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Master's Name

Student's name
Module 1 Strategy
Name of activity 1 Nespresso
Date 12/10/2022

eaeprogramas.es
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INDEX
1. Pestel analysis.
2. 5 porter forces.
3. Competitive advantage (VRIO).
4. Dafo
5. Analysis of Ansoff matrix proposals.
6. New proposal analyzed with Ansoff matrix.
Ap Business We make

PESTLE Analysis
EAC School I it happen

Politi
cal Technological Factor
Facto
r *The Government plans to allocate 12,360 million euros in research,
development and innovation (R&D&I) and digitalization by 2022.
Ukrainian war.
According to the planned accounts, this amount represents 7.6% more
November 2023 government elections.
compared to the amount that was allocated to these matters in 2021, which was 11,484 million
Sovereign country member of the EU constituted as a social and democratic state of law with a form of
euros.
government of parliamentary monarchy.

Economic Factor Legal Factor

Activity licenses
• Capsule coffee systems are protected by 1,700
• Second quarter GDP increase (1.1%) pessimism for the end of the year 2022 and the patents.
beginning of 2023, closing 2022 (4%), forecast 2023 (1.1%) • Royal Decree 1676/2012 of December 14, 2012, which
• We continue with the problems of raw materials limiting activity. approves the quality standard for coffee, will be taken into account.
• Inflation remains at very high levels (9%) Labor legislation
• Change in monetary policy depreciation of the euro against the dollar. • The reform contained in this royal decree-law
• Euribor (2.2%), rising, affecting the economy of the middle class. 32/2021, of December 28, aims to decisively correct this excessive
• Uncertainty with electricity restrictions. temporality.
• Spain has a fiscal framework characterized by a VAT
of 21% and a tax on business profits of 30% for large companies and
25% for small and medium-sized companies.
Fiscal legislation

Social Factor
• Tax measures (September 2022), temporary corporate
tax for large companies, Tax reduction for self-employed workers and
SMEs.

Environmental Factor
The prospects for the labor market in 2022 and 2023 will be conditioned by the

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evolution of GDP. On the other hand, in 2023 job creation will slow down to 1.1%.
Meanwhile, the unemployment rate, after having reached 14.8% in 2021, will continue
to decline in 2022 (Current 12.48%). In 2023, the rate of fall in the unemployment
rate will slow down, given the lower expected creation of jobs, and will decrease
three tenths, to 12.7%.
Social spending will increase by almost 9.6 billion euros in 2022, of which almost
C. Spain is part of the one hundred and eighty countries whose
policies have the highest environmental performance,

W.
specifically it ranks twenty-seven, according to the EPI
7.9 billion will be allocated to the payment of pensions, which will revalue more (Environmental Performance Index) 2022.
than 2%. The water suitable for consumption in Spain in 2021 was 98.5% of the
The minimum interprofessional salary is 965 euros. total.
Credit to families grew by 0.7% in August, and among companies, by 1.4% More than Pretty good air quality compared to other developed countries.
one and a half million households will end the year over-indebted due to the
inflationary crisis.
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EAC School I it happen VRIO ANALYSIS

ABILITY ¥ (value) R (rare) I (inimitable) □ (Organization)

Patents
Centralized distribution
4*
• z Temporary VC

44 Competitive parity
center 62 ■^i

Centralized production
4 2
4) z Competitive parity

Machine technology
{ and
6 z Temporary VC

Product technology
Only one sold! of its
{ «4 z Sustained VC

capsules « z z Sustained VC

Coffee raw material

Personalized “mico 5”
the Master er
44
z Sustained VC

service « { z

z Sustained VC

After-sale service 4 •
z Competitive parity

student's bre 1 «4 —‘2 «2

z Competitive parity

High quality experts v v z Sustained VC

Calé quality (AAA ]

bre t of the activity
w 4 4 w Sustained VC

ad / w Z • VC to exploit

to club nespresso to ✓ n • Sustained VC

Solidarity rice project

w n EITHER

z Temporary VC

Premium brand positioning

* ■Z V z Sustained VC

Customer loyalty
✓ n z

z Sustained VC

ograms.es ° legislation w EITHER

v Temporary VC

Sustainability w" and'

• z Temporary VC
Ap Business We make

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COMPANY: Hespresso_______________________________________________________________________________________________________________________________________

EXTERNAL THREATS

What does the competition do?

