PORTERS FIVE FORCES FOR NESTLE

Submitted By: Nimisha Walecha (E13) Sonam Mahajan (E21) Raqueem Khan (E62)

About Nestl
Founded in 1866 by Henri Nestl. Henri Nestl developed a milk based baby food and soon began marketing it. It became the first product of Nestl. 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.

USP
1. Chocolate fingers 2. Well-known strapline - Have a Break, Have a Kit Kat.

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

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.

NESCAFE
The product NESCAF a combination of the Nes-root of Nestl

and the word caf.

NESCAF 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 NESCAF 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

RESEARCH METHODOLOGY
RETAIL AUDIT

RETAILERS SURVEY

CONSUMER SURVEY

ANALYSIS AND FINDINGS

Closest competitors
Baby food Chocolate

Home made food 25%

Cerelac 41%

5-star 31%

Kit Kat 33%

Oats 19% Heinz food 15%

Perk 24%

Bar One 12%

Noodles

Coffee

Coffee Beans

Top Ramens 27%

12%

Maggi 45%
Cappucino 24%

Nescafe 44%

Wai Wai 7% Sunfeast Pasta 21%

Bru 20%

Reasons for purchasing

Cerelac Kit Kat
Do not buy 9% Other 15%

Do not buy 30%

Taste 15%

Taste 22%

Easily available 9%

Other 46%

Easily available 54%

Maggi

Nescafe

Do not buy 0% Easily available 10%

Other 14%

Other 4% Easily available 22%

Do not buy 0%

Taste 76%

Taste 74%

Is price a constraint for buying the chosen products

Cerelac
Strongly disagree 6% Strongly agree 23%

Kit Kat

Strongly disagree Strongly 10% agree 14% Disagree 20%

Disagree 45%

Agree 9% Neither agree nor disagree 17%

Agree 24%

Neither agree nor disagree 32%

Maggi

Nescafe Coffee

StronglyStrongly disagree agree 8% 10% Agree 15%

Strongly disagree 0% Strongly agree Disagree 15% 17%

Disagree 44%

Neither agree nor disagree 23%

Neither agree nor disagree 23%

Agree 45%

PORTERS FIVE FORCES MODEL

Study Of Nestle Products With Respect To Porters Five Forces

Kit-Kat
New entrants in the marketSnickers

Supplier power:Limited option for the suppliers

Competitive rivalry :Cadbury

Buyer power:- Lots of options, Price being a constraint

Substitutes:Perk,5star,Foreign chocolates

COLD WAR

Nestle Kit kat Vs Cadbury Perk

Nescafe
Threat of new entrantsNo potential threat

Supplier powerCompany has lots of options

Competitive rivalry Bru

Buyer PowerPrice a constraint, lack of choices

Substitutes

Bru,SouthIn dian filter coffee

Maggi
New entrants no potential threat for maggi

Supplier power is less

Top rivalry Top ramen

Enjoys considerable market share

Substitute
Chowmein, fast food

Cerelac
New Entrants: No potential entrants

Limited power to suppliers

Enjoys virtual monopoly

Buyer power Holds a huge chunk of market

Substitute Home made food, Heinz baby food

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