ONLINE CUSTOMER REVIEWS: ASSESSING THEIR IMPACT

ON CONSUMER DECISION MAKING AT NESTLE

Submitted in partial fulfillment of the requirements

for the award of the degree of

Bachelor of Business Administration (BBA)

To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Ms. Manisha Submitted by: Mehak Gupta

Roll No.: 35124401721

Institute of Innovation in Technology & Management,

New Delhi – 110058
Batch (2021-2024)
 Certificate

I, Mr./Ms. MEHAK GUPTA, Roll No. 35124401721 certify that the Major Project
Report BBA-314) entitled “ONLINE CUSTOMER REVIEWS: ASSESSING THEIR
IMPACT ON CONSUMER DECISION MAKING AT NESTLE” is done by me and it is
an authentic work carried out by me at INSTITUTE OF INNOVATION IN
TECHNOLOGY AND MANAGEMENT. The matter embodied in this project work has
not been submitted earlier for the award of any degree or diploma to the best of my
knowledge and belief.

MEHAK GUPTA
Signature of the Student
Date:

Certified that the Major Project Report (BBA-314) entitled “ONLINE CUSTOMER
REVIEWS: ASSESSING THEIR IMPACT ON CONSUMER DECISION MAKING AT
NESTLE” done by Mr./Ms. MEHAK GUPTA, Roll No. 35124401721, is completed
under my guidance.

Signature of the Guide:

Name of the Guide: Ms. MANISHA
Designation: PROFESSOR
Date:

Countersigned
(Director / Project Coordinator)
 CONTENTS

S No Topic Page No
1 Certificate (s) -
2 Acknowledgements -
3 Chapter-1: Introduction
4 Chapter-2: Profile of Industry/Company
5 Chapter-3: Research Methodology
6 Chapter-4: Data Presentation & Analysis
7 Chapter-5: Summary and Conclusions
8 References/Bibliography -
9 Appendices -
 CHAPTER-1

INTRODUCTION

1.1 INTRODUCTION

In the digital age, online customer reviews reign supreme, wielding immense power over
consumer decision-making. These digital whispers hold the key to influencing millions,
acting as both trusted advisors and persuasive sirens. Their impact is undeniable, swaying
perspectives and ultimately shaping purchasing behaviours.

Online reviews containing judgement and opinions from previous consumers play an
increasingly important role in prospective consumers’ purchase decisions. More and
more consumers choose to read online reviews to get sufficient knowledge of the product
before making a purchase decision. However, the exploding amount of online review
information makes it difficult for consumers to identify useful and necessary information
efficiently, resulting in information overload. Therefore, to account for information
overload and reduce consumers’ effort and time in decision-making, review platforms
incorporate various strategies dealing with online reviews, such as providing voting
systems to evaluate the helpfulness of reviews, allowing consumers to customize the sort
order of reviews based on their preference, and displaying text reviews as well as
summary rating statistics for consumers.

The various online product review and recommendation platforms differ in their
objectives, function and characteristics. The literature has so far paid little attention on
function characteristics of these platforms as an element of customer adoption and
preference. Given the importance of this form of customer generated content on business
sales and profitability the monitoring and often responding to customer reviews by
business organizations has become a major managerial challenge and an important
reputation management issue. In order to respond efficiently to customer reviews
companies need to identify consumer reviews platforms, understand their characteristics
and continuously assess their impact on consumer purchasing decisions.
First and foremost, online customer reviews serve as a primary source of information for
prospective buyers. These reviews offer real-world insights into the quality, performance,
and usability of products and services, providing invaluable guidance in an increasingly
crowded marketplace. Consumers often turn to online reviews to gain assurance and
confidence in their purchasing decisions, particularly when considering unfamiliar brands
or products.

Moreover, online customer reviews play a crucial role in building trust and credibility for
businesses. Positive reviews serve as endorsements of a brand's offerings, reinforcing its
reputation and fostering trust among potential customers. Conversely, negative reviews
can raise red flags and deter consumers, highlighting areas for improvement and
prompting businesses to address customer concerns promptly.

