A Report on Nestle

Question: Describe about porters five forces and corporate strategy? Answer: Porters Five Forces: Keeping the focus upon the global market where Nestle operates in, Porters Five Forces would allow detailed study about the opportunities of the firm in the international market. Threats of New Entrants Although it is a food industry, Nestle is said to face severe threats of new entrants within the market. Irrespective whether domestic or international market, threat exists as it is an industry where barriers to entry are quite low (Jallow, 2009). In the United Kingdom, for instance, number of barriers to entry is considerably low and so many market players may enter and challenge Nestle through their product or pricing offering. Bargaining Power of Consumers Customers of Nestle have higher bargaining power as the brand increasingly depends upon customer appreciation for various products. Moreover, the consumer base in the UK is quite price-sensitive in nature. This increases the bargaining power of customers for Nestle(Lee, Sing-Young and à ªÃ‚ ¹Ã¢â€š ¬Ãƒ ­Ã‹Å"„à ¬Ã‚ ²Ã‚  , 2007). Threat of Substitutes This factor is quite strong for Nestle. Several firms exist in the market that produce similar products as they do at similar price level. Hence, Nestle focuses upon the need to develop products that cannot be imitated by any rival. Industry rivalry The industry rivalry for this company Nestle is quite higher irrespective of the places across the globe. This is even true for the United Kingdom where threat of competition is intense amidst other brands like Kellogs, etc(Mathur and Singh, 2010). Bargaining power of Suppliers The bargaining power of suppliers is quite low particularly in the economically backward countries. Being such a giant market, the company has the ability to bring several businesses to the suppliers and so they have to produce raw materials as per the business outline set by Nestle. Corporate Strategy: To mention about the corporate strategy of Nestle, it has operational pillars such as innovation as well as renovation, effective consumer communication, and operational efficiency, it has growth drivers like focus upon nutritional benefits of customers, their health and wellness, capturing emergent market as well as making positioned products popular, and premiumisation. Nestle is said have some key competitive advantages like unmatched product as well as brand portfolio, development capability, unmatched geographical presence, and increasing concern for people, national culture and people attitude(Renewal strategies at Ericsson, Nestl and Dow Chemical, 2008). This attracts more and more customers towards its brand. These effective strategies are implemented by the firm and these ensure its success within the market. The attribute that makes the firm even stronger is that of its capability of using potential brands to create competitive barriers. Nestle has incredible marketing stra tegies every time it launches new products in the market (Smith, 2012). Their key feature is that Nestle can provide quality as well as affordable products that even satisfy customer effectively. It even beats all its competitors by implementing strategies that are based on unmatched technique of research as well as development abilities. References Jallow, K. (2009). Nestl as corporate citizen: a critique of its Commitment to Africa report.Social Responsibility Journal, 5(4), pp.512-524. Lee, Sing-Young, and à ªÃ‚ ¹Ã¢â€š ¬Ãƒ ­Ã‹Å"„à ¬Ã‚ ²Ã‚  , (2007). The Globalization and Corporate Culture of Nestle and Samsung Electronics in Vietnam.International Commerce and Information Review, 9(4), pp.375-393. Mathur, I. and Singh, M. (2010). Corporate political strategies.Accounting Finance, 51(1), pp.252-277. Renewal strategies at Ericsson, Nestl and Dow Chemical. (2008).Strategic Direction, 24(10), pp.19-20. Smith, E. (2012). Corporate Image and Public Health: An Analysis of the Philip Morris, Kraft, and Nestl Websites.Journal of Health Communication, 17(5), pp.582-600.