Nestle Australia Limited

MD FAIZ
ID#30324947
Introduction/History
 Introduction/History (cont’d)
At a Glance
Total Sales: 2018: CHF 91.4 billion (AUD137 billion) (2017: CHF 89.6 billion)

Employees: About 308,000 in over 190 countries

Factories: Over 450 factories in more than 86 countries

Nestlé has more than 250,000 shareholders worldwide (42% Swiss, 22% US Citizens, 10% British, 8% French and 5% German)

Nestlé has divided its worldwide operations into three zones
Europe, Middle
Americas
Asia, Oceania and 1 CHF= 1.50 AUD

East, North Africa sub-Saharan Africa

• Sales: CHF 41.0 • Sales: CHF 26.9 • Sales: CHF 23.5

billion billion billion
• Employees: 33.9% • Employees: 34.1% • Employees: 32.0%
• Factories: 159 • Factories: 146 • Factories: 138

At a Glance Nestle Australia

 Part of Nestlé Oceania region of Nestlé S.A.
 Nestlé registered its first trademark in Oceania in New Zealand in 1885, and opened its first office in Australia in Sydney in 1908.
 Nestlé Australia Ltd: Ranked 196 out of the top 2000 companies in Australia.
 Total Revenue: $2.27 billion (2018)
 Employees: 4415 employees (2018) Source: Annual Report-2018
 Nestlé Australia Ltd
Sales and Profit (2013-2018)
Products
2500
 Nescafe & Nescafe  Butter-Menthol
Dolce Gusto
 Nestle Professional 2000
 Nespresso
 Sustagen
 Nesquik 1500
 Optifast
 Uncle Tobys -
 Bakers' Choice
Cheerios, oats, snacks 1000
and plus  Plaistowe
 Maggi  Nestle Health Science 500
 Carnation  NAN 
 Milo  Cerelac 0
2013 2014 2015 2016 2017 2018
 KitKat  Purina - Felix,
Supercoat, and One.
 Allen's
 BioGaia
 Quick-Eze Sales Profit(Before Tax))
 Chocolate and Confectionery Manufacturing in Australia
 Mondelez Australia Holdings Pty Ltd (Market Share: 11.2%)
 Wrigley Uno 2 Australia Pty Limited (Market Share: 10.1%)
 Nestle Australia Ltd (Market Share: 8.1%)
 Ferrero Australia Pty Ltd (Market Share: 4.0% - 5.0%)

Prepared Animal and Bird Feed Manufacturing in Australia

 Ridley Corporation Limited (Market Share: 19.1%)
 Wrigley Uno 2 Australia Pty Limited (Market Share: 15.4%)
 VIP Topco Pty Limited (Market Share: 9.9%)
 Nestle Australia Ltd (Market Share: 7.9%)
 Riverina (Australia) Pty Ltd (Market Share: 6.3%)
 Ricegrowers Limited (Market Share: 2.0% - 3.0%)
 Nestle Australia’s Contribution in others Industries
 Tea and Coffee Manufacturing in Australia(Share: 16.6%: Total Revenue in 2018: $215.5 million)
 Cereal, Pasta and Baking Mix Manufacturing in Australia(Share: 7.3%: Total Revenue in 2018: $193.3 million
 Confectionery Manufacturing in Australia (Market Share: 28.9%)
 Health Snack Food Production in Australia (Market Share: 2.0% - 3.0%
 Pet Food Production in Australia (Market Share: 18.4%)
 Baby Food Manufacturing in Australia (Market Share: 2.0%)

Research & Development

 Nestle has world's largest food and nutrition research organization, with about
 4,800 people involved in R&D
 corporate venture funds and research partnerships with business partners and universities
 Nestle’s in-house fundamental research takes place in four centres:
 Nestlé Institute of Health Sciences: Biomedical research into personalised science
 Nestlé Research Centre: Product renovation and innovation.
 Clinical Development Unit: Medical expertise and manages clinical trials
 R&D Tours: Scientific expertise in plant science.
Proprietary high-tech product development takes place in our 40 Product Technology centres and R&D centres worldwide.
 Porter’s Five Forces Analysis of the Nestle Australia
 Barriers to Entry: High
 Economics of scale
 High Level of Capital
 Brand identity/loyalty
 Well established distribution channels
 Well established inputs distribution channels

Rivalry among existing Buyer Bargaining Power: Low to

Supplier Bargaining power: competitors: High Medium
Medium  Numerous and diverse rivals
 Large number small buyers
 Large number small  High Fixed Costs
 Easy access to information
suppliers  Low Differentiation
 Limited price sensitive
 Low switching cost for  Low switching costs
 Highly brand loyalty
suppliers’ product  High Brand identity
 Standardized products
 Suppliers serve many firms  High exit barriers 
 Low switching cost
 Medium supplier
Concentration

Threat of Substitutes: Medium to High

 Large number of available substitute
products
 Very low to switching cost
 Medium likelihood of switching to
alternatives due to price increases
 Low buyers propensity to substitute
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Nestle’s Policies and Commitments
Consumers
• Nutrition, Health and wellness
• Quality assurance and product safety
• Consumers communications

Human Rights and labour Practices

• Human right in our business activities

Our People
• Leadership and Personal responsibility
• Safety and health at work

Suppliers and customers

Suppliers and Customer relations
Agriculture and rural development

The Environment
Environmental Sustainability
Water
 Recommendations
 Bringing innovation in the company’s offerings
 Growing the number of start-ups in the food and beverage industry
 Action plan for increasing market share of Baby food
 Upgrading its online services to create a unique competitive advantage in the CPG
 Improving its production and operational procedures.
 Using authentic raw material to avoid outcry from environmental and social activists.
 Settling the media scandals and controversies to stand by with a positive reputation.
 Participating in CSR activities and upholding its sustainability practices.