swot analysis of nescafe?

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5 Answers

  • Anonymous
    1 decade ago
    Favorite Answer


    SWOT Analysis


    Broad geographic coverage – Nestlé is the leading player in hot drinks in every regional market, except North America (in which it ranked sixth in 2007), insulating it against downturns in particular markets.

    Global leader in instant coffee – the company has a clear global lead in the important coffee sector, which is growing significantly in emerging markets, accounting for 21% of global value in 2007.

    World number one in other hot drinks – Nestlé's portfolio of chocolate and malt milk products have established it as the leading player in global other hot drinks, in which it held a 23% share in 2007.

    Strong brand portfolio – the company's hot drinks portfolio includes a number of high-recognition brands supported by considerable marketing and research and development resources, including Nescafé, Nesquik and Milo.

    High levels of research and development expenditure – Nestlé's high levels of investment in research and development offer significant opportunities to develop its operations beyond the Nestlé Nutrition division, including hot drinks.

    Solid financial base – Nestlé has a number of cost-savings programmes (notably GLOBE) in place and as a result, has been able to place itself in a position where it is able to afford sizeable investment in brand development.

    Capacity to pass on costs – Nestlé's size and marketing power enable it to pass on a significant proportion of the rising costs resulting from increasing coffee and cocoa prices to retailers and consumers. Moreover, the economies of scale and synergies available to the company increase its capacity to make internal cost savings to offset the remainder of the increases.


    Reliance on mass market – the mass-market positioning of Nestlé's core hot drinks brand, Nescafé, presents significant difficulties in terms of tapping into the growing demand for premium coffee products.

    Limited presence in tea – Nestlé has developed only a minimal presence in tea, a sector which is benefiting notably from the rise in consumer health-consciousness and would therefore seem to fit with the company's efforts to reposition itself as a health-orientated manufacturer.

    Increasing bias towards low-margin products – the relatively strong growth registered by emerging markets, where the company is largely represented by lower margin brands, is negatively impacting Nestlé's beverages' operating margin. Meanwhile, higher margin Western European markets are being hit by challenging trading conditions.

    Bias towards caffeine-based products – Nestlé's hot drinks portfolio is biased towards products containing caffeine, a substance which has gained a negative image amongst many health-conscious consumers.

    Negative ethical image – Nestlé has received considerable negative publicity for its infant formula operations in emerging markets, which may hamper its efforts to target the trend towards ethical consumerism in markets such as the UK.


    Strong growth forecast in Asia-Pacific – Euromonitor International forecasts that Asia-Pacific will be the fastest growing market for hot drinks over the 2007-2012 period. As Nestlé's largest regional market, Asia-Pacific therefore presents significant opportunities for the company in spite of poor conditions in major Western European markets.

    The premium trend – while the mass-market positioning of Nescafé is an obstacle, the growing demand for premium coffee products is creating opportunities for the company to generate growth in mature markets through the development of brands and extensions, such as Nespresso and Nescafé Dolce Gusto.

    The health trend – while coffee has not received the positive health-related publicity of tea, its image became less resolutely unhealthy in recent years, with suggestions that it can help to prevent various conditions, including Parkinson's disease. Moreover, the company's repositioning and substantial research and development infrastructure place it in a strong position to develop health-orientated new products.

    Ethical consumerism – fairtrade products are growing strongly in hot drinks markets such as the UK, offering a potentially important way to counter maturity in developed regions.

    Cross-branding – Nestlé's diversified packaged food and beverage portfolio offers it the opportunity to develop brands from other categories in hot drinks. Notably, it could further develop its confectionery brands in other hot drinks along the lines of existing products such as Aero Hot Chocolate.


    Sluggish prospects in developed markets – market maturity and aggressive competition amongst retailers are set to constrain hot drinks growth severely in major developed markets during the forecast period.

    Coffee machine competition – Nestlé's efforts to attract younger consumers and tap into the growing demand for premium coffee in developed markets with the introduction of the Nespresso and Nescafé Dolce Gusto coffee systems could come under threat from the development of rival cheaper models.

    Rising costs – increasing transport and raw material costs, mainly relating to rising bean, oil and packaging prices, are placing significant pressure on margins in the company's beverage operations.

    Competition from beyond hot drinks – the expansion and diversification of soft drinks, which are effectively targeting trends towards health and convenience, pose a notable threat to Nestlé's hot drinks products.

    Source(s): www.euromonitor.com
  • 6 years ago

    Don't use Nescafe they're owned by Nestle who exploit third world children. This is factual and well documented by institutions across the globe.

    Tip of the iceberg of Nestle:


    Youtube thumbnail



    I can assure you there many affordable coffee's out there that that taste a whole lot better than anything Nescafe produce. Look out for brands made with "Arabica" beans and enjoy guilt free, superior quality coffee that makes you smile!

    Thank you for reading/watching. If you found this useful pass the information on to a friend.

  • Anonymous
    4 years ago

    Nestle Swot Analysis

  • 1 decade ago

    Nestle India Limited is the Indian arm of Nestle SA, which holds a 51% stake in the company. It is one of the leading branded processed food companies in the country with a large market share in products like instant coffee, weaning foods, instant foods, milk products, etc. It also has a significant share in the chocolates and other semi-processed foods market.

    Nestlé's leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Milkmaid. To strengthen its presence, it has been the company's endeavor to launch new products at a brisk pace and has been quite successful in its launches.

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  • 4 years ago

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