Additionally, online reviews function as a form of social proof, influencing consumer

behavior through the power of peer recommendations. When individuals see positive
feedback from others, they are more likely to perceive the product or service favorably
and follow suit in their purchasing decisions. This social validation not only drives sales
but also strengthens brand loyalty and advocacy over time.

Nestle has a massive volume of online reviews, reflecting the diversity of its products and
consumers. Reviews range from positive endorsements to strong criticisms, highlighting
various aspects of the brand and its products. Sentiment can vary significantly based on
the specific product or category being reviewed.

The impact of customer reviews on decision-making is profound and multifaceted,

influencing consumers at various stages of the purchasing process.
o Information Gathering: Customer reviews provide valuable information that aids
consumers in their decision-making process. Prospective buyers seek out reviews
to gather insights into product features, quality, performance, and overall
 satisfaction. These reviews offer real-world experiences and opinions from other
consumers, helping individuals make informed choices.
o Building Trust and Credibility: Positive customer reviews can significantly
impact trust and credibility. When consumers see positive feedback from other
users, it fosters confidence in the product or service, making them more likely to
trust the brand and proceed with a purchase. Conversely, negative reviews can
erode trust and deter potential buyers, highlighting potential issues or
shortcomings that may affect their decision.
o Validation and Social Proof: Customer reviews serve as a form of social proof,
validating the quality and value of a product or service. When individuals see that
others have had positive experiences, it reinforces their belief in the product's
efficacy and increases their likelihood of making a purchase. This validation from
peers carries significant weight in decision-making processes, particularly in
situations where consumers feel uncertain or indecisive.
o Influencing Perceptions: Customer reviews shape consumer perceptions of brands
and products. Positive reviews can enhance a brand's reputation, positioning it as
trustworthy and reliable in the eyes of potential customers. Conversely, negative
reviews can tarnish a brand's image and lead to negative associations, impacting
consumer attitudes and purchase intentions.
o Comparison and Evaluation: Customer reviews facilitate comparison shopping by
allowing consumers to assess multiple options based on the experiences of others.
By reading reviews, individuals can weigh the pros and cons of different products
or services, helping them make informed decisions that align with their
preferences and needs.
1.2 OBJECTIVEOF THE STUDY

• To study the factors influencing the consumer perception and buying decision of
Nestle.
• To study the level of consumer satisfaction of Nestle.
• To study the demographic profile of consumers.
• Investigate the influence of online customer reviews on consumer decision-
making for Nestle products across various categories (e.g., food, beverages,
healthcare).
 • Analyse the factors that most impact consumers' trust and purchase choices based
on online reviews at Nestle.
• Assess variations in review impact across different demographics and consumer
segments (e.g., age, income, location).

1.3 LIMITATIONS OF THE STUDY

• The research may face limitations regarding the generalizability of findings due to
sample demographics and size.
• The study's reliance is basically on one country’s data as on nestle India.
• External factors such as marketing campaigns and competitor actions could
influence consumer decision-making independently of online reviews.

1.4 LITERATURE REVIEW

The literature review section of this research project provides a comprehensive overview
of existing studies and scholarly works pertaining to the influence of online customer
reviews on consumer decision-making processes. It delves into various theoretical
frameworks and empirical research findings to examine the significance of online
reviews in shaping consumer perceptions, influencing purchase intentions, and impacting
brand outcomes. This is the secondary research done by me on the topic “Online
customer reviews: Assessing their impact on consumer decision making”.
In the rapidly evolving landscape of consumer behavior and digital marketing, the
influence of online customer reviews on purchasing decisions has emerged as a critical
area of study. This literature review explores the significance of online customer reviews
and their impact on consumer decision-making processes, particularly within the context
of Nestlé, a global leader in the food and beverage industry.