What factors are a threat to the company?
INTERNAL WEAKNESSES
• Economic recession Europe.
What can the company improve ? « Greater number of competitors.
In what way does the company have fewer advantages than others? • Rising Euribor affecting the economy of middle class families.
• Compostable capsules.
• Cost per capsule unit. • Price of raw materials.
• Diversify the country of manufacture. • Shortage of raw materials affecting activity (High quality).
• Increased white label consumption in times of crisis.
• Diversify the distribution chain (distribution plant).
«
• There is a lack of recycling points. •
• Productive capacity lower than market demand. •
• It does not cover all market niches. •
name of the Master ttt •
student's name

EXTERNAL OPPORTUNITIES
dulo INTERNAL ITALIES
What trends can the company benefit from ?
What is theIcompany
bre 1 from effective
the T activity at? and what are their re ea ac va factors
to others What factors are an opportunity for the company?

• High quality coffee. • Coffee capsule market on the rise (4% annually).
• The AM sustainable quality program. • Carbon footprint reduction.
• Own boutiques. • Greater demand for new Premium coffees.
«Nesp presso club. • Customer demands higher quality (aroma, flavor, color, etc.).
• The positive Cup. • Product sustainability.
• Brand positioning. • Coffee culture on the rise.
• Product technology. •
rogramas.es ality.. •
ontinua (blue ocean). •
•
•
Yo
•
•
Ap Business We make ansoff matrix
EAC School I it happen Create a line of Nespresso cafes where you can consume high-quality pastries/bakery
Development of stores as a social club

Market penetration Development of new products Market penetration Development of new products

Add traditional product value

Capture the competition. Capture the competition.
Capture substitute products Capture substitute products.
Increase average ticket

Development new markets Diversification Development new markets Diversification

New market segments or niches Horizontal

New market segments or niches Horizontal Integration
Integration

EXISTING PRODUCTS/SERVICES NEW PRODUCTS/SERVICES EXISTING PRODUCTS/SERVICES NEW PRODUCTS/SERVICES

If we analyze the matrix we have compelling arguments that would enhance growth. In this proposal we increase customer service, which opens up the opportunity for us to attract clients from other sectors and with direct competition in the
MARKETS CURRENT MARKETS

Taking into account the economic situation in Europe, the political problems of the war in Ukraine, the end of Covid and that the
Nespresso market continues to grow. I propose to postpone this proposal until economic and political stability and increase capacity to
cover the 4% annual increase in demand.
Marketing investment promoting soccer team
coffee sector. At the same time, I consider that this proposal would lose image. The brand has been able to position itself as exclusive and glamorous in its
brand image, undertaking actions to reinforce it. The Nespresso brand cannot be purchased in any supermarket, it can only be purchased in its own stores, thus
creating a sign of exclusivity.
Marketing investment promoting soccer team

Market penetration

Capture the competition.

Capture substitute products
Increase average ticket
NEW MARKETS CURRENT MARKETSNEW

Diversification Development new markets

Horizontal Integration

NEW PRODUCTS/SERVICES EXISTING PRODUCTS/SERVICES NEW PRODUCTS/SERVICES

acasdasaDS
Over the years Nespresso has launched very successful marketing campaigns and all of them had in common that they reinforced the exclusivity of
their customers. If we look at this brand positioning, soccer is considered a people's sport worldwide. With which there is a potential risk of
losing brand image that would result in the loss of customers. I consider that this proposal does not provide growth based on the previous
analyses.
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c. MICROENVIRONMENT (PORTER'S 5 FORCES ANALYSIS)
Substitute
products

New entrants

requires various
features for
production, also has a
Establishments that offer development program
variety of coffees in all types support him where he supports
presentation, for example: small farmers with the aim
Starbucks is one of the brands
to obtain mutual benefits.
offering a wide variety of
coffees and even other types of Nespresso targets a niche
drinks like frozen, juices, etc. and
complements I take desserts;
There are also brands that
□they offer ground coffee, soluble or
in grain, consumers of
cafes have several alternatives
The rafe market is very broad, so the appearance of new competitors is a great
threat in those countries where Nespresso has not managed to position itself and
may appear with more powerful and good quality preys.
Rivalry between
competitors shopping.
Nespresso has a great Suppliers
variety of competitors
capsule coffee producers,
The problem is that many
competitive capsules are
compatible with machines
Nespresso

Nespresso is very demanding in market, which are very

selecting your suppliers demanding in quality so
due to its power the price is not relevant to the
negotiation, coffee in capsules time of purchase,
 It also has a segment of
business clients between
the hotels they prefer
quality and exclusivity in their
establishments.