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Friday, June 11, 2010

SWOT Analysis of Nestle

Strength
·        BRAND IMAGE
·        Marketing strategies established by the company are innovative and lure
·        customers.
·        Financial, marketing and sales strategies are formulated by gauging the
·        Periodic research carried out to judge market trends.
·        It is a large scale organization, with abundant funds and has the capability of acquiring weaker firms by throwing them out of competition.
·        example for this strength of the company.

Multinational Strengths

·        Growing Sales and profits.
·        Major shareholder in the food industry of Pakistan.
·        Aggressive Marketing.
·        Efficient Distribution networks through out the country.
·        Quality Products.
·        Environment Friendly.
·        Skilled labor.
·        Educated staff.
·        Large number of offerings.
·        Pre purchase virtual display.
·        Good background of the company.
·        Easy to approach outlets.
·         Solid Financial position
·        Strong supply chain network
·        Focus on research and development Estimations of UHT Milk Production  
Weaknesses
·        The target market of Nestle MilkPak is upper middle and high class because lower middle and poor class cannot afford to buy UHT milk due to its premium price.
·         It is a main weakness of MilkPak that there are different companies of milk but the name of nestle MilkPak is always stand in the last because of low advertising and marketing.
Opportunities

·        There are substantial growth opportunities considering the average yield of Pakistani animals at only 1,100 liters/annum as compared to 6,000 liters/annum for animals in Europe and USA. There are nearly 20 million milk producing animals in the country, mostly in Punjab (80%).
·        The overall milk market in Pakistan is 20 billion liters, out of which processed milk contributes only 3 million liters. Nestlé MilkPak along with other processed milk businesses contribute only 2% to this large market. Nestlé MilkPak has expanded its product range by entering the cold dairy market recently by launching Nestlé plain yogurt and now fruit yogurt is also added to it.
·        To expand the cold dairy products range, Nestlé fruit yogurt is the latest addition to this group.
·        The cold dairy market offers many opportunities for the company which can capitalize these products by banking on its superior quality milk.
·        The coffee brand also offers many opportunities for the company to
·        expand by tuning the taste of the masses towards coffee.
·        Credit policy can be adopted to increase sales
Threats
·        Price fluctuations due to rupee devaluation as raw material are imported. The uncertainty of economic conditions poses a great threat as the major funds invested in the country come from outside Pakistan.
·        The present economic crisis in the world, led to the withdrawal of foreign management from the company and the investment has come to a halt.
·        Competition with Nestlé’s owns smuggled brands.
Effect of Seasonality’s upon sales.
·        Imported raw material, in some of the company’s products.


Major player may enter target market Legal and ethical issues.
·        Market segment growth could attract new entrants.
·        Economic slow down can reduce demand
Two main competitors Haleeb and Olpers are main threat for MilkPak especially the Olpers is growing very fast.
·      Inflation is getting higher and higher so the purchasing power of the

people is decreasing day by day.
There is no entry barrier for new entrants as the Olpers has come in the market.

·        Taste of consumer has already developed which is hard to change.
·        Current market situation 

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