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ritical success factors of sonyKey success factors of SonyKSFs of SonySony critical success factorsSony key success factors
Key success factors are significant to future success of industry firms. These factors encompass competencies, market achievements, resources, competitive capabilities and product attributes etc. It is most important for the strategists to be familiar with the surroundings of sector in order to distinguish the most important competitive success factors. The KSFs of Nestle are given below:
3. Successful M&A:
Nestle has grown thru organic growth but really thru successful M&A Nestle has acquired to enter both emerging and developed markets, and new product categories Clear strategic focus: Food & Beverages, Nutrition, Health & Wellness, adjacencies to existing core businesses o Within these strategic focuses, 12 of their brands represent 70% of sales, most are #1 or #2 in Market Share (4 of these brands are billion dollar brands) Clear criteria for transactions: Enhancing key metrics, strong market positions, brands, capabilities, ease of integration (culture) Global scope but focus on bolt-ons: both emerging and developed markets M&A drives profitable growth thru competitive advantages, growth drivers, and operational pillars.
Q:-2 Where is Nestle vulnerable? what should it watch out for? A:NESTLES VULNERABILITIES
Nestle is an established company almost all around the world. Below are the few vulnerabilities:-
Hovering over the stats of 2008, the food industry grew 8.9% but Nestle lacked the potential to raise their sales in the organic food division that lay flat. Regulators like FDA and AMA (American Medical Association) are pressing on the firm for removing tags that hold no ground such as low cholesterol or heart healthy. Parents have also reported diabetic epidemic due to the consumption of such goods, in children especially. Promoting infant milk products comparing to breastfeeding. Slaves in African countries that are working under it. It holds up a negative effect regarding the whole brand. Retailers do not get to set high margins to indulge more in sales. Logistics cost is quite high. Many products are not understandable in different countries. It did not make much of an impact in France with their LC-1 (food commodity). Coordination between country specific plants with the Center, due to which some plants are running exceptionally smooth while operations in other countries lack effectiveness. Transportation as well as storage (proper warehousing) problems. Supply Chain having a complex stature (India plant transitional traceability). The immense diversification portfolio of the firm makes it impossible to run every division smoothly. Russia being an unstable market for Nestle which cuts a big chunk from Nestles bite. It is also perceived that Nestle puts profit first.
Competitors like Cadbury Schweppes, Hersheys, Quaker, Heinz, Del Monte, Kelloggs, and Kraft Foods are also well established. Its a tough market with a tougher competition for gaining market share. Market is quite mature and the competitors specialize in a certain product that can hit hard on Nestle. (Yogurt Market US: General Mills) In the Indian market, fresh food is preferred than ready-to-eat meals. In still developing countries as well as underdeveloped countries, Nestle will face a large competition in market both domestic and unorganized sectors. Poverty sector in developing countries is also a lacking that must be watched over for. Malnutrition and obesity are yet another burden faced by the developing countries.
Q:-3 What recommendations would you make to senior marketing executive going forward? What should the company be sure to do with its marketing ? A:Execs
Slogan Change
A recommendation for Nestles would be to keep the "good food, good life" for other sections of the company but change the slogan for confectionary. Something like "The Home of Chocolate" or anything else would be more beneficial to Nestles as Chocolate is an indulgence food which most people really don't worry if good for them.
Recommendations to Nestles
1. Recent advertising has proved that pushing new products is hard therefore Nestles should re-think there
strategy and promote there old reliable sellers. Perhaps instead of Nestles continue to develop already made brands such as Kit Kat Truffle they could promote the old brands but also come with new products altogether, not by-products. Nestles could return to old advertising campaigns such as Nestles Milky Bar commercials that although old led to large sales yet Nestles has stopped the Milky Bar commercial campaign in 2001 and Milky bar sales have declined 13.1%.
2. A good way for Nestles to infiltrate the European market would be by appealing to Soccer fans by
sponsoring a soccer side. Sponsorships can be quite extensive but by doing it makes the brand much more easily recognisable. Because confectionary is so often impulse buying (28.0%) often consumers will choose the brand they know which will be the brand they have seen the most. So by advertising more effectively like sponsorships. Overall for Nestle to stay competitive it must stay in touch with what Cadbury and other chocolate brands are doing. Nestles must compete with Cadburys re-introduced best selling blocks otherwise they are losing a large percentage of the market. It must also make its brand more recognisable by Sponsoring sport clubs so public awareness grows.
References
At a glance; Main brands. Retrieved http://www.nestle.com/All_About/Glance/Main_Brands/Main+brands.htm Nestle: 2005 Financial Statements. Retrieved http://www.nestle.com/NR/rdonlyres/963007F1-571C-4F05-88FEFE4F3D22F47E/0/FS_WEB_E_060224a.pdf Confectionary Market review 2003. Retrieved http://www.cadbury.co.uk/NR/rdonlyres/F29D2B3E-153F-4495-BA57594BD00BB217/0/ConfectioneryReview2003.pdf Nestles Lc1 SWOT Analysis. http://articles.castelarhost.com/nestle_swot_analysis.htm
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