to the change in spices there is more and more demand for different kinds of spicy food.
2. Opportunity to make positive contributions and improvements to people's health and nutrition.
3. Opportunity to improve and develop new products. for instance, Spicy cuisine continues to sell. But how spicy is spicy? And which kind of peppers, salsas, and sauces should you offer? Or The International Trend isn’t slowing down. Consumers want bold ethnic flavors. Offer choices like Greek, Thai, South American, and other “exotic” flavors
4. Opportunity to enter and expand into new markets. For instance, healthy products are really popular nowadays which creates an opportunity for Nestle to expand in. (geographic and product).
5. Establishing new joint ventures to greaten their position on the market and learn from other companies' strengths. (Jones, 2012).

Threats
1. Threat of major global food competitors. The other major food competitors could threaten Nestle’s market share or position in the market.
2. Threat of competition from smaller, local companies who are more in touch with the needs of the local market.
3. Threat of popular large discounters. These large discounters could attract more people because nowadays the demand for cheaper products is rising.
4. Threat of food contamination (Jones, 2012). Even though they check their food thoroughly for contamination they have been reported as providing contaminated food to the market. this in term hurts the reputation of the company.

When looking at the SWOT analysis Nestle possesses a lot of strengths on which they can build and which explain their reputation. They do not have that many weaknesses; however, some of those weaknesses could pose a threat to the reputation of the company, such as their contribution to shady deal-making. When looking at the strengths and weaknesses it is clear that the strengths prevail over the weaknesses. When looking at the threats and opportunities the lists are of the same length. Read More