 Theoretical Frameworks:

Theoretical frameworks such as social proof theory and information processing theory
provide valuable insights into the mechanisms through which online customer reviews
influence consumer behavior. Social proof theory posits that individuals are more likely
to conform to the actions of others, making online reviews a powerful source of influence
in guiding consumer choices. Information processing theory suggests that consumers
engage in systematic evaluation of online reviews to gather information and make
informed decisions.

 Impact of Online Customer Reviews:

Numerous studies have demonstrated the significant impact of online customer reviews
on consumer decision-making. Positive reviews have been found to enhance brand
reputation, increase trust, and positively influence purchase intentions. Conversely,
negative reviews can deter potential buyers and damage brand credibility. Research by
scholars such as Chevalier and Mayzlin (2006) and Zhu and Zhang (2010) has
highlighted the importance of review volume, valence, and credibility in shaping
consumer perceptions and behaviors.

 Nestlé and Online Customer Reviews:

As a multinational corporation with a diverse portfolio of products, Nestlé faces unique

challenges and opportunities in managing online customer reviews. While the company
has implemented strategies to engage with consumers and monitor online feedback, there
remains a need for further research to assess the specific impact of online reviews on
Nestlé's brands and product lines. Studies focusing on Nestlé's online reputation
management efforts, consumer sentiment analysis, and the integration of online reviews
into marketing strategies would provide valuable insights into the company's approach to
leveraging online customer feedback.

 Future Directions:

Future research should aim to address several key areas of inquiry, including the role of
online reviews in differentiating Nestlé's brands, the impact of review platforms on
consumer perceptions, and the effectiveness of Nestlé's response strategies to online
feedback. Additionally, longitudinal studies could examine how online reviews influence
consumer loyalty and brand advocacy over time, providing Nestlé with actionable
insights to inform strategic decision-making.

Online customer reviews play a crucial role in shaping consumer perceptions and
decision-making processes, presenting both challenges and opportunities for companies
like Nestlé. By understanding the mechanisms through which online reviews influence
consumer behavior and strategically managing online feedback, Nestlé can enhance its
brand reputation, build trust with consumers, and drive long-term success in the digital
marketplace.

CHAPTER-2
 COMPANY PROFILE

1.1 ABOUT THE COMPANY

NESTLÉ's relationship with India dates back to 1912, when it began trading as The
NESTLÉ Anglo-Swiss Condensed Milk Company (Export) Limited, importing and
selling finished products in the Indian market.

After India's independence in 1947, the economic policies of the Indian Government
emphasised the need for local production. NESTLÉ responded to India's aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where
the Government wanted NESTLÉ to develop the milk economy. Progress in Moga
required the introduction of NESTLÉ's Agricultural Services to educate, advise and help
the farmer in a variety of aspects. From increasing the milk yield of their cows through
improved dairy farming methods, to irrigation, scientific crop management practices and
helping with the procurement of bank loans.

NESTLÉ set up milk collection centres that would not only ensure prompt collection and
pay fair prices, but also instil amongst the community, a confidence in the dairy business.
Progress involved the creation of prosperity on an on-going and sustainable basis that has
resulted in not just the transformation of Moga into a prosperous and vibrant milk district
today, but a thriving hub of industrial activity, as well.

NESTLÉ has been a partner in India's growth for over a century now and has built a very
special relationship of trust and commitment with the people of India. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood
to about one million people including farmers, suppliers of packaging materials, services
and other goods.

The Company continuously focuses its efforts to better understand the changing lifestyles
of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and
Wellness through its product offerings. The culture of innovation and renovation within
the Company and access to the NESTLÉ Group's proprietary technology/Brands
expertise and the extensive centralized Research and Development facilities gives it a
distinct advantage in these efforts. It helps the Company to create value that can be
sustained over the long term by offering consumers a wide variety of high quality, safe
food products at affordable prices.

