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PORTER’S FIVE FORCES FOR NESTLE

Submitted By: Nimisha Walecha (E13) Sonam Mahajan (E21) Raqueem Khan (E62)

About Nestlé • Founded in 1866 by Henri Nestlé. • Henri Nestlé developed a milk based baby food and soon began marketing it. It became the first product of Nestlé. • Incorporated as a limited company in 1959 • Name was changed from Foods Specialties Ltd. to the current name in 1981 . • Employs around 247,000 people and have factories or operations worldwide.

KITKAT •

First created and launched by Rowntree Limited of England and was later produced by Nestle which aquired Rowntree in 1988.

• Quickly gained much popularity and spread to all corners of the globe. • Now available in over 70 countries in many different varieties.

USP 1. Chocolate fingers 2. Well-known strapline - Have a Break, Have a Kit Kat.

MAGGI USP 1.2-minute noodles. 2.Fast to cook and good to eat (Taste bhi, health bhi).

• It was founded by the Maggi family in Switzerland in the 19th century. • Launched in India in year 1984. • The brand is popular in India, Malaysia, New Zealand, Singapore, South Africa, Australia. • Nestle wanted to explore the potential for such an instant food among the Indian market. • Now it enjoys around 94% market share in this segment.

NESCAFE • The product NESCAFÉ – a combination of the Nes-root of Nestlé

and the word café. •

NESCAFÉ was first introduced in Switzerland, on April 1st, 1938.

• Popularity grew rapidly and soon became the beverage of choice for teenagers. • In 1965, Gold Blend was launched. •

In 1994, 'full aroma' process was invented to make the unique quality and character of NESCAFÉ even better

CERELAC • One of the most popular baby food brands manufactured by Nestle. • Easily digested by infants. • Considered very nutritious and good for babies' health and growth. • Serves as a complimentary meal for babies above 6 months. • Comes in a range of varieties:

Cerelac Rice, Cerelac Wheat, Cerelac Wheat – apple, Cerelac Wheat – honey, Cerelac Wheat – banana, Cerelac Wheat - 3- fruits, Cerelac Wheat - 4 - Vegetables

RESEARCH METHODOLOGY RETAIL AUDIT

RETAILERS’ SURVEY

CONSUMER SURVEY

ANALYSIS AND FINDINGS

Closest competitors Chocolate

Baby food

Home made food 25%

Cerelac 41%

Oats 19% Heinz food 15%

5-star 31%

Perk 24%

Kit Kat 33%

Bar One 12%

Noodles

Coffee

Coffee Beans

Top Ramens 27%

Wai Wai 7% Sunfeast Pasta 21%

12%

Maggi 45%

Nescafe 44%

Cappucino 24%

Bru 20%

Reasons for purchasing Cerelac

Kit Kat

Do not buy 30%

Taste 15%

Easily available 9%

Other 46%

Do not buy 9% Other 15%

Taste 22%

Easily available 54%

Maggi

Do not buy 0%

Nescafe

Other 4%

Other 14%

Do not buy 0%

Easily available 22%

Easily available 10% Taste 76%

Taste 74%

Is price a constraint for buying the chosen products Kit Kat

Cerelac Strongly disagree 6% Strongly agree 23%

Strongly disagree Strongly 10% agree 14% Disagree 20%

Disagree 45%

Agree 9% Neither agree nor disagree 17%

Neither agree nor disagree 32%

Agree 24%

Maggi

Nescafe Coffee

StronglyStrongly disagree agree 8% 10% Agree 15%

Disagree 44%

Neither agree nor disagree 23%

Strongly disagree 0% Strongly agree Disagree 15% 17%

Neither agree nor disagree 23%

Agree 45%

PORTER’S FIVE FORCES MODEL

Study Of Nestle Products With Respect To “Porter’s Five Forces”

Kit-Kat New entrants in the marketSnickers

Supplier power:Limited option for the suppliers

Competitive rivalry :Cadbury

Substitutes:Perk,5star,Foreign chocolates

Buyer power:- Lots of options, Price being a constraint

COLD WAR

Nestle Kit kat Vs Cadbury Perk…

Nescafe Threat of new entrantsNo potential threat

Supplier powerCompany has lots of options

Competitive rivalry Bru

Substitutes

Bru,SouthIn dian filter coffee

Buyer PowerPrice a constraint, lack of choices

Maggi New entrants no potential threat for maggi

Supplier power is less

Top rivalry Top ramen

Substitute Chowmein, fast food

Enjoys considerable market share

Cerelac New Entrants: No potential entrants

Limited power to suppliers

Enjoys virtual monopoly

Substitute Home made food, Heinz baby food

Buyer power Holds a huge chunk of market

RECOMMENDATIONS Maggi • They should target ‘Rural market’ too. • They can think of extending the ‘Maggi’ product line.

Nescafe • They need to consider the price factor in order to have a stable position in the market. • Proper research should be done while launching a new product. • Should take in consideration the Indian psyche. • Should act like market leader rather then follower.

Kitkat • Need to Find a unique strategy for making it a success in the Indian market. • Should look for product differentiation.

CONCLUSIONS • Maggi is undoubtedly the market leader, having no potential threat from its substitutes or any new entrants. • Nescafe is facing a tough competition from Bru as its substitute. • Kitkat faces a severe competitive rivalry from Cadbury chocolates. • Cerelac enjoys the market monopoly as there is no other major supplier of healthy baby foods.

THANK YOU