Nestle Refrigerated Foods: Contadina Pasta and Pizza (A) Case Study Help

Introduction:

A wholly-ownedsubsidiary of Nestle – NRFC, was located in California. In the year 1993; Nestle was one of the leading food companies around the world,with more than $37 billion sales, 500 plants and a workforce of approximately 195,000 people in around 60 countries. Despite the dependency of Nestle over milk and infant formula; it significantly expanded into food products,pet foods, mineral water, ice-cream, and refrigerated and frozen food products. The purchase of Carnation Co. allowed Nestle to operate as a major food force in the year 1985. In 1991, the combination of existing operations of Nestle with Carnation, led to the formation of Nestle USA, which was mainly based on five units. Thus, NFRC became the part of Nestle Frozen, Refrigerated, and Ice-cream Company. (Rangan, 1995)

Problem Statement:

Due to a significant increase in sales and rapid growth; the sales had represented a substantial growth to approximately $100 million by the year 1990. Based on the entrance of new competitors in the market niche;the threat of competition is increasing because of which Nestle is looking for new growth opportunitiesin orderto remain competitive in the market. Thus, the major issues are based on the decision over the launch of refrigerated pizza products in the US market.

Analysis:

SWOT

Strength–Nestle was one of the leading food organizations that operatedat theglobal level. It hada large workforce. The acquisition of Contadina had been successful,which led towards a significant increase in sales and made Contadina – the market leader in refrigerated pasta and sauces. Nestle had the first-mover advantage in the refrigeration food offering. It used broker distribution services despitethe traditional sales force.

Weakness –Due to an increased competition;the future growth of the organization is not ensured. The demand fora 30-day shelf-life of refrigerated products,provides the organization with limited time for production, shipment, and delivery of products due to the shorter purchase cycle of refrigerated foods. The investment for market support is quite higher i.e. around $18 million.

Opportunities – An increased awareness of refrigerated productswould lead towards an increased number of sales. Customer satisfaction and improved experience would lead towardsthe development of consumer loyalty. The ability of the organization to introduce internationally accepted pizza flavors would lead it towards a successful business expansion.

Threats – The inability of the organization to benefit from market opportunity and gain market share in the ethnic food category in theUS would endanger the potential growth. The threat of competition is quite high,which might result in the loss of first-mover’sadvantage. Loss in sales and decreased interest of customers could result infinancial instability………………………………

 

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