NESTLÉ India manufactures products of truly international quality under internationally

famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE,
MILKMAID and NESTEA and in recent years the Company has also introduced
products of daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk,
NESTLÉ Dahi and NESTLÉ Jeera Raita.

NESTLÉ India is a responsible organisation and facilitates initiatives that help to improve
the quality of life in the communities where it operates.

1.2 PRODUCTS OF NESTLE

Nestlé, as a global leader in the food and beverage industry, offers a wide range of
products catering to various consumer needs and preferences. Here’s an overview of
some nestle products:

Food & Beverages:

1) Breakfast Cereals: Cereals like Cheerio’s, Nesquik, and Shredded Wheat offer
convenience and variety for breakfast, catering to children and adults alike.
Recent trends focus on healthier options like whole grains and fibre.

2) Coffee: Nespresso and Nescafe dominate the coffee segment, offering premium
single-serve capsules and instant coffee, respectively. Sustainability and ethical
sourcing are increasingly important considerations.
 3) Confectionery: KitKat, Aero, and Smarties are iconic chocolate bar brands, while
Haagen-Dazs and Movenpick represent premium ice cream options. Concerns
about sugar content and responsible sourcing are present.

4) Culinary: Maggi bouillon cubes, sauces, and seasonings provide convenient flavor
solutions. Healthier options like vegetable-based broths are gaining traction.

5) Water: Nestlé Pure Life and Perrier bottled water cater to the growing demand for
hydration and premium options, but sustainability concerns exist.

Nutrition & Health:

1) Infant Nutrition: Formula brands like NAN and Gerber support early childhood
development, but face competition and ethical concerns regarding marketing
practices.

2) Healthcare Nutrition: Specialized formulas for specific conditions and age groups
address dietary needs, highlighting Nestle's expertise in nutritional science.

3) Vitamins & Supplements: Brands like Centrum and Berocca cater to general
health and well-being, but transparency in ingredient sourcing is crucial.

Pet Care:

1) Purina: Pro Plan, Fancy Feast, and Felix brands offer dry and wet food for dogs
and cats, with a focus on nutrition and palatability. Sustainability efforts in pet
food packaging are gaining importance.

Some of the additional considerations of nestle on their products:

 Nestle operates in over 180 countries, with regional variations in product

offerings and branding.
 The company faces criticism regarding sustainability practices, ethical sourcing,
and marketing strategies, particularly in developing countries.
 Nestle is actively addressing these concerns through various initiatives and
partnerships.

Professional Resources:

 Nestle Annual Report: Provides detailed information on its product portfolio,

financial performance, and sustainability efforts.
 Industry Reports: Euromonitor and Nielsen offer market research and analysis on
the food and beverage industry, including Nestle's position.
  Sustainability Reports: Nestle publishes reports outlining its sustainability goals
and progress in various areas.

1.3 HISTORY ABOUT NESTLE

Nestle's journey began in 1866 with two separate Swiss enterprises. Henri Nestlé, a
pharmacist, developed a breakthrough infant formula, while the Anglo-Swiss Condensed
Milk Company produced condensed milk for wider consumption.

1867-1904: The Pioneer Years

 Henri Nestlé's "Farine Lactée" formula saved the life of a malnourished infant,
gaining traction and establishing the iconic Nestle brand with its bird's nest logo.
 The Anglo-Swiss Condensed Milk Company expanded its offerings to include
milk powder and chocolate, establishing a strong presence in Europe and the
United States.

1905-1918: Merger and Global Growth

 The two companies merged in 1905, forming the Nestle we know today.
 World War I presented challenges but also opportunities for expansion into
wartime food production.

1919-1945: Post-War Expansion and Diversification

 Nestle continued its global expansion, acquiring companies and launching new
products like Nescafe instant coffee and Maggi bouillon cubes.
 World War II again impacted operations, but Nestle focused on humanitarian aid
and post-war recovery.

