Nestle Advantages and Disadvantages
Nestle is one of the world’s largest and most profitable firms, dealing in three key areas: nutrition, wellness, and nutrition. It believes in offering good, high quality, nutritious food to its customers. The firm has a global reach, with a number of advantages that put it head and shoulder above competitors, as well as disadvantages that pose a challenge to its continued dominance.
Nestle sells products in various sectors thus its competitors are many. In the food and beverage sections, P& G, Sara Lee, Unilever and Kraft stand as some of the leading competitors. Johnson & Johnson, P& G, and Bayer also have major stakes in the commercial products and pharmaceutical section. Under the private label, the firm sells a variety of products, with Wal-Mart, TESCO, and Aldi as tough competitors in that sector.
One of the advantages of Nestle is that it is a top overall player in the larger market, playing a leading role in various market segments, including in food and beverage sector, as well as in commercial products as well as in the pharmaceutical industry. Furthermore, Nestle’s human resources are among the major competitive factors it has. The firm’s knowledge of biotechnology as well as its ability to attract the most qualified personnel across the world gives the firm a major competitive advantage on the global market. Moreover, Nestle has a culture, bringing together people from across the world. The employees who work for the firm share the firm’s values, and the prestige associated with the organization further add to the employees’ high status in the society.
However, child labor issues have for some time persisted in the cocoa supply chain, a factor that continues to adversely influence the firm’s dominance along with maximization of its profit. In Ivory Coast where most of the cocoa used in the manufacture of chocolate along with other food products manufactured and sold by Nestle come from, child labor is a persistent issue, with most children working in cocoa firms reportedly aged between 12 and 16 years. The high demand for chocolate has reportedly caused Nestle to adjust some of its laws to make child labor a less significant issue. If the company is to continue making huge profits as well as remain relevant with regard to corporate social responsibility, child labor issues have to be addressed comprehensively.
Ethical issues have also been cited in some of Nestle’s operations. For instance, there was a time when consumers were concerned about Nestle’s marketing of alternatives or substitutes to breast milk. This marketing was mainly done in third world countries. The fact that consumers plus governments in such countries have little control over such marketing implies that the company carried on this unethical act for long. Nestle has a good reputation with an established brand name. In addition, it offers a large scope in terms of business variety. It utilizes economies of scale in its activities, and in so doing achieves the desired results in manufacturing, administration, and marketing sections. Nestle is also recognized as one of the most innovative corporations across the world. It is a leader in advancing new patents, with greater innovation capabilities. The research and development department is active and strong.
In conclusion, Nestle has many competitive advantages over its rivals in the various product sections in which it deals. However, a few disadvantages and challenges facing the firm present significant threats to its continued dominance in the various market sections, ranging from food and beverage to pharmaceuticals.