Nestle Inc - Situational, Competitors, and Market Analysis - Example

1.0 Company analysis Nestle Inc is the leading wellness, nutritional and Health Company. Their mission is "Good Food, Good Life” which means that they aim at providing customers with a wide range of beverages and food which is the best tasting. The company has been committed to manufacturing the best food for over one century now all with the aim of fulfilling the needs of each and every consumer. The company was established by Henri Nestle in Switzerland. The company has over 500 factories, 500 products in 86 countries covering almost each and every continent. The main objective of the company is to be the global leader in health, wellness and nutrition and to be a point of reference in the confectionary industry based on financial performance, customer care and quality. Nestle Inc. believes that market leadership is not just about the market size but about trust. They also recognize that trust is earned over time by delivering on their promises to the customer’s consistently (Nestle Inc, 2014). Their goals include: To manufacture and sell the products of the company in such a way that value will be created and that value will be sustained in the long term for their customers, shareholders and business partners To focus on the long term development of the business as opposed to the short-term profitability To attract customers by giving them value to ensure continued growth and guaranteed customer satisfaction Nestle Inc marketing strategy is to build on customer relationship management by ensuring that they produce what the customer needs to satisfy their needs. They listen to the complaints and suggestions of the customers to ensure that what they produce is in line with what the customer wants(Nestle Inc, 2014). 2.0 Situational analysis 2.1 Environmental analysis This refers to forces in the external environment that are beyond the control of the business but affect the operations of the business. To analyze the external environment, a PESTEL analysis is used. By undertaking a PESTEL analysis, Nestle will be able to evaluate the impact of each factor on its operations and help maximize opportunities and minimize risks 2.1.1Politica This refers to the political situations which can affect the operation of Nestle. Australia has maintained a stable liberal democratic political system that is suitable for any business. The country has pay great attention to protect natural heritage through environmental laws. Australia ranks highly in many international comparisons of national performance, such as quality of life, health, education, economic freedom, and the protection of civil liberties and political rights. However, Reduction in tariffs will however make competition stiff in the Australian confectionary industry (World Fact book, 2014). 2.1.2 Economic Refers to economic factors that affect operations of the business where currently the Australia is experiencing rise in GDP, low inflation, low rates of unemployment, and stable financial system. The country economy has not been weaken by the global crisis as it has experiences continues growth over the last 20years with the growth rate averaging at 3.5% per annum. Moreover, Australia is an island continent located in the Oceania between the Indian Ocean and the South Pacific Ocean and its placement is an added advantage to a business when it comes to export and imports. However, increase in fuel prices may increase the cost of production for Nestle(World Fact book, 2014). 2.1.3 Social Much of Australia’s history has been focused on assimilating different cultural groups into the predominantly British Australian traditions where it has a diverse culture with the ethnic groups consisting of 92% White, 7% Asians and the other ethnic group’s making1%. Moreover, the citizens of Australia view Nestle as a nation brand that they are proud of hence a very good target country(World Fact book, 2014). 2.1.4 Technological E-commerce is a very big in Australia and significantly helps international business and this would assist Nestle in terms of reduced costs, lower overheads, less initial outlay of capital and greater accessibility to the large population of Australia as it is argued that technological development is a main marketing tool today (World Fact book, 2014).Overall, this would help us realize a faster turnover on our investment 2.1.5 Environmental Although most of Australia is semi-arid or desert, it has multiple environmental laws to protect its natural heritage and minimize the extent of impact and this may affect the operations of Nestle if not followed (World Fact book, 2014). 2.1.6 Legal Australia is ranked number 11 by the World Bank in relation to the transparency of governance system and ease of doing business since the country has flexible business laws making the procedures of operating a business simple and achievable(World Fact book, 2014). 3.0 Competitor’s analysis 3.1 Major Competitors Nestlé’s major international competitors include Mars Incorporation, PepsiCo, Kraft foods and Mondelez International Inc. Kellog is another major competitor of Nestle and manufactures ready to eat cereals and convenience food such as savory snacks, cookies, toaster pastries, crackers, and frozen waffles and these products are manufactured by the company in 18 countries and marketed in 180 countries. Mar manufactures food products such as chocolates, chewing gums. Beverages, and operates across, Russia, Europe, Asia and North America.The company also faces completion on its specific product ranges from many companies such as Sara Lee. As shown by the diagram below, Mondelez International Inc has the largest market share of 35.6% while Nestle is ranked 3rd (Marketline.com ,2013). . Market analysis Nestle Inc sells its products in the confectionery market which comprise of cereal bars, chocolate, gum and sugar confectionery. The confectionery market is Valued in terms of the retail selling price. In the recent past, the confectionery market in Australia has been experiencing moderate but steady growth and this forecast will extend to the year 2017. The Australian confectionary market totaled to of $4.1bn in 2012. Chocolate makes up the largest segment in the confectionary market taking 58.5 % of the total market followed by the sugar confectionery segment which makes 25.3% of the confectionery market, followed by cereal bars which make up 9.9% of the confectionary market and gum which make 4.4% of the total confectionary market (Marketline.com ,2013). In relation to the geographic market segmentation, Australia make up 13.4% of the total Asia-Pacific Market. Mondlez International Company is the major player in the confectionary market of Australia taking upto 35.6% of the total market share, followed by Mars Inc taking 19.5 % of the total market share then Nestle Inc comes in at number 3 with 17.6% of the total market share, Kelogg Company takes up 6.4% and other companies take up 21% of the market share. When it comes to the distribution of the products, hypermarkets and supermarkets are the leading distributors in the Australian Confectionery market taking up to 45.2% of the total market share. Convenience stores take up 25.8% of the total share, independent retailers take up 14.6%, service stations take up 5.1% and others take up 9.3% of the total share. The Australian Confectionery market is forecasted to reach a volume of 262.7 million kgs which is an increase of 6.5% from the year 2012 with the growth rate of the confectionery market predicted to be 1.3% per year (Marketline.com ,2013). References Nestle Inc (2014) About us. Retrieved on 31st March 2014 from http://www.nestleusa.com/about-us Nestle Inc (2014) Strategy - Nestlé Roadmap to Good Food, Good Life. Retrieved on 31st March 2014 from http://www.nestle.com/aboutus/strategy Marketline.com (2013) Confectionery in Australia. World Fact book, (2014). Australian profile. Retrieved on 26th march 2014 from https://www.cia.gov/library/publications/the-world-factbook/geos/as.html Read More