1946-Present: Innovation and Sustainability Efforts

 Post-war saw rapid growth and diversification into new categories like frozen
food and pet care.
 Nestle faced various criticisms regarding marketing practices, particularly in
developing countries.
 The company has responded by focusing on sustainability, responsible sourcing,
and ethical marketing.

Key milestones:

1938: Launch of Nesquik chocolate milk powder

1948: Acquisition of Perrier mineral water
1974: Launch of KitKat chocolate bar
1988: Acquisition of Rowntree's confectionery business
 2010: Launch of Nespresso VertuoLine system
2016: Acquisition of Blue Bottle Coffee

Today, Nestle remains a global leader in the food and beverage industry, facing
challenges and opportunities in a dynamic market. They continue to evolve, adapting to
consumer preferences and addressing concerns around sustainability and ethics.

1.4 ORGANISATIONAL STRUCTURE

Mr. SURESH NARAYANA

(CHAIRMAN AND
MANAGING DIRECTOR)

Ms. Svetlana Mr. Pramod Kumar Mr. Satish

Boldina Rai (COMPANY Srinivasan
(EXECUTIVE SECRETARY & (EXECUTIVE
DIRECTOR- COMPLIANCE DIRECTOR-
FINANCE) OFFICER) TECHNICAL)

Board of directors:

Mr. Suresh Narayanan Chairman and Managing Director

Ms. Svetlana Boldina
Mr. Satish Srinivasan
Dr. Swati A. Piramal
Mr. R. V. Kanoria
Mr. P. R. Ramesh
Ms. Anjali Bansal
Ms. Alpana Parida
Executive Director – Finance & Control and
CFO
Executive Director - Technical
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director

BOARD COMMITTEES
 CORPORATE RISK
AUDIT MANAGEMEN
SOCIAL
T AND
COMMITT RESPONSIBI- SUSTAINABIL
EE LITY IY INITIATIVE

STAKEHOL-
DERS NOMINATION
RELATIONS AND
-HIP REMUNERATI
COMMITTE ON
E

AUDIT COMMITTEE

Mr. P. R. Ramesh Chairman

Mr. R.V. Kanoria Member
Ms. Alpana Parida Member

STAKEHOLDERS RELATIONSHIP COMMITTEE

Mr. R.V. Kanoria Chairman

Ms. Alpana Parida Member
Ms. Svetlana Boldina Member

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

 Dr. Swati A. Piramal Chairperson

Mr. Suresh Narayanan Member

Ms. Anjali Bansal Member

Ms. Svetlana Boldina Member

NOMINATION AND REMUNERATION COMMITTEE

Mr. R.V. Kanoria Chairman

Mr. P. R. Ramesh Member

Ms. Anjali Bansal Member

RISK MANAGEMENT AND SUSTAINABILITY INITIATIVE COMMITTEE

Mr. Suresh Narayanan Chairman

Mr. P R Ramesh Member

Dr. Swati A. Piramal Member

Ms. Svetlana Boldina Member

Ms. Anjali Bansal Member

Geographical Divisional Structure:

Nestlé has transitioned from a complex and decentralized matrix structure to a new
geographic divisional structure.
The organizational structure is designed to focus on geographic regions to drive sustained
profitable growth and agility.

Geographic Divisions:
Nestlé’s India operations are divided into four geographic zones:
North Region: Covering states like Delhi, Punjab, Haryana, Uttar Pradesh, etc.
South Region: Covering states like Tamil Nadu, Karnataka, Kerala, Andhra Pradesh, etc.
East Region: Covering states like West Bengal, Bihar, Jharkhand, Odisha, etc.
West Region: Covering states like Maharashtra, Gujarat, Rajasthan, etc.

Globally Managed Businesses and Joint Ventures:

Certain businesses like Nestlé Health Science and Nespresso are managed globally and
remain separate from the geographical divisions.
Joint ventures like Froneri and Cereal Partners Worldwide also operate independently.

