MKT600 Marketing Assessment 1: Nestle Situation Analysis Report

This report provides a comprehensive marketing analysis of Nestle, examining its background, major competitors (Cadbury, Hershey, and Unilever), and microenvironment, including relevant publics and key suppliers. The report delves into a SWOT analysis, highlighting Nestle's strengths (commitment to corporate social responsibility, diversified portfolio, global reach, strong R&D) and weaknesses (inconsistent product quality, product recalls, and criticisms of eco-friendly programs). It identifies opportunities like innovative distribution channels and threats such as increased competition, poor water quality, and changing government regulations. Furthermore, the report includes a PESTLE analysis of Nestle Australia, considering political, economic, social, technological, legal, and environmental factors. The conclusion emphasizes Nestle's leading global position, diversified product line, and its ability to adapt to changing customer demands and technological advancements, aiming to maintain its market share and profitability. The report draws on various sources, including academic journals and online resources, to support its findings.

Running Head: NESTLE 0
Marketing

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Contents
Introduction / Background of Nestle.....................................................................................................3
Major competitors of Nestle.................................................................................................................3
Microenvironment of Nestle.................................................................................................................3
Relevant publics....................................................................................................................................3
Key suppliers of Nestle..........................................................................................................................4
Swot Analysis of Nestle..........................................................................................................................5
Pestle analysis of Nestle Australia.........................................................................................................6
Conclusion.............................................................................................................................................8
References.............................................................................................................................................9
Lucio, R. (2019). Nestlé expects sales to rise in 2019 following revived growth. Retrieved from:.........9

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Introduction / Background of Nestle
Nestle was started in the year 1905 through the merger of “Anglo Swiss Milk
Company” that was established in 1866 by the brothers named George, Charles Page, and
Farine Lactee Henri Nestle. In Australia, Nestle is the public Company. Besides this, it also
ranked on the number 196 from the top 2000 Companies of Australia. Nestle tries to get the
extreme revenue from its food product manufacturing in the industry of Australia. In the year
2018, Nestle has 4415 employees across Australia (Skeja & Keskin, 2018). In addition to
this, the total revenue of the company amounted to $2,270,062,000. Ms Sandra Martine is the
Chief Executive of Nestle in Australia. Besides this, Ms Elizabeth Proust is the Chairman of
Nestle Australia.
In Australia, Nestle markets as well as manufacturers the wide range of beverage and
food products that includes coffees, processed milk, infant foods, chocolate, culinary
products, nutritional snacks, confectionary, accessories, and pet foods. Nestle brands includes
the Nesquik, Maggi, Nespresso, Kit Kat, Milo, Nestle Professional, Quick-Eze, Sustagen,
Nestle Helath Sceince, BioGaia, Plaistowe. In the recent time, Nestle is growing well in
several parts of the country due to its high quality product and better customer service.
Major competitors of Nestle
Nestle has to face the tough competition from the three brands names Cadbury,
Hershey, and Unilever. The also, Nestle has the competitive advantage over these brands. It
has significant scale as well as scope in manufacturing, marketing, as well as administration
of its products. The offerings of Hershey’s include sugar, chocolate confectionary product,
snack items, beverages and toppings. The target customers of Hershey’s are wholesale
distributors, mass merchandisers, wholesale clubs, drug stores, grocery stores, vending
companies, departmental stores, dollar stores as well as convenience stores. As compare to
this, Cadbury targets the kids between the age group of 5 o 10 years. It believes that this age
group mostly prefers the chocolates other than any confectionary. It has also shifted its target
market to the family members who celebrate the festivals with the chocolate products (Miah
et al, 2015).
Microenvironment of Nestle

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Relevant publics
In the customer category of Nestle, it includes the grocery and retail stores that tend to
provide the company’s product to the final customers. Nestle also has the positive brand
image in the mind of end customers. In addition to this, employees are also proved be the
significant element in the Nestle microenvironment. For growing its business, Nestle
motivates its employees in the most effective manner. It has included several training
programs for the effective utilisation of its employee’s skills.
Key suppliers of Nestle
Suppliers provide the unfinished goods, raw materials, and labours for the company in
producing the goods and services. It is true that the effectiveness of suppliers tends to
determine the effectiveness and efficiency of the company. The suppliers of Nestle are
divided into the two parts that is material suppliers and labour suppliers. Firstly, labour
suppliers deal with the labour quantity that is being required in order to prevent the labour
force loss. Besides this, it also tries to prevent the company from labour shortage.
Nestle is in the food and quality markets. Material supplies tend to handle the entire
material that is required by the organisation for manufacturing the finished products required
for sale. Therefore, it is true that the quality of such item plays an essential role in the success
of its product.
Nestle has also ensured or maintained effectiveness and efficiency in the quality and quantity
of the two different supplies named as labour supplies and material supplies. In this way,
company has been capable of running its business smoothly for more than around 100 years
in spite of the changing business trends in the market of food product industry
Market Intermediaries: It helps the Nestle in selling, advertising, as well as
distributing the product to final consumers. Besides this, the physical distribution network of
Nestle tends to decide the medium through which final good is being delivered to the final
consumers. This department of Nestle also tends to ensure the effective storage of the firm
that helps in preventing the product from facing any kind of damages. Besides this, the
marketing service department of Nestle also assist it in promoting the product. Besides this, it
also serves as the channel of communication between the customers as well as the company
(Ford, 2018).Therefore; it not only connects the characteristics of the product but also helps

