Nestle A Social Media Nightmare Harvard Case Study Solution

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Nestle A Social Media Nightmare Case Study Solution and Analysis


Nestle A Social Media Nightmare Case Study Solution is a widely known global brand name in innovation industry, founded in 1938 by Lee Byung Chul, in South Korea. Nestle A Social Media Nightmare handle a great deal of product categories including Semiconductors, Telecommunications, Digital Media, Digital Appliances and much more other electronic items. Historically, the business's core clients consist of the Original Equipment Manufacturers (OEMs), which used to offer Enterprise items withtheir own trademark name. Till early 1990s, the core proficiency of Organization depend on its low price offerings than its rivals by making existing products at economies of scale. Its customer circle consists of Original Equipment Manufacturers (OEMs), who used to offer Nestle A Social Media Nightmare Case Study Solution products with their own trademark name. Org was not merely understood outside Korea. There were also no or little interest in developing the trademark name globally. Marketing spending plan was managed by production department with a focal point on offering cheap products.During the 1997 Asian Financial Crisis the business nearly got bankrupt, however with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was noted the top 25 most valuable business worldwide. When Kim was hired as a Chief Marketing Officer in 2000 the company was not even noted. He repositioned Organization as a worldwide brand name and informed his divisional managers to understand marketing and its value. Now their objective is to arrive 10 by 2005.

Issue Statement

Enterprise's shift from an item based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional supervisors to integrate marketing successfully is still a major difficulty. Developing a consistent brand name identity throughout the whole world and employing marketing techniques that finest fits the regional culture is no simple task.
Executive Summary
Situational Analysis

Nestle A Social Media Nightmare Case Study Analysis efforts for building its trademark name throughout the world was started after presenting the "brand-new management effort" by Chairman Lee in 1993. The goal was to transform Business from a low-cost OEM to a high value-added item provider. To make the vision of Organization a truth, Chairman Lee designated Yun as a vice chairman in 1997. Yun had a quite clear image in his mind about how Org can change from a low end to a high-end product provider. He knew that transformation can just be done through positioning Corporation as a business offering high-end products and this could only be done through high level of marketing.

In spite of having a clear vision about how to construct Enterprise brand name, with a potential assistance of its executives, Yun dealt with several marketing difficulties in early years of its efforts.

Among the marketing difficulties for Yun was the perceptions of executives about the worth of marketing. They considered marketing and selling as same tools and thought that quality products do not needed marketing for increasing sales. As their focus towards marketing was rather low in their previous company practices, and the current marketing requirement was excessive high, the space was too larger and to fill this gap with incorrect understandings about marketing was quite challenging for Yun.

Along with it the product range of the company was increasing with the ripening of new product concepts by the R&D sector of Company. Yun had a difficulty to carry out marketing preparation and to create marketing spending plans for existing as well as for new products from the very start, and this would take a substantial time.

A substantial shift would be required in current marketing expenses to develop the Nestle A Social Media Nightmare Case Study Analysis brand name. This would lead to increased marketing expenses for Venture and might interrupt the administration relating to increased expenses, as they were reluctant to marketing expenses previously and an abrupt big shiftwould make them disrupt. This could result in declining executive support for international marketing. In this scenario, Yun deals with a difficulty for validating increased marketing expenditures by demonstrating the long term value of huge marketing expenditures.

Internal Analysis
SWOT Analysis

Nestle A Social Media Nightmare Case Study Help strengths lie in its substantial product portfolio. Organization has biggest number of patents in the market with overall number of 15499 patents given in United States( USP).

Another strength of Nestle A Social Media Nightmare Case Study Analysis is its ability to establish innovative items at a constant rate. It major shows for the innovation and product developing of Corporation is that the business has actually received numerous awards for its innovation and item style.

Unlike Apple and other competitors, Organization is concentrated on producing devices which can be quickly incorporated with any kind of open source Os (OS) and software application. This supplies Organization an edge over Apple gadgets.
Porter's 5 Forces Analysis
Business's ability to produce high end items at low cost of production is also one of the major strength of Business as it enables the business to capture more market by offering quality products with expense control.

Weak points

Organization's weaknesses are hidden in the business's dependence on outsourcing software for its gadgets due to business's inability in establishing software application, unlike Sony. Nestle A Social Media Nightmare Case Study Help likewise has low revenue margins as compare to Apple due to big difference in the prices of Apple and Business with a much lower distinction in quality.


Opportunities for Nestle A Social Media Nightmare Case Study Solution lie in the growing Smartphone market and the company's efficiency in the market. Enterprise currently runs in about 80 countries and the business has a chance to increase its geographical growth by moving towards more emerging markets outside Asia.


The dynamic market environment of technology market pose a severe danger on Company's survival and require the company to invest much of its profits share on R&D in order to survive in the long run. The market saturation in industrialized nations i.e. saturation of mobile business is likewise a big danger for the company's growth in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis

Organization uses quality items and has a quite abundant portfolio which caters to different sections. LCD and mobile phones are the biggest products of Venture, whereas DRAM is also not far behind in comparison of them.