Executive Board:
Nestlé’s Executive Board manages day-to-day operations.
CEO Mark Schneider and 14 Executive and Deputy Executive Vice Presidents lead the
company.
Five Executive Vice Presidents lead the geographic divisions, while others manage
functional groups.
Functional areas include Finance, Operations, Technology, Human Resources, Strategic
Business Units, and more.

Board of Directors:
The Board of Directors supervises the Group, develops long-term strategy, and oversees
sustainability initiatives.
Consists of 15 members, including CEO Mark Schneider and Chairman Paul Bulcke.
Board members bring diverse experience from various industries.

Strategic Focus:
The geographic divisional structure aligns with Nestlé’s strategic goal to achieve
sustained growth and responsiveness to consumer.
1.5 AWARDS AND ACHIEVEMENTS

o NESCAFÉ, MAGGI and KITKAT have been voted as three of India’s 'Buzziest
Brands' in 2016.

o MAGGI won a Gold award in the Food category for its successful campaign on
noodles, which celebrated its relationship with the Indian public over three
decades.

o NESCAFÉ took Gold in the Hot Beverages category, and KITKAT won Silver in
Confectionery.

o Product Quality and Safety Awards: Nestlé products have received numerous
accolades for quality and safety standards. These awards recognize Nestlé's
dedication to maintaining high-quality standards across its product range.

o Sustainability and Corporate Responsibility Awards: Nestlé India has been

acknowledged for its efforts in sustainability and corporate responsibility. Awards
in this category often highlight Nestlé's initiatives in areas such as environmental
conservation, community development, and responsible sourcing.

o Brand Excellence Awards: Nestlé's brands, such as Maggi, Nescafé, and KitKat,
have received recognition for excellence in branding and marketing. These
awards acknowledge Nestlé's success in building strong, trusted brands that
resonate with consumers.

o Industry Recognitions: Nestlé India has been honoured by various industry

bodies and associations for its contributions to the food and beverage sector.
These recognitions may include awards for innovation, product development, and
market leadership.

o Social Impact Awards: Nestlé's initiatives aimed at creating social impact and
addressing societal challenges have been acknowledged through various awards
and honors. These awards highlight Nestlé's commitment to making a positive
difference in the communities it serves.

o Leadership Awards: Executives and leaders within Nestlé India may have
received individual awards and recognition for their contributions to the
company's success and industry leadership.
1.6 SWOT ANALYSIS OF NESTLE

NESTLE’S STRENGTHS

1. Largest Food Company:

With a market capitalization of $330+ Billion, Nestle has been one of the largest food
companies in the world with the sales of its Hot Pockets, Stouffer’s, DiGiorno, and
Nespresso etc.

2. Reputed brand name:

Nestle is the most renowned brand in the world. It has developed a respected reputation
in the food and beverages sector offering high-quality products for everyday use across
the globe.

3. Highly diversified portfolio:

Nestle owns more than 2000 brands globally and renovated over 8000 products. It is one
of the worlds’ biggest companies with the broadest and diverse product portfolio.

4. Large distribution system:

Nestle owns an extensive and diversified distribution system that is not only penetrated in
urban areas but also rural regions. It has adapted local distribution methods and
decentralized approach to run the business efficiently in respective countries. Nestle has
strong relationships with suppliers, retailers, vendors, and distributors.

NESTLE’S WEAKNESSES

1. Increase in prices:

Nestle has increased prices by 6.5% on a certain category of their consumer goods. The
price increase is due to an increase in raw material and transportation costs, supply chain
constraints, and an overall inflationary environment.

2. Span of control and organizational structure:

Nestlé is organized in a matrix structure. That means a large number of brands are under
the same umbrella group which makes it somewhat challenging to manage a large
number of individual brands, which can often result in discord and conflict of interest.

