SWOT Analysis:

Nestle SWOT Analysis

Strength Weakness
 Product diversity  Less ability to provide good foods
consistently
 Distribution channels
 Criticism over high water usage,
 Brand value and Reputation
selling contaminated food, anti-
 Acquiring and merger unionism, forced child labor and
 Unmatched research and using other unethical practices
development capability  Contaminated food recalls
 Strong geographic presence, with
one of the best geographically
diversified revenue sources
 Unrivaled product and brand
portfolio
 Ownership of some of the most
recognizable brands in the world

Opportunity
 Building partnership
 Broad Sale Channel
 Demand for healthier food product
 Clear and accurate labelling
indicating of any harmful products
 Transparency in material sourcing
 Growing number of small Silicon
Valley based food startups
 Growing ready-to-drink (RTD) tea
and RTD coffee markets
Threats
 Trend toward healthy eating
 Changing trend
 Raising Prices of Raw materials
 Poor quality water and its scarcity,
Contamination
 Increased competition in the
beverage and food industries
 The price of coffee beans could
significantly rise due to major
weather disasters
 Strength – In the first part of SWOT analysis of nestle, Strength of Nestle is
discussed.
1. Product diversity: The company had 29 operating brands under which 8000
products were being sold in the market. This show the very diversity in the
product line which yield a great strength for nestle.

2. Distribution channels: Nestle is successfully operating in more than 100

countries which gives a real strength to its distribution channel. Including direct
and indirect channels, it has operations in 197 countries. (Nestle Web, retrieved:
September 2015)

3. Nestle’s R&D: Nestle has a strongest research and product designing teams
with great capabilities. They introduce new products through the year, which
strengthen Nestle’s competitive advantage.

4. Brand value and Reputation: In 2013, Nestle became one of the top ten
reputable companies in the world in the annual ‘Global RepTrakTM 100’ study. A
report published by Forbes, Nestle numbered 43th position in the World’s Most
Valuable Brands.

5. Acquiring and merger: Over the past years, nestle has been defeating its
competitors successfully. By becoming successful mergers and acquiring other
companies it’s becoming more powerful in the market.

Weakness – In second part of SWOT analysis of nestle, weakness is

discussed.
1. Less ability to provide good foods consistently: As consumers always look for
good tasting and healthy foods, a company should consistently provide healthy
foods. Nestle is often blamed for many products due to poor supplies. It is hurting
the image of Nestle which is a great weakness.

2. Incident in India: Incident like Maggi where government sued Nestle for
$100m over one of their popular product Maggi noodles, for unfair trade
practices. This will bring a negative effect on sells for the long run.

3. Criticism: Nestle has been criticized many times over different issues
including child labor, horse meat scandal, which make it less trust worthy.

4. Criticism over high water usage, selling contaminated food, anti-unionism, forced
child labor and using other unethical practices
Opportunities – In the third part of SWOT analysis of nestle, opportunities
for Nestle is discussed.
1. Demand for healthier food products: Great intensity of buying and consuming
quality foods is increasing among people. Nestle frequently tries to provide
quality foods to its consumers.

2. Strong R&D: As it has strong R&D teams, it has great advantages of

introducing new product in the future.

3. Broad Sale Channel: Nestle has been broaden its selling channel in
developing countries in Africa.

4. Building Partnership: it has been building partnership with other major

companies such as Coca- Cola.

Threat – In the fourth & final part of SWOT analysis of nestle, threats is
discussed.
1. Trend toward healthy eating: As people’s concentration is increasing toward
healthy foods, Nestle will have to make sure healthy foods at any cost.

2. Changing trend: Chocolate and chocolate related products are the major
products of Nestle. But some recent research showed that peoples becoming
more health conscious toward their health which may be the main reason of
decline sales of chocolate in future.

3. Raising Prices of Raw materials: With the growth of the economy of the world,
the price of raw materials is increasing which may harm its competitive price in
future.

4. Contamination: Though the main responsibility of Nestle is to run thorough

quality checks of its products, the company had been thoroughly providing
contaminated foods. Such actions may hurt company’s reputation greatly in
future if being practiced more.

SWOT analysis of nestle showed that Nestle has great strength and opportunities as
well as weakness and threats.