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Growth Strategies Case Study
Case Title:
Nestlé’s ‘Nutritious’ Growth : Peter Brabeck’s Organisational Strategies
Publication Year : 2006
Authors: Sai Prasanna, Nusrath Jahan Maldar
Industry: Food and Beverage
Region: US Europe
Case Code: GRS0208
Teaching Note: Available
Structured Assignment: Available
OR
Abstract:
At a time when the overall food market is growing sluggishly at 1.55 a year, Peter Brabeck, the CEO of the world’s largest food-maker, Nestlé, had different plans. He was too bold to see his company’s growth shoot up by 5%–6%, and that too excluding acquisitions. In a market scenario, where the demand in the food industry was shifting from convenience food to nutritious food, Nestlé decided to focus on becoming a ‘nutrition, health and wellness’ company. Nestlé made nutrition into a full-fledged business division, on par with other food and beverage divisions. This case highlights how Nestlé nourished its corporate culture towards innovation through R&D in health and nutrition, and developed strategic tools for consumer information and education, and marketing strategies. Acquiring the weight management company, Jenny Craig, was aimed at reinforcing Nestlé in the nutrition segment. However, Nestlé faced intense competition not only from other manufacturers such as Unilever, Kraft, Pepsi and Danone, but also from the growing popularity of private label brands of retailers like Wal-Mart, Carrefour and Tesco.
Pedagogical Objectives:
- To analyse the emerging trends, and identify the critical success factors and key growth areas in the food industry
- To highlight the growth strategies implemented by Peter Brabeck to transform Nestlé into a ‘nutrition, health and wellness’ company
- To examine the challenges to Nestlé’s success in the nutrition segment due to competition from other manufacturers and retailers.
Keywords : Growth Strategy; Food and Beverage Industry; Health and Nutrition; New Growth Initiatives; Kraft; Growth Strategies Case Study; Danone; PepsiCo; Wal-Mart; Carrefour; Tesco; Customer-Centric Innovation; Inorganic Growth; Private Label Brands; Operational Efficiency – GLOBE; Consumer Trends and Preferences; Decentralisation; New Product Development; Innovation; Segmentation; Targeting; Marketing
Contents :
Food & Beverage Industry: Competitive Dynamics
Average Annual Shareholder Returns
Top Twenty Food and Beverage Companies
Global Value Networks: How Power Has Changed in Food Industry
Private Label Share of Total Retail Sales in 2000
Private Label Share of Total Packaged Food Retail Sales
Global Food Industry Segmentation by Region
Top Ten Global Food Trends