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in getting the feedback using survey. It further helps the department of research and
development for ensuring the development of product as per the needs of the customers. In
this way, Nestle has the several benefits of working in the smooth coordination with every
market intermediaries that further helps in providing the pure and effective food products to
its customers across several parts of the World.
Swot Analysis of Nestle
Strengths:
 It has strong commitment to the corporate social duty by undertaking several
corporate social responsibilities. Nestle has also taken the initiative that helps it in
reducing the wastage, packaging material usage. It also helps in keeping the
environment clean. Nestle has also reached to the zero waste production.
 It has combined the strong three elements that are quality, sustainability, and
satisfaction of client (Lê, Robin & Roger, 2016).
 It has varied and diversified trade portfolio.
 It operates in around 189 countries that ensures its wider reach across the entrie
world. Besides this, it has strong teamwork having the good degree of employee
committed ness and occupation satisfaction.
 It has the ability of generating sales by serving its varied products in the local market.
The research team of Nestle also presents the world innovative World.
 Nestle has one of the competitive advantage in the capabilities of research and
development. Nestle also has the most effective networks of research and
development for any beverage or food company.
Weaknesses
 It is not able to provide the constant quality in its food products. Besides this, it is also
repeating several products from the trade due to its poor quality of supplies and food
contamination.
 It is also effectively able to control the quality of its products. Besides ensuring the
stringent control measures of its quality, Nestle also has to recall its products in the
several markets.

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 It has also started many programs in order to make the company eco friendly. This
program of Nestle has received several criticisms (Gong, Jia, Brown & Koh, 2018).
Opportunities
 It can ensure the innovative development of every distribution channels.
 It can also develop the intangible capability in order to help the competitive
advantage.
 Accurate and clear labelling that indicates the harmful products.
 It can bring transparency in its sourcing of material. It is because, customers are
becoming more conscious regarding from where the food is coming. In the recent
time, the youth are putting more emphasis as the essential factor at the time of buying
food.
 Growing coffee markets and ready to drink tea.
Threats
 Increase in the level of competition in the food and beverage industries.
 Poor quality of water as well as its scarcity (Vidler, Stoneham, Edmunds & Sartori,
2018).
 It might also possible that the threat of coffee beans arises due to the weather disaster.
 The changing laws of the government can put the serious effect on growth of Nestle
Pestle analysis of Nestle Australia
Political Factors: It is true that nestle has its operations in several countries including
Australia. in every country, it has to abide by the different rules and regulations. Despite of
the several loops, Australia political condition helps the businesses in their growth. It is also
true that government implements several policies for several business units. Therefore, the
changing policies of the government can affect the business of Nestle.
Economic factors: in the economic issue, foreign exchange is the top most issue for Nestle. In
the last few years, Nestle has received the huge amount of profit. in the year 2018 also, Nestle
has received the profit by more than 40 per cent. As per the figures of company, its profit has
reached to $ 10 billion to the $7.6 billion. In Australia, the inflation rate in the year 2018 was
2.2%. However, in the year 2019, it is expected to grow by 2.3%. In this way, economic

