Competitive Advantages of Nestlé: What Is Competitive Advantage?

Competitive Advantages of Nestlé
What is Competitive Advantage?

Competitive advantage refers to factors that allow a company to produce
goods or services better or more cheaply than its rivals. These factors
allow the productive entity to generate more sales or superior margins
compared to its market rivals.
The most important thing for most of business company is a sympathize
their effective performance among the other competitors in market place.
For some parties, like shareholders, it is necessary for company to make a
profit and gain above-average returns.
Competitors of Nestlé: Kraft Food, Danone, Hershey’s, Unilever,
General Mills, Kellogg, Lindt, Pepsico, Mondelez Etc.
Competitive Advantages of Nestlé: In order to reinforce their

competitive advantage, Nestlé created Nestlé Nutrition as an
autonomous global business unit within the organization, and charged it
with the operational and profit and loss responsibility for the claim-
based business of Infant Nutrition, HealthCare Nutrition, and
Performance Nutrition. This unit aims to deliver superior business
performance by offering consumers trusted, science based nutrition
products and services. The main competitive advantages of Nestlé are-
Research and Development: According to Nestlé, one of its key

competitive advantages is research and development (R&D) capabilities.
Nestlé’s R&D capabilities also stem from its R&D network. The
company has the largest R&D centers’ network of any food or beverage
company in the world, with 34 R&D facilities and over 5000 people
working in them. Every day, the research produces 10,000 safety results
across Nestle regional labs and 200,000 analytical results at the factory
level. Innovation has been at the heart of the company since its
beginning. Whether it’s about convenience, health or pleasure, the R&D
team creates trustworthy products, systems and services that contribute
to improving the quality of peoples’ lives.
The R&D team drives projects that go from developing packaging and
equipment, to designing food and beverages for the pilot of Solar
Impulse, a world-first attempt to circumnavigate the globe in a solar
powered aircraft; working with Imperial College London to improve
nutrition, or producing a tiny bouillon cube that tackles iron deficiency.
Clearly, there’s a huge range of projects for scientists, engineers,
nutritionists, food technologist, designers, regulatory specialists and
consumer care representatives to get involved in.
Nestlé’s superiority in R&D against its rivals provides a sustainable

competitive advantage and long-term success.
Partnership with Big Companies: As a global company, Nestlé faces a

wide range of complex challenges, from rising obesity to child labor and
climate change. So they need to pursue joint action to achieve
sustainable results. By building relationships with partners and like-
minded stakeholders at all levels, Nestlé enables people to listen, learn
and contribute effectively. They partner with others to deliver a bigger
impact.
Nestlé benefits from engaging with diverse stakeholders, and by

working together, they maximize what can be achieved. These
stakeholders include multilateral agencies, international organizations,
governments, academia, non-governmental organizations (NGOs) and
industry bodies.
Nestlé only considers partnerships that are relevant to Creating Shared
Value (CSV) commitments and that have a significant impact. To
identify the best matches, they established specific criteria that guides
them in the selection process.
Some partner companies of Nestlé are:

 Starbucks: (Type of business: Coffee)
In 2018, Nestlé agreed to pay Starbucks Corp. nearly $7.2 billion
for the rights to sell Starbucks-branded coffee in retail stores
outside of Starbucks locations.
 Gerber Products: (Type of business: Baby Food)

Gerber products Co. was acquired by Nestlé in 2007. Prior to the
Gerber acquisition, Nestlé had no major presence in the U.S. baby
food market.
 Ralston Purina (Type of business: Pet Foods)

Nestlé Purina Pet Care was founded as the Robinson-Danforth
Commission Co. Under Nestlé, the business has dramatically
expanded its global sales and is now called Nestlé Purina PetCare,
with popular brands such as Friskies, Pro Plan, and Felix.
 Atrium Innovations: (Type of business: Vitamins and

Supplements)
As consumers grew more health-conscious, Nestlé moved toward
healthier brands and purchased Atrium. The deal boosts Nestlé's
participation in the vitamin and supplement market.
Product Availability: Product availability is not necessarily having

items available 100% of the time but rather having items available when
the customer needs it. It is a matching game of timing the preparation of
an item nearest to when the customer seeks it. When it comes to Nestlé
they believe in strength in diversity. Despite being the largest
operational market in the world, the U.S only generates 28.5% of the
company’s total revenue stream. Their second largest market China,
generates only around 8%. In contrast, companies like Pepsico and
Cocacola earn 56% and 46% of their respective revenues from the U.S
only. Nestlé's varied types of products are operational in 189 countries
worldwide. This goes further illustrate how the company doesn’t pull all
their eggs in one basket. Compared to their rivals Nestlé has done an
exemplary job of branching out to almost every corner of the world,
ensuring product availability at a faster rate than any other market
operator. Their products are more frequently available on stores than
their competitors. Which has given them a competitive edge. They have
established product accessibility for online shopping faster than their
rivals as well, in markets all over the globe.
Plant Based Meals: Nestlé has just recently entered the meatless meal
market too, offering plant based meals for vegetarian as well as
‘flexitarian’ dieters. People started to consume less meat and include
more vegetable recipes into their eating habits. Nestlé seized this
opportunity to penetrate an untapped market and gain competitive
advantage by offering food options to a new branch of consumers. This
addition is generating higher sales volumes compared to their rivals as
well.

Competitive Advantages of Nestlé: What Is Competitive Advantage?

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

Competitive Advantages of Nestlé: What Is Competitive Advantage?

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Competitive Advantages of Nestlé: What Is Competitive Advantage?

Uploaded by

Copyright:

Available Formats

Competitive Advantages of Nestlé

What is Competitive Advantage?

Competitive Advantages of Nestlé: In order to reinforce their

Research and Development: According to Nestlé, one of its key

Nestlé’s superiority in R&D against its rivals provides a sustainable

Partnership with Big Companies: As a global company, Nestlé faces a

Nestlé benefits from engaging with diverse stakeholders, and by

Some partner companies of Nestlé are:

 Gerber Products: (Type of business: Baby Food)

 Ralston Purina (Type of business: Pet Foods)

 Atrium Innovations: (Type of business: Vitamins and

Product Availability: Product availability is not necessarily having

You might also like