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.

USP1.Chocolate fingers2.Well-known strapline - Have a Break, Have a Kit Kat.

MAGGI

• 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.

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

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

ANALYSIS AND FINDINGS

Closest competitors

Homemade food

25% Cerelac41%

Oats19%

Heinz food15%

Baby food

5-star31%

Kit Kat33%

Bar One12%

Perk24%

Chocolate

Wai Wai7% Sunfeast

Pasta21%

Maggi45%

Top Ramens

27%

Noodles

Bru20%

Nescafe44%Cappucino

24%

Coffee Beans12%

Coffee

Reasons for purchasing

Cerelac

Taste15%

Easily available

9%

Do not buy30%

Other46%

Other15%

Do notbuy9%

Taste22%

Easily available

54%

Kit Kat

Maggi

Taste76%

Other14%

Easily available

10%

Do not buy0%

Nescafe

Easily available

22%

Taste74%

Other4%

Do not buy0%

Is price a constraint for buying the chosen products

Disagree45%

Strongly agree23%

Agree9%

Neither agree nor disagree

17%

Stronglydisagree

6%

Cerelac Kit Kat

Stronglyagree14%

Stronglydisagree

10%

Agree24%

Neither agree nor disagree

32%

Disagree20%

Maggi

Disagree44%

Neither agree nor disagree

23%

Agree15%

Strongly agree

8%

Stronglydisagree

10%

Nescafe Coffee

Strongly disagree

0%Strongly

agree15%

Agree45%

Neither agree nor disagree

23%

Disagree17%

PORTER’S FIVE FORCES MODEL

Study Of Nestle Products With Respect To

“Porter’s Five Forces”

Kit-Kat

COLD COLD WAR

Nestle Kit katNestle Kit kat VsVs Cadbury Perk… Cadbury Perk…

Nescafe

Maggi

Cerelac

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