Porter Five Force Analysis for Nestle

Strategic management

Nestle
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Porter five force analysis
Introduction
One of the best competitive strategies is Porter five forces model are considered as one of the
important competitive analysis as it can help in evaluating the overall factors related to the
competition level. It can be stated that through this strategic analysis the company can easily
evaluate the market conditions.
Threat of new entrants- Low
By considering the overall activities of the company, it can be stated that threat of new
entrants is low. It is not possible for all the companies to invest the huge amount in the
operations. Like small scale companies are not able to invest in the activities of comparison is
made with a Nestle company. The company also gives tough competition to the new entrants as
the focus is given on maintaining the quality of the products (Nestle, 2013).
Competitive rivalry- High
The competition level is high in this sector. There are many competitors present in the market
like Kraft food and P&G. In breakfast segment the competitors are Kellogg’s. To maintain the
overall competition level the company also spends the large amount on marketing as it helps in
enhancing the overall market share in the competitive market (Laforet, 2015).
Bargaining power of suppliers – Low
It can be stated that bargaining power of the suppliers is low as the company holds the large
market share. Therefore, the requirement is more of the suppliers so that large quantities of the
products can be maintained. It can be analyzed that if the suppliers focus on the starting the
process of supplying then they will never bargain in relation to the prices. The company also
emphasizes on the suppliers as it can help in maintaining the relations for long time. Nestle also
focuses on maintaining proper relations with the suppliers as it can help in maintaining the good
quality of the products (Noton & Elberg, 2017).
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