Nestle Switzerland - International Business

Contents

Executive Summary        2

1.0 Background of Nestle        3

2.0 Latest Progress of Nestle        4

3.0 Current Issues and Challenges        5

3.1 Weaknesses        5

3.1.1 Health related issues        5

3.1.2 Dependent on certain brand        5

3.1.3 High cost        5

3.1.4 Bad reputation        5

3.2 Opportunities        6

3.2.1 Distribution channel        6

3.2.2 Market expansion        6

3.2.3 Demand for Healthier Products        6

3.2.4 Acquiring New Startups        6

3.3 Threats        7

3.3.1 Strong Competitors        7

3.3.2 Sectoral Woes        7

3.3.3 Changing Trend        7

3.3.4 Contaminated Products        7

4.0 Recommendation        8

4.1 Health issue        8

4.2 Dependent on certain brand        8

4.3 High Cost        8

4.4 Bad reputation        8

5.0 Conclusion        9

References        10

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Executive Summary

        This report of company analysis includes detailed information about Nestle Switzerland. Nestle is the biggest food and beverage company in the world and with its innovation, it launches Nestle Cheerious- Oat Crisp with Beta Glucan and introduces Southeast Asia’s First KIT KAT Concept Store in Malaysia. Besides, Nestle Health Science has invested USD 145 million in Aimmune Therapeutics in Brisbane. The role of Nestle in Switzerland to manufacture, distribute, and selling through export and imports has creates its competitive advantages and opportunities through consumers demand on healthier products, acquiring new startups, distribution channel and market expansion. However, Nestle has its weaknesses in involving in health related issues, dependent on certain brands, high cost production and bad reputation. Due to its competitive environment, Nestle is threatened by the existence of strong competitors, sectoral woes, changing of trend and contaminated products. Therefore, we have provided five recommendations to solve its weaknesses to be more understanding in the market. Out of five recommendations, we strongly believe doing research and development on existing products can help in making Nestle to be more independent and enhancing their sales.

1.0 Background of Nestle

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Nestlé was founded in 1866 by Henri Nestlé in Switzerland. Today, Nestlé is the biggest food and beverage company in the world. It is headquartered in Vevey, Switzerland and earning revenue of 100.2 billion U.S Dollars in 2014. Henri Nestlé used his surname- ‘Nestlé’ in his company name and logo, ‘Nestlé’ means ‘little nest’ which symbolizes security, family and nourishment (Nestle.com, 2016).  

        Besides, Nestlé has created employment opportunities to approximately 335,000 people worldwide in 2015 (Satista, 2015). Nestlé’s product portfolio covers majority of food and beverage category, it is created to give consumers a tastier and healthier products to enjoy at every eating occasion and throughout life’s stages including times of special nutritional need (Nestle.com, 2016).

         Nestlé is ranged from beverages such as coffee (Nestlé Waters), baby and healthy food (Nestlé Nutrition) and, sweets and snacks (Nestlé confectionery sector). The most popular brands developed by Nestlé are Milo, Nescafé, Maggi, KitKat, Nespresso, Toll House, and Coffee-mate. With success innovations of Nestlé, it has also excelled in manufacturing, distributing and selling chocolates, cereals, frozen products, yoghurts, and soups.

        In Malaysia, Nestlé began its business as the Anglo- Swiss Condensed Milk company in Penang in 1912 and expand to Kuala Lumpur in 1939 (Nestlé Malaysia, 2015). Furthermore, Nestlé has set its strategy to grow its business by balancing promotional activities and product lines, and innovate and renovate its existing products.  Nestlé Malaysia has actively doing promotional activities such as “Lebih Kebaikan, Lebih Nilai” and “Milo- Breakfast Day”, all these activities were to bring values to their existing customers and build customers loyalty.  

2.0 Latest Progress of Nestle

According to Health Facts (2014) by the Ministry of Health Malaysia, heart disease remains as the number one killer in the country.  One of the main factors of heart disease is high cholesterol. The National Health and Morbidity Survey (2015) have found that 1 in 2 Malaysian adults had high cholesterol levels. However, Malaysian still not concern about their healthy and continue consumer with oily and high cholesterol foods. In order to avoid getting high cholesterol, Nestlé Malaysia has launched its new product, Nestlé Cheerios® Oat Crisp with Beta Glucan which can help the people to reduce cholesterol. This is the ready-to- eat breakfast cereal made from Australian oats with beta glucan. Having oats crisp as the breakfast provides Malaysian a healthy and convenient way to keep their heart healthy. (Nestle.com, 2016)

Other than that, Nestlé has introduced Southeast Asia’s First KIT KAT Concept Store, KIT KAT Chocolatory in Malaysia. KIT KAT Chocolatory is a concept store where provides a platforms for the customers to create their own KITKAT. The customers are allows to choose up to three ingredients and start design and manufactures their own KITKAT in different flavor. They also can name their own KIT KAT. KIT KAT Chocolatory aims to make consumers’ break more special by driving a better level of personalization, customization and provides opportunity for the customers to involved in manufacture their own KITKAT. (Nestle, 2016)

Moreover, for the global site, Nestlé Health Science decided to make an investment in Aimmune Therapeutics, based in Brisbane (California, USA) by spending USD 145 million. This collaboration will boost the development of therapies for the people which have food allergies and include peanut allergy sufferers. Food allergies bring huge personal impacts and economic burden to the patients. This has affected between 5-8% of children and 1-2 % of adults. This investment is part of Nestlé Health Science’ commitment to innovation in the management of food allergies and provide solutions for the food allergies’ patients. (Nestle.com, 2016)