Nestle

Task 1 (a):

New Product Summary

This business proposal is proposed for the possible launch of a new product line for Nestle. This new business idea is
formulated in order to manage competition and gain more market share which is in line with our vision and mission of the
company.
The product I like to introduce is Vita Water Vitamin Water. This is a revolutionary nutrient enhanced water beverage
that contains additional ingredients, ranging from natural or artificial flavors, sugar, sweeteners, vitamins, minerals and
other enhancements.
There is a global opportunity for companies manufacturing vitamin water. China, India and Pakistan are one of the largest
market for energy drinks in the world. Considering at Nestls current business strategy Nutrition, Health and Wellness,
thus its about time to provide people with a beverage that not only is refreshing but is equally healthy and nutritious.
As Nestle has been entering new markets like Pakistan, China and India there is a new trend of healthy eating and
drinking. With a strong distribution channel, competitive pricing, smart positioning, and aggressive advertising and
marketing VITA WATER can become one of the number one beverage in Asia Pacific region.
Vita Water will promote Nestle among people that are health conscious and have healthy food but dont know what to
gulp it down with. This is providing them with an alternative of fizzy and energy drinks. By targeting the people that are
energy drink addicts, Vita Water can help them to switch from having unhealthy energy drinks and have something
beneficial for their health.
Vita Water is in line to Nestls current business strategy and promotes Nestls name as one of the brands that has the
highest quality products. Furthermore, due to its new marketing strategy for new markets Vita Water is guaranteed to
boost sales of other nutrition based Nestle products as well.

Nestls Mission Statement (R1)

Nestls mission, in the words of our founder Henri Nestl, is to: ...positively influence the social environment in which we
operate as responsible corporate citizens, with due regard for those environmental standards and societal aspirations
which improve quality of life. -- Henri Nestl, 1857.

Nestls vision and values

To be a top, competitive, Nutrition, Health and Wellness Company providing better shareholder value by being an ideal
corporate multinational company, preferred employer, ideal supplier selling top notch products. To fully take care of its
vision of being the number one Nutrition, Health, and Wellness Company in the World. In particular, Nestle visualizes itself
to lead a self-motivated, passionate and professional workforce, proud of it heritage and positive about the future
To meet the nutrition needs of consumers of all ages from start to old age, from nutrition to pleasure, through an
innovative portfolio of branded food and beverage products of the highest quality.
To deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible
role in the social, economic, and environmental factors of the world.

Objectives

(R2)

Nestls objective is to be the worlds leading and finest branded food manufacturer while insuring that Nestls name is
one and the same with the products of the highest quality. Nestle business objective is to manufacture and advertise its
items in a way that creates value that can be carried over the long term for shareholders, employees, consumers,
business partners and national economies in which Nestl Operates. Nestle doesnt agree for a short-term profit at the
cost of successful long-term business development. Nestl is aware that its consumers have a genuine and sincere
interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that if its
consumers werent there, the Company would fail and would not exist. The company believes that, as a general rule,
legislation is the most active safety measure of responsible conduct, although in certain areas, additional guidance to staff
in the form of voluntary business principles is valuable in order to guarantee that the maximum standards are met all over
the organization. The aim of the Creating values for the company include with improve business condition for the firm. To
attain more reliable and top quality source of raw materials, enhanced government functioning and Regulatory, employed
skill and loyal workforce and superior quality products. Nestle knows that the success of a company is based on the hiring
of the right people and ongoing training and development are essential plus it obeys and follows all the applicable local
laws in each of its markets to show its commitment.

Nestls Current Business Position (R3)

Strong Sales. Operating Cash Flow, and returns to shareholders

Continued momentum, but with volatile currency values and raw material prices
Consumer confidence shaky but balanced by emerging markets
2015 goal of 5-6% organic growth and EBIT margin improvement
Focus on functional foods with higher margin, which means increased spending in R&D

With our Nutrition, Health and Wellness strategy we support people who want to live a healthier lifestyle. Industry-leading
research and development drives innovation and supports the constant renovation of our food and beverage portfolio. In
addition, our researchers are exploring the role of nutritional therapies to maintain or improve health and investigating how
we can help people look after their skin. By sharing our insights on global Nutrition, Health and Wellness challenges, by
building partnerships and by engaging with policymakers, stakeholders and key opinion leaders we strive to have a
positive impact on the societies in which we operate.
Nestle is on track to deliver on our commitments to reduce the amount of salt, sugar and saturated fats in our products
and remove trans fats, while maintaining consumer preference.

In recent years we have reinforced and expanded our Nutrition, Health and Wellness strategy with the creation of Nestl
Health Science and Nestl Skin Health. Nestl Health Science is advancing the role of nutritional therapy to change the
course of health for consumers, patients and for our partners in healthcare.
We strive to meet the fast-changing expectations of our consumers because like them, we care deeply about quality, food
safety, the environment and sustainability. Responsible behavior wherever we operate is at the very heart of what we do.

Conclusion
Keeping in view of our objectives and vision Vita Water is the most suitable product to launch to cater better market share
and increase revenue through new developed market and will provide edge over our nearest competition who has not yet
launched any such product line or if they have dont have the brand image, pre-owned market share.
Launching Vita Water will definitely promote the brands name and its image as a Nutrition, Health and Wellness
Company. Overall sales of energy drinks worldwide have doubled in the last five years. Clever marketing and product
positioning will give us an edge to boost the sale of the new product. Plus, there is a huge un-catered market that could be
provided with this new Vita Water as there are only a few competitors and there is a major market share that can be
attained and it will increase revenue in order to expand and carry out current and future business objectives.

