Nestle - Swot Analysis

SWOT Analysis

Looking into the global endeavors undertaken by Nestlé , its internal strengths and weaknesses and external opportunities and threats can be summarized as follows :-

STRENGTHS :-

 Product portfolio - Over 140 years, Nestlé has served customers all over the world with a wide range of products ranging from global icons to local favorites. Its wide and diversified product line attracts consumers from all over the world and from all segments of society.

 Creation of brand loyalty - With a large number of consumers worldwide, Nestlé has successfully established itself as one of the leading brands in the global food industry.

 Geographic presence - With operations extending to over 83 countries and products sold in 143 countries, Nestlé has been able to successfully position itself as a truly global company. Also, its contribution towards social causes in various underdeveloped nations has strengthened its position in the global arena.

 Research and development - With changes in technology all over the world, Nestlé is focusing on ways to reach large consumer markets through innovation and introduction of products that attract consumers from all spheres and demography of society. Alongside Nestlé Health Science, the Nestlé Institute of Health Sciences, also set up in 2011, will continue its world-class biomedical research to better understand health and disease as influenced by genetics, metabolism and environment with the goal of translating this knowledge into personalized science-based nutrition. Nestlé's continuing research with an efficient team of scientists to improvise its product line and meet the growing needs of customers at local and global level, is one of its biggest strengths.

 Organization's culture and values - Nestlé aims to achieve customer satisfaction through evaluation of competitiveness and delivery of quality products, along with creating value for the society as a whole. Its culture binds the products to the people, thereby delivering value to its customers.

 The Chairman, Peter Brabeck and his efficient team is yet another competitive advantage of Nestlé

 Business strategy - The company's business strategy of customization rather than globalization is one of its biggest strengths. Nestlé moves into consumer markets by using Niche market strategy to become the market leader in each of the niches. Nestle owns about 8500 brand names, but only 750 of them are registered in more than one country and only 80 are registered in more than ten countries. This is due to the fact that Nestlé's strategy is based on a broad range of local brand names which are not entitled as "Nestle". The company uses this approach in order to reach the consumers easily as they are accustomed to those local brand names.

 Sustainable growth - For 2011 the Nestlé Group reported sales of CHF 83.6 billion and 7.5%organic growth on top of good growth in recent years. The organic growth was composed of 3.9% real internal growth.

WEAKNESSES :-

 Penetrating markets by associating with local brands and products and having too big range of products may hamper brand equity. This would happen if the local brands are not as committed as Nestlé about delivering value to its customers. Due to a minor quality difference in the local products Nestlé associates itself with, its brand image may be tarnished.

OPPORTUNITIES :-

 Transition into a company that focuses on 'nutrition, health and wellness' - Huge investments in baby nutrition, age-specific products, low-calorie products and health education is a major step taken by Nestlé towards preserving its quality and delivering the best value to its consumers. Its research and development team's health-oriented approach to create the products has been a major reason