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factors play an essential role in the business context. It is also true that big companies such as
Nestle can perform well only when the economic scenario is stable globally.
Social factor: the social environment including the buying behaviour, attitude as well as
changing demographic affects the business. In Australia, people are also ensuring more
demand for the low calorie foods as well as less sugar. As per the customers demand, it has
also made the changes in its production by making the products having less sugar. Due to the
producer of finished goods, Nestle success also depends on the ranges of product that it is
serving. Nestle Australia is also proved to be the World’s biggest food manufacturer.
Therefore, Nestle is a company with great purpose and strong vision. In addition to this,
nestle has also reported that it is going to launch the KitKat Gold and Nescafe God in the
Australia. due to this, its market share is also expected to grow (Lucio, 2019).
Technological factor: it is true that competition has increased to a greater phase that requires
the firm to adopt innovative technology. Due to this, Nestle has also undertaken several
technological changes. Firstly, it has devised the technological change that will tend to reduce
the sugar in some of the products without putting any effect on the taste. In spite of this,
Nestle proves as the most effective industry to make the remarkable growth in terms of
technology and innovation (Meissner, Polt & Vonortas, 2017).
Legal factors: Nestle as the biggest drink and food company has report on the proposed
legislation that requires the big business to report on the efforts in combating the modern
slavery. In this Modern Slavery Bill 2018, it has stated that companies that are operating in
Australia with the yearly turnover of the $100 Million are required to report on the risks
related to modern slavery. Nestle being the owner of more than 2000 brands in almost 189
countries has stated the Australian government that it could add the time as well as cost to the
suppliers and businesses (Baker, 2018).
Environmental factors: Nestle has undertaken several measures in order to protect the
environment. Firstly, it strives for enhancing the quality of life for consumers. It tries its best
to reduce the environmental impact of its packaging. At the same time, it also ensures that its
packaging protects the product properly. Besides this, Nestle also promotes the recycling and
recovery by using the recycled materials. At the time of considering the packaging impact on
the environment, it tries to look at the various indicators such as water usage, carbon footprint
as well as non-renewable energy use (Nestle, 2019).

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Conclusion
In the limelight of above discussion, it can be concluded that Nestle is one of the
leading organisation across the globe. It has diversified products in its product line. The
major strength of the company is its leading company across the globe. In addition to this, the
changing customer demand and competition proved to be the threat for Nestle. In order to
overcome from such challenges, it is effectively using innovative technology. In this regard,
it has also done started using such technology that will help it in using less sugar and low
calorie without compromising with the quality. Due to this, it is also earning huge amount of
profit.

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References
Lucio, R. (2019). Nestlé expects sales to rise in 2019 following revived growth. Retrieved from:
https://insidefmcg.com.au/2019/02/15/nestle-expects-sales-to-rise-in-2019-following-revived-
growth-in-us-and-china/
Baker, N. (2018). Nestle says slavery reporting requirements could cost customers. Retrieved
from: https://www.smh.com.au/politics/federal/nestle-says-slavery-reporting-
requirements-could-cost-customers-20180816-p4zy5l.html
Nestle. (2019). Environmental Sustainability. https://www.nestle.com/randd/environmental-
sustainability
Vidler, A. C., Stoneham, M., Edmunds, M., & Sartori, A. (2018). The illusion of choice: an
exploratory study looking at the top 10 food companies in Australia and their brand
connections. Australian and New Zealand journal of public health, 42(6), 519-522.
Ford, J. (2018). Defining'Supply Chain'for Reporting Under a Modern Slavery Act for
Australia. United Kingdom: Australia.
Lê, K. A., Robin, F., & Roger, O. (2016). Sugar replacers: from technological challenges to
consequences on health. Current opinion in clinical nutrition and metabolic
care, 19(4), 310-315.
Miah, J. H., Griffiths, A., McNeill, R., Poonaji, I., Martin, R., Morse, S., ... & Sadhukhan, J.
(2015). Creating an environmentally sustainable food factory: A case study of the
Lighthouse project at Nestlé. Procedia Cirp, 26, 229-234.
Meissner, D., Polt, W., & Vonortas, N. S. (2017). Towards a broad understanding of
innovation and its importance for innovation policy. The Journal of Technology
Transfer, 42(5), 1184-1211.
Espinoza-Orias, N., Cooper, K., & Lariani, S. (2018). Integrated product development at
Nestlé. In Designing Sustainable Technologies, Products and Policies (pp. 447-456).
Springer, Cham.

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Lee, K. H., & Vachon, S. (2016). Integrated Supply Network and Business Sustainability.
In Business Value and Sustainability (pp. 59-93). Palgrave Macmillan, London.
Skeja, A., & Keskin, G. (2018). Corporate Sustainability Indexes: FTSE 4 Good Index
Report on Nestle. Prizren Social Science Journal, 1(1), 30-46.
Gong, Y., Jia, F., Brown, S., & Koh, L. (2018). Supply chain learning of sustainability in
multi-tier supply chains: A resource orchestration perspective. International Journal
of Operations & Production Management, 38(4), 1061-1090.
https://insidefmcg.com.au/2019/02/15/nestle-expects-sales-to-rise-in-2019-following-
revived-growth-in-us-and-china/