Nestle Industry Analysis
The confectionary Industry analysis for studying market dynamics for Nestle
Table of Contents
1. History 3
2. Industry Size and Trends 3
2.1. The Distribution Mix 5
2.2. Share of Grocery, Petroconvenience and Route 6
2.3. Export and Import Scenario 6
3. Industry Characteristics 6
4. Porters 5 forces 7
4.1. Threat of new entrants 7
4.2. Industry rivalry 7
4.3. Threat of substitutes 8
4.4. Bagaining power of Buyers 8
4.5. Bargaining Power of suppliers 8
5. Confectionary industry Threats 8
6. Confectionary industry Opportunities 11
7. References 11
1. History
* The confectionary originated thousands of years ago, when Hippocrates used sweets as medium to propagate his medicine pre 400 BC. * In 1600’s cocoa bean was discovered in South America by the Spanish .It then became a luxury product for the consumption of the elite in Europe. * The first chocolate house was opened in London in 1657. In Europe, Nestle was founded in 1867.John Cadbury started making chocolate in England in 1831. * James Stedman was the first in Australia to set up a small confectionary factory in 1874. Nestle began its food operation in Australia in 1908. Allen’s brand goes back to 1891 and Life Savers to 1921. Mac Robertson introduced the Mars products in the late 1950’s. * A series of take overs and mergers took place as business sought economies of scale. In the 1980’s, the Australian market became a transnational market from a national one. After acquiring local firm Life Savers and Allens in 1985 and Rowntree Mackintosh globally- Nestle Confectionary Ltd in 1991. This move was to bring all brands under one banner. During 1990’s Multinationals-7.5% of the Australian Confectionary industry. * In Oct 2008, Mars Inc. Purchased Wm Wrigley Jr and thus became world’s biggest confectionary manufacturer. Although in Australia, they operate separately, Mars is Mars- responsible for chocolate and Wrigley Company for sugar confectionary and gum
Table of Contents
1. History 3
2. Industry Size and Trends 3
2.1. The Distribution Mix 5
2.2. Share of Grocery, Petroconvenience and Route 6
2.3. Export and Import Scenario 6
3. Industry Characteristics 6
4. Porters 5 forces 7
4.1. Threat of new entrants 7
4.2. Industry rivalry 7
4.3. Threat of substitutes 8
4.4. Bagaining power of Buyers 8
4.5. Bargaining Power of suppliers 8
5. Confectionary industry Threats 8
6. Confectionary industry Opportunities 11
7. References 11
1. History
* The confectionary originated thousands of years ago, when Hippocrates used sweets as medium to propagate his medicine pre 400 BC. * In 1600’s cocoa bean was discovered in South America by the Spanish .It then became a luxury product for the consumption of the elite in Europe. * The first chocolate house was opened in London in 1657. In Europe, Nestle was founded in 1867.John Cadbury started making chocolate in England in 1831. * James Stedman was the first in Australia to set up a small confectionary factory in 1874. Nestle began its food operation in Australia in 1908. Allen’s brand goes back to 1891 and Life Savers to 1921. Mac Robertson introduced the Mars products in the late 1950’s. * A series of take overs and mergers took place as business sought economies of scale. In the 1980’s, the Australian market became a transnational market from a national one. After acquiring local firm Life Savers and Allens in 1985 and Rowntree Mackintosh globally- Nestle Confectionary Ltd in 1991. This move was to bring all brands under one banner. During 1990’s Multinationals-7.5% of the Australian Confectionary industry. * In Oct 2008, Mars Inc. Purchased Wm Wrigley Jr and thus became world’s biggest confectionary manufacturer. Although in Australia, they operate separately, Mars is Mars- responsible for chocolate and Wrigley Company for sugar confectionary and gum
References: * Hubbard, Rice and Beamish (2008) “Strategic management”, Prentice Hall, chapter 3, Analysing the environment.