By targeting consumers who were ready to pay a premium for healthy alternatives to soft drinks thus defending the higher
pricing of Vita Water than regular fizzy drinks. Energy Foods had always maintained a close contact with the consumers in
order to understand their tastes and preferences and Vita Water will not only enhance a better relationship with the
consumer, but will also provide consumers with a healthier day to day drinking alternate.

Task 1 (b)
PESTLE analysis (R4)
A PESTLE analysis is used as a strategic tool to measure industry dynamics through recognition of the core political,
economic, social, technological, legal and environmental forces/changes having influence on the. Below presents a
PESTLE analysis for the industry Nestl are present within and this information is then used to form a critical discussion
for the future strategic options available to the firm.

Political

1. Changing regulation surrounding food standards and marketing actions.

2. Government stability in new emerging economies question of risk as part of the internationalization
process.
3. Changing global regulations standardized practice yet adaptation to different political forces.

Economic

1. Awareness and knowledge of changing inflation, economic growth rates and income levels.
2. Changing consumer budgets, rise of the cost conscious consumer.
3. Rising price of raw material goods in relation to the need to source from sustainable suppliers.

Social

1. Changing consumer attitudes move towards healthier products in line with government initiatives
supporting balanced diets and the dangers of sugar.
2. Changing lifestyle return back to home cooking and the promotion of family time in a world of convenience.
3. The need to adapt to different cultural settings i.e. language, religious beliefs and family settings.
4. Understanding of consumer behavior is crucial to ensuring a personal approach to marketing.
5. Consumers viewing the firm as an agency for power in the wider external environment.

Technological

1. Rise of social media, consumers interacting with firms and being able to do so across a range of platforms.
2. Innovation fueled by technological developments.
3. E-commerce as a platform for development.

Legal

1.Changing nature of regulation.

2. Need to adhere to global regulations and changes across different international markets.

Environmental

1. Increased attention directed towards corporate social responsibility.

2. Environmental concerns from consumers including concerns over packaging/recycling.

SWOT Analysis of Nestle

STRENGHTS:
The greatest strength of nestle is that it includes a culture that is team focused and an open door policy. Nestle focus on
collectivism and performance orientation attitude which encourages employees to work harder. Another thing is high level
of market share and that people all over the world trust and recognizes Nestle as a big brand name. Strength is that
people trust on Nestle. It looks at achieving higher volumes by renovating existing products and innovating new products.
Strength is that they are low cost operators which allow them to not only beat competition but also edging ahead operating
excellence, innovation, renovation, product availability and communication are major strengths.IT is an important aspect
that people all around the world are becoming more conscious about health, thats why they prefer Nestle.
The only huge brand in the world maintaining its quality and taste and having the same impact on its customer

Economical yet a Leading Brand

Pure Drinking Water in market (Free of chemicals)

Strong Brand Name

Customer Loyalty

Quality Production

Supplier Relationship

Weaknesses
One major weakness of Nestle is that it is entering into markets that are already mature and can give a tough
competition to new entrants. Nestle Plain Yogurt has proved to be a Nestle weakness because it has been unable to
make its market place in USA. But Nestle by analyzing the sensitive areas can overcome its weaknesses.

Absence of important skills

Communication is weak

Lack of Awareness

Other products may have more desirable features

Low Customer Retention

OPPORTUNITIES:
Opportunities are situations that occur but must be acted upon as to benefit the organization. Opportunities most relevant
to a company are those that offer important revenues for profitable growth, those where a company has the most potential
for competitive development, and those that match up well with the financial and organizational resource capabilities that
the company already possesses or can acquire. Nestle has a great opportunity for expanding its markets because there is
a large ready market of food and beverages due to trends of eating processed food and beverage is increasing. Through
proper marketing research Nestle can cash on to these opportunities.

Concentrating on these areas can increase sales

Increase in product line

Attaining new Markets

Changes in Government policies

Technological Advances

Lower taxes

Less Competition

New Distribution Channels

Demographic Changes

Threats:
Threats refer to external conditions or obstacles that may stop a company from achieving its objectives . Nestle has to face
the threats by worldwide community due to its violation of international marketing standards. Many conferences and
campaigns have been held against Nestle in this regard which can damage the name and trust of its customers. Another
threat is due to the increasing popularity of its competitor Unilever in local and international markets.

Segments are being shared by competitors

Uncertain conditions will affect the sales (e.g. diseases of animals)

Under cutting by competitors

Competition from Competitors with better product design

Technological Advances

The consumer market may not have faith in the product

Food Contamination

Trend towards Healthy eating

Looking at the Opportunities and Threats that Nestl has to face has a direct impact on the organizations strategic
objectives and competitive position. Leading overall market position and number one or two brands in most areas. The
extraordinarily large scope of Nestls business provides for significant economies of scale in manufacturing, marketing
and administration. The research and development capabilities allow the Company to lead the way in innovation and
provides for maximum portfolio flexibility. Barriers to Entry for Nestle: Economies of scale - To be successful in todays
food and beverage sector the cost component is critical and economies of scale are a main cost driver Shelf space.
Between the shelf share of multi-billionaire brands and the recent push of retailer driven private-label products a new
entrant would be challenged into executing a successful distribution strategy.

References:
R 1: http://www.nestle.pk/aboutus/nestleinpakistan/missionandvision
R 2: https://monamajeed.wordpress.com/home/objectives-and-goals-of-nestle/
R 3: http://www.slideshare.net/LaurenDPerry/nestl-case-study
R 4: http://www.ukessays.com/essays/marketing/swot-and-pestel-analysis-of-nestle-marketing-

essay.php#ixzz42ZS2YZ5n