In the health and wellness industry, Nestle is the second largest business and is focusing more on emerging markets, especially Asia Pacific and Latin America. The company has a significant position in functional/fortified products, chiefly bottled water and milk formula.

Strengths

  • Reputation of Brand: Nestle worth around $7bn. The company is famous across the globe and has a good reputation, which is increasing day by day.
  • Proficiency in Acquisitions and Mergers: Over the passage of time, Nestle is able to form strong partnerships, as well as acquire other firms to maintain and grow its leading position in the marketplace.
  • Geographic Presence and Distribution Channels: Nestle has operations in over 100 countries of the world and has wide-ranging distribution channel across the globe that supports its operations across the world.
  • Research and Development Capabilities: The Company made an investment of over $2 billion in Research and Development. Nestle is redesigning and introducing new product line each year, which strengthen Nestle competitive edge.
  • Diverse Brand Portfolio and Unmatched Product: Nestle provides one of the broadest product line in brewery and food products. The company has almost 29 brands, with an annual revenue of about $1 billion. With over 8,000 products, it is not easy for any business to offer significant competition to Nestle.

Weaknesses

  • Lack of Consistency: Nestle found it difficult to remain consistent in terms of food quality. The company recalled several products because of poor quality and food contamination supplies. This hurts business sales and reputation as not able to control product quality.
  • Weak CSR implementation: Nestle has publicized and is engaged in several CSR activities that intended to make Nestle more environmental friendly and enhancing the suppliers’ working conditions. Yet, the company received huge criticism over its CSR program effectiveness.

Opportunities

  • Increasing Customer Demands for Healthy Products: The consuming and buying trends in the food industry has changed to healthy food items, which opens a new door of opportunity for businesses.
  • Presently, the company tries to add new products to its basket in response to market change.
  • Acquire New Firms Experts in Healthy Products: Several new businesses are launching and forming new products for health or transforming the means those good are made. It is easy and cheap to acquire startups. The company is emphasizing on offering more healthy products and refers to a good opportunity for expansion.
  • To set up New Joint Ventures: The company is engaged in several successful associations with renowned businesses, such as Colgate-Palmolive and Coca-Cola Company.

Threats

  • Food contamination: Even though, it is the responsibility of Nestle to continuously run quality checks, Nestle had allegedly offering contaminated food in the market. These initiatives hurt the reputation of Nestle and resulted in business losses.
  • Private Label Growth: The increasing number of retailers and supermarkets are launching their own brands that are cheaper and offer significant competition to products of Nestle.
  • Increasing prices of Raw Food: With an overall increase in world population and economy, the raw food demand will increase. As a result, there is a decrease in Nestle margins and higher material costs.
  • Healthy Eating habits and Trends: Chocolate drinks and chocolate products are major products of Nestle, which contain a high level of calories and because of a change in eating habits of customers, Nestle will face a decrease in demand.

Conclusion

Nestle is a famous and recognized brand, along with a diverse portfolio. Yet, need to focus on changing market and customer needs and habits in order to remain competitive.