Nestle S.W.O.T analysis

About this template

This Nestle SWOT analysis template offers insight into the company’s strengths, weaknesses, opportunities, and threats. This way, you can better understand its marketing and production strategies. So, download this template and explore the factors that may influence Nestle’s decision-making process.

Strengths

• Brand reputation:

Nestle has invested a lot in its popularity through marketing and strategic planning. Currently, it enjoys a loyal customer base and improved brand awareness.

• Global recognition:

  Nestle has a global customer base, as it operates in over 186 countries and has an operational brand in 83 countries. In 2021, 45% of its profits came from the Americas, while 30% and 25% were obtained from Europe, the Middle East, and Asia.

• Diverse portfolio:

Nestle is a highly diversified name, which has over 2000 individual sub-brands like Nescafe, Milo, Maggi, and KitKat. This variety of daughter brands helps the company with financial stability and profits.

• Good customer relationship:

Nestle’s big name translates into a good customer relationship. It has also helped the company survive in the highly competitive packaged food industry.

Weaknesses

• Expensive model advertising:

Nestle's marketing is highly dependent on traditional modes of print and TV. The company has a minimum focus on modern-day marketing trends. It costs their marketing department a lot with minimal outcome.

• Social controversies:

Despite massive popularity, Nestle has been involved in controversies, such as the privatization of water, the use of lead in Maggi, and problematic labeling. It has impacted their business significantly, especially in India.

• Dependency on Western markets:

As discussed above, almost half of Nestle’s revenue comes from North American and European markets. This dependency makes the brand vulnerable to economic recessions and inflation.

• Organizational structure:

The organizational structure of Nestle is not management-centric; rather it is based on products. Plus, there is no geographical separation, which causes delays in decision-making and a lack of control over the quality.

Opportunities

• Improving reputation:

Nestle must take immediate steps to address negative issues, that might have impacted the brand’s image. The company can introduce transparency in its supply chain, production methods, and social initiatives.

• Venturing small food startups:

Nestle strives to partner with new businesses. Under their Nestle Innovation Accelerator program, the company aims to support food and beverage startups.

• E-commerce:

The growth of e-commerce will help Nestle expand its distribution channels. This way, the company can launch online stores with easy access to products for global customers.

• Shift to rural markets:

Nestle has shifted its focus to expansion in rural markets, especially in India. Recently, the company has aimed to cover around 120,000 villages by 2024.

Threats

• Water scarcity:

Nestle is a leading bottled water supplier, which means it is impacted by water scarcity. However, the company aims to invest in water treatment and recycling facilities to avoid the threatening situation.

• Rising competition:

Global brands like Hershey’s, Unilever, PepsiCo, Coca-Cola, and General Mills are a greater threat to Nestle. Plus, social controversies are adding to this situation.

• Government policies and taxation:

Government rules may impact Nestle’s operations globally. Rising commodity prices, inflation, and labor costs cause the company to raise prices in different locations, which may influence sales, especially when consumers have cheaper options.

• Climate impact:

Climate change and global warming have affected the production of coffee, wheat, and other dairy products. It has slowed down Nestle’s production and sales operations in some locations.