Nestle Australia: International Markets

Nestle is a multinational company dealing in food, beverages and fast moving consumable goods. Nestle has been doing very good in International markets especially in Australia and England. One of the competitive advantages that Nestle gets is due to the information technology they use and the kind of positioning they are able to maintain in the minds of customers. In Australia Nestle positioning is of a company that provides healthy and nutritious value to its customer with the tag line of “good food, good life”. They are quite clear with the kind of message they want to pass to their customer, so in Australia the whole integrated marketing communication is inclined towards that (Singh, 2014). Nestle has become such a big brand by acquiring many other players of the market.

For years the company has been known for the management information system they use to streamline their processes and to introduce various new product in the market depending on the business intelligence (Richards, 2014). They have been taking the credentials from the customers and use those credentials for the better specific offering and designing of products for customer satisfaction.

But there was some issues faced by the company, because they were having so much data of both the suppliers and the customers that the data become messy and they were not able to extract the desired efficiency from it, and that’s where they tried to engineer their information technology.

Application of better and sophisticated information system for better managerial and marketing decision backed with the data was very substantial step in the growth of Nestle Australia (Sack, 2015). The market environment analysis for Nestle could be done with the application of Porter Five Forces model.

Porters Five Force Model

Bargaining Power of Customers-

Bargaining power of the customers in Australia is quite high because there are so many numbers of competitors in the market and the market has completely become a red ocean. To always satisfy the changing needs of the customers, company had to change their offering according to the customers taste and high level of business intelligence goes to detect that before the competition in order to sustain in the market (Lowrey,2016). Nestle integrated its name with health and wellness to target the niche segment. More over the management information system complemented them to carry that whole process in a very smooth way.

Bargaining Power of Suppliers

This is one of the critical factor in the success and the failure of the nestle in Australia as the company had a large number of suppliers around 555000 suppliers all over the world and same was the case in Australia, so managing the supplier and their product was a concern in the Australian market, but in recent time Nestle has been able to do that and maintain the product quality to carter the needs of their customer and provide them with better and nutritious food (Mialon, 2016).

Threat of New Entrant

From the perspective of threat of a new entrant, Nestle has faced many problems because in a country like Australia where barriers of entry are not that high, it is very important for the company to always come up with the new product strategy, integrated with the marketing communication because people always want something new and exciting (Leth, 2013). Nestle has come up with carious new and engaging products and campaigns like this in Australia, like Portion guidance, Nestle baby website and products, healthy kids initiative etc.

Threat of a Substitute

Threat from the product substitute has also made the market very competitive, because there are various product launched fortnightly which kind of prove to be the substitute for the product line of nestle, so till now the management has to very informed about the marketplace and then implement its managing decision according to that (Khamis, 2012). And its robust management information system till date has been able to performed up to the mark in that department by launching new and versatile product lines to constantly put Nestle in the front foot.

Competitive Rivalry

Due to the great competitive rivalry there is huge stress on creating the value fro the customers. Competitors like Uniliver, MARS, Mondelez provide a tough time and nestle has to always come up with a unique answer to all the question raised by the competitors in for of product differentiation or price competitiveness which puts a lot of pressure in the company. Nestle came up with product like milk bar, live saver, Milo purina etc to keep up with the ever changing competition (Rezaeegiglo, 2015). The SWOT analysis is a good and smart tool that enables the management to understand the internal and external environment. The strength and weaknesses are internal to the organization and opportunities and threats are external to the organization. The combination of internal and external factors helps the organizations in strategic decision-making. The SWOT matrix for Nestle can be shown as:

Swot Analysis for Nestle

Strength

Nestle is one of the biggest brands when it comes to food products and beverages with the annual revenue of more than $1 billion, and its presence is in almost 100 countries. It almost have 30 brands under its umbrella, and its huge investment on research and development and understanding of customer behaviour is what makes it stand apart from its competitors. It invested over 2$ billions on R&D in 2011 (Food, A. and Council,2012). In Australia they have very well understood the customer behaviours and successful integrated with some local players and have expanded their reach and have covered almost every geography. But what its strength is its brand name and global presence. Nestle is values almost $7 billions.

Weakness

Nestle weakness which is very critical in its sustainable growth and the trust development in the minds of customer which is its product quality and its food contamination issues especially in the Australian market where it is targeting health conscious people (Appiah-Adu,2016). And more over its corporate social responsibility activities are also not in place, considering that it is such a huge brand. 

Opportunities

There is huge opportunity in the segment, which Nestle has targeted in Australia, because people have become more health conscious and tasty for these kind of products have increased. Second merging with big companies to provide expertise and use new technologies.

Threats

There is a serious threat of reputation damage to nestle because of the food containment cases it has been involved in. This can lead to customer dissatisfaction and moreover changing customer habits is also a big threat. 

Conclusion

Nestle is doing very well in the global market and it has a very bright prospects in Australian market only if it is able to control the cases of food contamination and inappropriate food quality because the customer have become more and more conscious about there eating habits and Nestle is positioning as a nutrition provider. Their marketing activities are complementing their sales and their integrated marking communication is able to pass on the message to the customer they are targeting in the Australian market.  The analysis of the internal and the external factors would enable the management of Nestle to make the smart decisions about the future of the company. Nestle is a global brand and the company has been using different strategies in different parts of the world. The analysis of the external factors is a key input for Nestle to develop the customized strategies for different customer groups.

References

Appiah-Adu, K. and Amoako, G.K., 2016. The execution of marketing strategies in a developing economy: A case study of selected market leaders. African Journal of Economic and Management Studies, 7(1), pp.9-29.

Food, A. and Council, G., 2012. Healthier Australia Commitment.

Khamis, S., 2012. Putting the tea in australia: The Bushells brand 1998–2006. Australasian Journal of Popular Culture, 2(1), pp.9-22.

Leth, M. and Hems, L., 2013, November. The Potential for Creating Shared Value in Australia How Australian companies co-create long-term commercial and social value Draft Insights for a Green Paper. In Presented at the Creating Shared Value Forum (Vol. 26).

Lowrey, T.M. and Kronrod, A., 2016. Tastlé-Nestlé, Toogle-Google: The Effects of Similarity to Familiar Brand Names in Brand Name Innovation (No. 1121). HEC Paris.

Mialon, M., Swinburn, B., Allender, S. and Sacks, G., 2016. Systematic examination of publicly-available information reveals the diverse and extensive corporate political activity of the food industry in Australia. BMC public health, 16(1), p.1.

Rezaeegiglo, R., Sadouni, A., Aref, F., Khotbesara, P. and Eslam, N., 2014. Review and Rating factors affecting the Deployment of (CRM) Customer Relationship Management at Nestle Company. International Journal of Academic Research in Business and Social Sciences, 4(1), pp.539-547.

Richards, Z., Thomas, S.L., Randle, M. and Pettigrew, S., 2015. Corporate Social Responsibility programs of Big Food in Australia: a content analysis of industry documents. Australian and New Zealand journal of public health,39(6), pp.550-556.

Sacks, G., Mialon, M., Vandevijvere, S., Trevena, H., Snowdon, W., Crino, M. and Swinburn, B., 2015. Comparison of food industry policies and commitments on marketing to children and product (re) formulation in Australia, New Zealand and Fiji. Critical Public Health, 25(3), pp.299-319.

Singh, J. and Uncles, M., 2016. Measuring the market performance of brands. The Routledge Companion to Contemporary Brand Management, p.13.

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