Nestle Swot Analysis

Nestle company has been founded in 1866 by Swiss chemist – Henri Nestle. Main aim of this company was to produce high quality milk food for babies. It had become the world’s largest food and beverage company by the end of 2006. Its estimated assets value is 101,8bn CHF and yearly sales reach 98,4bn CHF. (HYPERLINK "http://www.nestle.com/InvestorRelations/Reports/FullYearFinancials/2006.htm"http://www.nestle.com/InvestorRelations/Reports/FullYearFinancials/2006.htm) 265,000 people are employed in almost every country in the world. Nestle is a global market leader in many product lines including milk, chocolate, confectionery, bottled water, coffee, food seasoning and pet food.

As we can realize such an enormous company has got many Strengths, Weaknesses, Opportunities and Threats. In order to the question I will undertake a SWOT analysis of this company.

I have mentioned above that Nestle as a global market leader has got many strengths. First of all they had a genius CEO, Peter Brabeck-Letmathe. Until he was CEO of the company his priority was to renovate existing product and innovate new products. He was trying to change everything as fast as expectations of consumer have been changing. Nestle with Brabeck in charge, created a magnificent management effectives. If we analyze Management Report from 2006, and we look on key figures, we will see that they managed to increase sales from 91,1m to 98,4m CHF. It might be the reason of another strength which are competitive prices of many products. Following this we will notice that Nestle has got extremely huge variety of products which are known globally. On page 65 of annual management report from 2006 we will see that for over 60 years they are absorbing key strategic companies which are making Nestle of the strongest corporation on the market. Another strength is leadership in nutrition, especially infant nutrition. Nestle key priority is to innovate nutrition products which are sold in hospitals, clinics and pharmacies. They launched Nutritional Compass, a new labeling system for their products. Global leader is developing solutions for early stages of life milk food as well. I need to mention that Nestle has got very well developed Research and Development department. More than 3,500 people from about 50 countries are focusing on products which are the most beneficial on health and nutrition. R&D departments are using the newest and highly advanced technology, so that makes them strong competitor on the market. Another strength that Nestle has is that they are low cost operators. That situation let them to beat the competitors in producing lower cost products. Consecutive strength for them is that Nestle brand is well known and respected by consumers.

Nestle has got some weaknesses as well, maybe not that much as strengths but some of them are making the company anemic on the world market. In case of high competitive situation their prices are sometimes too high. Nestle did not developed enough competitive unit. As I wrote above Nestle is trying to innovate their products, but sometimes not fast enough than