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Nestle SWOT Analysis

Nestle is a leading global food and beverage company with many strengths including its reputable brand name, highly diversified product portfolio across 189 countries, efficient R&D, and skilled workforce. However, the company faces some weaknesses such as heavy reliance on a few major brands and high costs associated with marketing. Opportunities for growth include expanding into online retail, health-conscious products, and developing markets. Threats include criticism over Nestle's high usage of drinking water.

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Mubeen Abdulshakoor
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433 views

Nestle SWOT Analysis

Nestle is a leading global food and beverage company with many strengths including its reputable brand name, highly diversified product portfolio across 189 countries, efficient R&D, and skilled workforce. However, the company faces some weaknesses such as heavy reliance on a few major brands and high costs associated with marketing. Opportunities for growth include expanding into online retail, health-conscious products, and developing markets. Threats include criticism over Nestle's high usage of drinking water.

Uploaded by

Mubeen Abdulshakoor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Nestle SWOT Analysis

The central purpose of SWOT matrix is to identify the strategies that an organization can use to
exploit external opportunities, counter threats, and build on & protect Nestle strengths, and
eradicate its weaknesses.

Strength Of Nestle
Nestle as one of the leading company has enormous strengths that enables it to thrive in the
market. These strengths helps not only to protect market share but also helps to penetrate new
markets.

 Reputed Brand Name


Nestle is one of the most reputed brand in the world. It has developed trust in food and
beverages industry by providing quality products of everyday use around the globe.

 Highly Diversified Company


Instead of relying on few markets Nestle sells its products in 189 countries. Nestle captured
large size market in developed and developing countries and generate most of its revenues.

 High Product Portfolio


Nestle is one of the biggest product portfolio company with more than 2000 brands for
nutrition and health consideration.

 Well Established relationships with Popular Brands


Nestle has well established relationships with other established brands like Coca Cola, General
Mills, LO’ real.

 Efficient R&D
Nestle has the world’s largest Research and Development organization. Its Research and
Development capabilities gives Nestle a competitive advantage.

 Customer Loyalty
When given choice, customers always preferred Nestle. Some families using Nestle products for
generations.

 Large Distribution System


Nestle has large distribution channel penetrated not only in urban but also in rural areas and
adopted local distribution method to work efficiently.
 Product Innovation
Nestle has successful track record of developing new products. With both the passion of our
employees and our industry-leading innovation, we are focusing our efforts on delivering even
more nutritious food and beverages for children and families.

 Highly Skilled Workforce


Nestle is investing huge resources in training and development of its employees resulting in a
workforce that is not only highly skilled but also motivated to achieve more.

 Environment Sustainability
We believe that if we are continue to grow sustainability we must ensure that we use planet’s
resources wisely. Nestle choose material with an inherently lower impact on environment. In
considering the impact of packaging on the environment we look at several indicators including
carbon footprint, water usage, non-renewable energy use and solid waste generation.

Weaknesses of Nestle
 Given the scale of expansion in different geographies the company need more
investment in technology. Right now the investment in technology in not at par with the
vision of the company.
 Much of its sales depend upon a few well-recognized brands. This makes the company
vulnerable to any sudden changes in consumer behavior.
 The company is heavily dependent upon advertising to shape consumer opinion and
drive traditional sales. This can lead to high marketing costs with a questionable return
on investment.
 Maggi was banned in India because it was found to contain additives which were
harmful. This affected the brand name of Nestle and create negative word of mouth.
 Financial planning is not done properly and efficiently. The current asset ratio and liquid
asset ratios suggest that the company can use the cash more efficiently than what it is
doing at present.
 Days inventory is high compare to the competitors making the company raise more
capital to invest in the channel. This can impact the long term growth of Nestle.
 Some of its brands, such as Carnation milk, are not tailored to modern lifestyles and are
seen as old-fashioned by some customers.
 Nestle has some divisions which are successful in one country and unsuccessful in other
countries. This may be the result off less coordination between centers and divisions.
 Russia has been a very unstable market for nestle. The general performance of nestle
often obtains a hit due to this factor.
 Nestle is an extremely diversified portfolio due to which some divisions get lesser time
than others.

Opportunities for Nestle

 Growth in online retail could open up new distribution channel that can reduce the
traffic of traditional retailers.
 Changes in lifestyles as more women in workforce, could increase the demand of
prepacked food.
 Due to increased interests in health and nutrition demand for some Nestle products
such as energy drinks has been increased.
 Due to increased mobility and car ownership demand for bottled water and snack food
has been increased.
 As people are becoming more health conscious demand for healthy breakfast such as
oats has been increased. Nestle has to penetrate more in its cereals.
 Stable cash flows provides opportunity for Nestle to invest in new product categories.
 It has partnership with other established companies like Coca Cola and LO’ real which
has opened the opportunities for company to further grow.
 Nestle have the opportunity to expand their product line like tea.
 As consumers are becoming conscious about product ingredients so company should
clearly label all the necessary information about products to capture the trust of
consumers.
 Growing middle class in developing countries like China and Africa create broader
market for Nestle products.

Threats
 The company currently receives a lot of criticism over its high use of drinking water.

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