During the 70s, Nestle anticipated a market growth of premium coffee based on the original concept of the inventor of the espresso, Luiggi Bezzera. The principle is simple: offer the finest Italian coffee directly to your home or office. Founded in 1986, Nespresso pioneered the allotted coffee market and started a new trend to be adopted worldwide.
Since it is the subsidiary of the international brand Nestle, it has not stopped causing wonders; there are more than 3 million customers worldwide. It also has had a growth of over 30% for 6 consecutive years and had passed one billion Swiss Francs sales in 2006 for the first time. The Nespresso concept is based on a trilogy which are, the best Grands Crus coffees, smart and stylish espresso machines and finally, personalized customer services.
Nestle Nespresso SA, headquartered in Paudex, Switzerland, has more than 1,700 employees. It sells its products directly to its consumers in over 50 countries and manages more than 79 prestigious shops located in most major cities worldwide. Its range includes espressos, a range that can be consumed in small cups (40 ml), and the Ungos for large cups (110 ml), without forgetting to mention the varieties of limited edition coffee produced in limited quantities and for a given time.
Nestle Nespresso SA, from its source, has maintained close trade relations with renowned manufacturers of household appliances who were carefully selected.
Each machine partner is responsible for the distribution, marketing, SEO in-store and servicing the machines of its own brand. Currently, Nespresso has 10 partners for the machines for home use, offering different Nespresso machine models.
Professional Nespresso machines and capsules are also available on the website, www.nespressopro.com, and through a network of independent importers and distributors, subsidiaries of Nestle Nespresso SA and local structures of the Nestle Group. Today, activities of Nespresso represent 25% of coffee sales.
To attract consumers, Nespresso uses desperate measures that focus on location of shops, machine designs, glossy magazines and sleek accessories. Nothing is left to change, everything is designed to evoke the sophistication of the brand. The success of this company represents an interesting case study, a rare case of innovations that led to choose among the various other cases to be presented in the course of "general policy of the company".
To accomplish this work of strategic analysis, we first presented data in order to understand the structure better and the various steps that must be embedded in our project. We later conducted research on the internet for all the data that is related to the firm and the market of Nespresso coffee pods.
In this paper we first discuss the Nespresso story since its establishment to the current position.In the second part, we will deal with the analysis as well as internal and external expectations of the company to identify its strengths and weaknesses. Following with consideration of strategic and critical aspects, we will close this work with recommendations.
Tags: Nespresso coffee pods, Nespresso machines, Luiggi Bezzera, international brand Nestle, household appliances
[...] - For machines: Nespresso can decide to reduce prices of its machines without taking into consideration that manufacturers must keep a margin. It is very important to note that the machines are sophisticated and focus on quality. Customers: Customers exert strong pressure on the market since they have greater choice. However, for proprietary systems, the pressure is reversed, because once the machine is purchased, the customer can only use the corresponding pod. In addition, the decrease in coffee consumption gives the customer a certain influence on the sector. [...]
[...] Strategic story In the 70s, the Research and Development department of Nestle moved towards an integrated system that consisted of a machine-dose "encapsulated" of coffee, each dose for a cup of coffee of 50 cc. The company invented the capsule containing freshly ground coffee. Nestle, the world's coffee "mass market" is preparing for the high end segment called "premium coffee" with the support of technological innovations. The first patent of the method was introduced in 1976 by the Development Centre of the Nestle Group. [...]
[...] of capsules sold around the world: 2.3 billion Market shares of the market of espresso in 2006: Strategic analysis: Strategic segmentation A-The expertise Set of skills and a know-how allows a company to be present in a strategic segment. The activities of Nespresso focus on the production and sale of coffee capsules. The major focus is on its core business and it has entered into agreements for complementary products, including the machines. In addition, with no intermediaries, Nespresso sells directly to customers, either through its network of stores (very luxurious) or through its website of sales). [...]
[...] D-Business Model 1 Client Selection: Primarily well-to-do individuals aged 35 and older Value proposition: high-tech machines to ensure excellent quality coffee than the ones offered by the standard market at a higher price, with a wide range of services accessible by phone or internet and exclusive shopping available in some countries and other services such as personalized mailings, upscale magazines, exclusive offers and limited editions Differentiation and control: an offer of customized products through direct marketing and also a NESPRESSO club which aims to build customer loyalty, to answer all queries and also to create a unique relationship between its members Appropriation of value and profit: to continuously innovate to attract its customers; to improve its product by offering new flavors each month and new machines every two years Value to the talent: training provided to service teams and personnel SWOT analysis Opportunities Development of the U.S. [...]
[...] - Nespresso should find an alternative to the aluminum capsule, very clean and very compatible with the natural image conveyed by the brand, or find a solution to the problem of recycling capsules in France. A sustainable solution would be a capsule rather than disposable. Bibliography 1 www.nespresso.com 2 www.tassimo.com 3 www.lavazza.com 4 www.senseo.com 5 www.stratégies.fr 6 www.mercator.fr 7 www.nouvo.ch 8 www.largeur.com 9 www.challenges.fr 10 http://www.lefigaro.fr/economie 11 http://www.ico.org/index.asp 12 http://weber.activsoft.com/NET/document/communiques/nestle_nespresso_de vrait_doubler_son_ca_dici_a_2010/index.htm 13 http://www.design-global.net/2005/06/index.html 14 http://www.actu-cci.com/pages/mag_article_print.php?id_m_a= http://www.mvconsult.be/Marketing/RecMar/hic56o/ ~ Doc_MA/MA06es_nescafe.htm 16 http://www.nouvelliste.ch/fr/news/economie/detail.php?idIndex=15&idCont ent= http://www.nouveleconomiste.fr/1383/1383-nespresso.html 18 http://visionary.wordpress.com/2007/03/13/nespresso-la-marque-qui- donne-l% E 99exemple / 19 http://www.lexpansion.com/economie/actualite-entreprise/nespresso- un-leader-oblige-de-jouer-serre_130563.html 20 http://www.lesinfos.com/news57166.html 21 http://www.mybusinessmodel.com/blog/?p=60 Annexes Appendix Media Release NESPRESSO expected to double its turnover by 2010 The company puts quality and customers at the heart of his International Development Egg / Zurich, March As expected from Berssenbrügge, President and CEO of Nestlé Nespresso SA, the company, the world's premium portioned coffee, crossed for the first time the billion Swiss francs in sales in 2006. [...]
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