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 CONSUMER
SURVEY SURVEY
ANALYSIS AND
FINDINGS
 Closest competitors
Baby food Chocolate

Home
made food 5-star Kit Kat
25% Cerelac 31% 33%
41%

Oats
19%
Perk Bar One
Heinz food
24% 12%
15%
Noodles Coffee

Coffee Beans
Top 12%
Ramens
27% Maggi
45% Nescafe
Cappucino 44%
Wai Wai 24%
7% Sunfeast
Pasta
21% Bru
20%
 Reasons for purchasing

Cerelac Kit Kat

Do not
buy Taste
Taste 9% 22%
15% Other
Do not buy
Easily 15%
30%
available
9%

Easily
Other available
46% 54%
Maggi Nescafe

Do not buy
Do not buy Other 0%
0% Other 4%
14%
Easily
Easily
available
available 22%
10%

Taste Taste
76% 74%
 Is price a constraint for buying
the chosen products

Cerelac Kit Kat

Strongly
Strongly
disagree
disagree Strongly
6%
10% agree
Strongly agree
14%
23%
Disagree
20% Agree
Disagree Agree
24%
45% 9%

Neither agree
Neither agree
nor disagree
nor disagree
17%
32%
Maggi Nescafe
Coffee

Strongly
disagree
StronglyStrongly
0%
disagree agree Strongly
10% 8% agree
Disagree
Agree 15%
17%
15%

Neither agree
nor disagree
Disagree Neither agree 23% Agree
44% nor disagree 45%
23%
PORTERS FIVE FORCES
MODEL
 Study Of Nestle
Products With Respect
To
Porters Five Forces
 Kit-Kat
New entrants
in the
market-
Snickers

Supplier Buyer
power:- Competitive power:- Lots
Limited rivalry :- of options,
option for the Cadbury Price being a
suppliers constraint

Substitutes:-
Perk,5-
star,Foreign
chocolates
COLD WAR

Nestle Kit kat Vs Cadbury Perk

 Nescafe
Threat of
new
entrants-
No
potential
threat

Buyer
Supplier Power-
power- Competitive Price a
Company rivalry
constraint,
has lots of Bru lack of
options choices

Substitutes
Bru,SouthIn
dian filter
coffee
 Maggi
New
entrants
no potential
threat for
maggi

Supplier Enjoys
Top rivalry considerable
power is Top ramen market
less share

Substitute
Chowmein,
fast food
 Cerelac
New
Entrants:
No
potential
entrants

Buyer
power
Limited Enjoys Holds a
power to virtual huge
suppliers monopoly 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