Nestle SWOT Analysis

Author - Priyam Mukherjee

Strength

  • It is one company enlisted among Fortune 500 companies.

  • It has differentiated product portfolio ranges which helped them in infiltrating into the metropolitan cities and capture the market share.

  • It has an excess of 8000+ (approx.) brands under its name. Among these products like Nescafe, Maggi, Milky bar, Milo, Kit Kat, Milkmaid, and Nestea to name a few.

  • It has a labor strength of about 350000+ (approx.) worldwide who are continuously focusing on reaching their brand and product presence to every geographic, demographic corner of the globe across all market segments.

  • Nestle has the world’s biggest food and nourishment research center, associated with over 5000+ (approx.) Individuals engaged with the improvement of present and development of further product portfolios yet to be launched in the market. It has over 20+ (approx.) locations of R&D universally.

  • The influence of Maggi among all product portfolios because of its less consumption of time of recipe preparation gives Nestle an extra edge of brand presence with high rates of consumer consumptions.

Weakness

  • The strongest weakness along with its strength is Maggi because even because of its strong presence because of high rates of consumptions, Maggi was banned in India in the year 2015 after laboratory test showed excessive amounts of lead in its ingredients’. There were also allegations of mislabelling over flavored enhancer MSG. But later the product returned to the store after the court lifted the restrictions. Nestle, also removed the advertisement of “No added MSG” from its advertising packaging.

  • Later Nestle in early January 2020, accepted before the Supreme Court of India that Maggi has the presence of lead and other toxic ingredients’, although claiming it to be within permissible limits. The latest report suggested that the Supreme Court has revived the government case in the National Consumer Disputes Redressal Commission (NCDRC) against Nestle India seeking damage of 640 CR. The allegations which the apex court charged were unfair trade practice, false labeling, and misleading advertisement of nestle noodles portfolios brand, Maggi.

  • It has numerous brands under a single umbrella which causes market cannibalization causing irreconcilable circumstances for many of the Nestle brands

Opportunities

  • Maggi has chances to compensate for their loss of brand image by entering cereal segments i.e., Maggi oats which is slowly capturing the market because of its health-conscious nutrients benefits and a solid digestive breakfast.

  • Nestle has the opportunity of growing the business sector through its flexible supply chain distribution in the many emerging areas with the scope of entering new product segments and growing the present products in the FMCG segments.

  • Nestle has multiple Joint Ventures with General Mills, Coca-Cola, Lactalis, Colgate-Palmolive, Snow Brad Mills Products and Fronterra, etc.

Threats

  • With the intense amount of new emerging players into the market of FMCG, there are high chances of the launch of fake products, fake patents, and other copyright infringements.

  • The increased cost of procurement of raw material and rising inflation will affect the additional expansion of cost then effecting deals and brand exchange.

  • Because of excess rivalry and a large range of product portfolios, it's difficult to keep consumers for a single brand of the same company resulting in brand exchange.

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