3. Expensive Advertising Model:

Nestlé remains one of the largest advertisers in the world, and its marketing efforts
include television commercials, print advertisements, digital marketing, and sponsorships
of events and sports teams. Despite the size of the brand, Netflix still primarily operates
on a traditional advertising model using channels such as print media as well as television
and radio. While these are effective advertising channels, they also come with higher
customer acquisition costs, meaning that Nestlé spends a significant amount on
advertising. From its financial statements, the company spent about $9.2 billion on
advertising in 2020.

4. Long Litany of Controversies:

Despite their positive reputation, Nestlé is also a company that has been embroiled in a
litany of controversies in numerous regions all around the world. Let’s take a look at
some of the more recent and significant cases of backlash that the company has faced.

The Nestlé Maggi controversy refers to a food safety issue that emerged in India in 2015,
when the popular instant noodle brand Maggi was found to contain excessive levels of
lead and MSG (monosodium glutamate), a flavor enhancer, in some samples. The
controversy caused significant damage to Nestlé’s reputation and business in India. The
company faced multiple lawsuits, investigations, and fines. Nestlé also had to destroy
thousands of tons of Maggi noodles, and its sales and profits took a hit:

NESTLE’S OPPORTUNITIES

1. Venturing small food start-ups:

Nestle has a fantastic opportunity to grow the number of small food start-ups under its
popular brand name. Nestle can also collaborate with the new start-ups to promote its
brand name. In recent years, Nestlé has been actively seeking out partnerships with
innovative startups to drive growth and stay ahead of industry trends. Nestlé has
established several investment funds and programs that are focused on supporting
startups in various stages of growth. For example, Nestlé’s “Nestlé Innovation
Accelerator” program provides funding, mentorship, and other resources to early-stage
startups in the food and beverage industry. Nestlé invested in a number of startups over
the years. Some notable examples include their investment in Blue Bottle Coffee (a high-
end coffee chain).

2. Online shopping:

Nestle has a remarkable opportunity to boost its e-commerce sites and online shopping
platform. A very few CPGs are offering online services to make the shopping experience
more comfortable and pleasant. Although, Nestle has its online stores in a few countries,
expanding its online services to more areas will prove a rewarding decision for the
company. One way Nestlé is expanding its online presence is through partnerships with
major e-commerce platforms such as Amazon, Alibaba, and JD.com. Nestlé is also
investing in its e-commerce platforms

3. Market penetration for breakfast cereals:

Nestlé’s cereals and oats market have shown fast growth in recent years. Thus,
penetrating this market more would be highly lucrative for the company.

4. Expanding ready-to-drink tea and coffee market:

The demand for tea and coffee is continuously on the rise, rendering a profitable
opportunity for Nestle to groom this market more.

5. Partnerships:

Strategic alliances with other food and beverage giants are also a great opportunity for the
company to increase its revenues and profits.

NESTLE’S THREATS

1. Price fluctuations by retail giants:

Nestlé’s grocery sales are achieved majorly through huge retail giants like Walmart,
Tesco, Target, and Kroger. Any reduction or increase in prices by these retailers can
affect Nestlé’s sales and its profitability.

2. Rising competition:
Many CPG companies like Mondelez and Unilever offer similar food and beverage
products. It is hard for Nestle to compete in such a situation where the substitute products
are easily accessible.

3. Government regulations:

Government regulations can affect the business operations of Nestle. Additionally, the
increasing prices of commodities force the company to increase the prices of its products.
It will lead to sales reduction as consumers can switch to other brands which are available
at low costs.

4. Economic Uncertainty:

Even though, Nestlé’s sales were not drastically impacted during the pandemic due to
panic buying catalysed by recent events. The company’s revenue is still threatened by
economic uncertainty and recession in the global markets.

5. Water scarcity:

Nestlé’s production is highly dependent on water usage. Accessing the clean water
through less costly sources has become difficult for the company due to many reasons.
These include increasing population, climate change, growing demand for food and
water, increasing pollution, water wastage, and overexploitation of resources.
 CHAPTER-3

RESEARCH METHODOLOGY

1.1 RESEARCH METHODOLOGY