Analysis of the Nespresso Strategy Essay

3711 Words Apr 18th, 2013 15 Pages

Analysis of the Nespresso strategy

Content | Page | Introduction | 3 | | | Defining the industry | 3 | | | Analyzing the industry | 3 | | | Core competences of Nespresso | 4 | | | The implementation of the Nespresso business model | 5 | | | Protecting the Competitive Advantage | 5 | | | The target group of Nespresso | 5 | | | Value creation through the Nespresso marketing approach | 6 | | | Practicing the corporate social responsibility in the Nespresso strategy | 7 | | | The importance of the strong relationship with the suppliers | 7 | | | Results from the strategy | 8 | | | Future threats and conclusions | 8 | |
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Firstly, the coffee company has a great advantage because of the positive impact from the brand under which it operates – Nestle. Secondly Nespresso, being a separate entity from Nestle, has the freedom to move faster and be innovative, which is one of the biggest problems amongst companies which are part of large corporations. Using these two factors, the company formulates a strategy which gives it constant revenue. They achieved innovation with their business model which consists of coffee machines which can be used only with Nespresso capsules. Consequently, once a customer became a part of this circle he/she periodically uses the products of Nespresso, which gives the company a constant cash flow (Doorneweert, 2011). This is an influential Economic driver to its sustainable success. In order to make this business model successful and to use it as their competitive advantage, the company takes different approaches, which will be described in this report.
The implementation of the Nespresso business model
Part of Nespresso’s strategy is the implementation of their business model. In this competitive industry it is really important not to be crushed by the competitors on the first step. In this fight Nespresso used the approach of testing a new product

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