Nestle SWOT & PESTLE Analysis

Strength

1. World renowned brand: Nestlé has a large global presence across over 186 countries. It also has a different branding for every product in its 4 major categories. It is the largest food company in the world and one of the main shareholders of L'Oréal, largest cosmetic company. Nestlé also has a differentiated product distribution across the world depending on the target audience. Nestlé's decentralised structure enables agile responses to shifts in consumer needs, customer demands, and supply chain challenges, thanks to a global, balanced, and diversified portfolio. Nestle narrowed their geographic focus even more in 2021, establishing Zones North America and Greater China effective from January 1, 2022.

2. Deep product penetration: Nestlé has products in only 7 main categories- Powdered and Liquid Beverages, Nutrition and Health Science, Milk products and Ice cream, PetCare, Prepared dishes and cooking aids, Confectionery and Water but has a great product depth. Nestlé Health Science is transforming itself into a nutrition and health powerhouse by combining strong organic growth with strategic acquisitions. Nestlé Health Science becomes the industry leader in vitamins, minerals, and supplements with the acquisition of The Bountiful Company's core brands. 174 billion servings of fortified foods and beverages were rolled out in 66 countries with higher vulnerability to micronutrient malnutrition. It highly focuses on R&D and attention-to-detail rather than just widening of horizon. The Swiss food giant capitalizes on recent consumer trends such as organic, whole grain, reduced calorie and natural foods. Nestlé is also working towards introducing more plant-based alternatives. Nestle focuses on its core competencies of delivering healthiest and tastiest products in each category that differentiates itself from their competitors. They concentrate on offerings with nutrition, health and wellness benefits. For e.g. most food and beverages, especially those for children are fortified with micronutrients such as iron, iodine, vitamin A and zinc.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Water conservation initiatives: With global demand for water increasing, several organization often struggle to find long-term sustainable sources of water. With depleting water suppliers, companies need to adjust and improvise to do more with less water. Nestlé as a responsible organization supports water treatment before discharge and improves access to water and sanitation across its entire value chain. A total of 516 water-saving projects are run at the factories, saving 3.7 million m3 of water per year. Continuous process evaluation is done by measuring Water Resource Reviews. The company however has been charged with water usage issues and faced class action lawsuits over water consumption in the past and thus needs to be careful with the same. Nestlé Waters is committing CHF 120 million to support the implementation of more than 100 projects aimed at restoring ecosystems in the areas surrounding its bottling plants. By 2025, these projects will have helped nature retain more water than the business consumes.

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