• Laptops.
• Cellphone.
• Air conditioner.
• Desktop computer.
• Disk drives.
• Washing machines.
• Fridges.
• Electronic cameras.
• Microwaves.
• Flash memory.


Nestle A Social Media Nightmare Case Study Analysis uses both market competitive and market skimming pricing techniques for its wide array of products. In competitive rates it changes the cost according to the competition in order to get advantage, whereas, it utilizes market skimming strategy where the item has an added worth and by offering a few items it can reach break-even.


It has one of the very best supply chain networks, with retail distributors, their own sole distributors, E commerce channels like Amazon etc. All its products are timely provided to the selling location/ delivered to the clients directly in case of online order.

Vrio Analysis
It uses both offline & online channels of promotion to market their items. Paid product ads, social promotion and digital advertisements are uses to produce awareness about Enterprise items.

Worth Chain Analysis.

It's an analytical structure for determining business activities that include worth or competitive advantage for the business.

Inbound Logistics.

For its inbound logistics it owns different logistics companies as it subsidiaries. It looks after its providers and creates an unified relationship with them and even reduced their payment cycles to enhance this relationship further which includes value to their chain network.


Company's core proficiency is its mass making it produces 90% of its products in-house. Divided into three various divisions its operations are namely IT & Mobile Communications, Gadget Solutions and Consumer Electronic Devices. It is keeping operation centers worldwide to further include value to its value chain network.

Outbound Logistics.

Its outgoing logistics system efficiency is one of the main factors Nestle A Social Media Nightmare Case Study Analysis has the ability to compete with Apple. Organization's own Electronic Logitec system plays a major function in the outgoing logistics operations. It even carries out the tasks of collection of payment, settling insurance claims, etc. on behalf of Company.

Marketing and Sales.

Bring in target customer attention towards the item is done through marketing and sales to communicate with them the value and competitive advantage the item uses. Nestle A Social Media Nightmare Case Study Solution marketing budget is continuously on the rise given that they began their repositioning globally and will continue to do so as they are continuously seeking to invest and broaden in high possible development markets. The budget plan is spent on events, print and media advertisements, public relations etc.

Enterprise Service. Org put their customers at the top and continually strive to provide unmatchable customer support requirements. As after sales service is becoming very essential to keep customers delighted and engaged, they even perform studies through 3rd parties to learn their customer's feedback and implement it in the favorable way to lower or if possible totally remove their consumer concerns. By adding a direct support line to contact them 24 hr they have further increased the added worth of Nestle A Social Media Nightmare Case Study Solution service.


Nestle A Social Media Nightmare Case Study Analysis has actually diversified market segmentation, based upon its arrangement of large range of products to large number of customers. Org target customer segments can be divided into 3 categories i.e. Nestle A Social Media Nightmare Case Study Analysis IT and Mobile Communications, Corporation Customer Electronic Devices and Org Gadget services.


Nestle A Social Media Nightmare Case Study Analysis geographical division is based upon two requirements i.e. area and density. Organization serves about 80 nations worldwide with its items provided to Urban as well as Backwoods of the country. The Organization is also growing its international presence and the company's flexibility in finding its plants motivates worldwide growth of Business.


Company produces items that can be used by both females and males. The target customers for Corp IT and mobile communication products have an age variety of 18-65 with majority at a young or newly married life cycle phase. Apart from it, Business Customer Electronic devices are targeted to a client section with an age range of 25-65.


The psychographic division of Nestle A Social Media Nightmare Case Study Solution s based upon the social class and the lifestyle of the consumer. Business target consumers on the basis of social class are mainly upper middle, middle and working class customers, as Venture sell products like cellular phone very little less expensive i.e. Motorola in addition to not much costly i.e. Apple. It provides quality products to middle level customers at a somewhat high rate than others targeting the very same section.


Nestle A Social Media Nightmare Case Study Analysis majority target consumers have special behavioural qualities. They are brought in towards Org due to the fact that of its moderate costs with a degree of quality.

Quantitative analysis.

Sales of Nestle A Social Media Nightmare Case Study Help has actually increased amazingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. Digital media is the largest selling classification of Corporation with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Whereas, the core strength of the company is presently manufacturing but long gone are those days when great items were offering themselves. Kim has currently started to reinforce the marketing activities of Enterprise and very quickly it will become one of its core strength like manufacturing if not better.



Corporation runs styles, makes and offer a vast portfolio of customer electronic devices. It operates in a very competitive environment and has actually effectively placed itself as the maker of quality products. So, the answer is yes.


As, stated earlier that Nestle A Social Media Nightmare Case Study Help operates in an extremely competitive environment, which implies all the business have comparable items. The response for rarity is no.


Due to the nature of the industry, it is extremely easy for competitors to comprehend the performance of the products and quickly make their own models. Yes, Company is only behind IBM in registering brand-new patents yearly, but the benefit is extremely short term in this market.


Chairman Lee has completely turn-around Business, from going almost insolvent throughout the Asian monetary crisis of 1997 to the top 25 business in the world. Definitely yes there appertains organization in the company and the results promote themselves.

External Ecological Analysis

PESTLE Analysis


Being a multinational brand spread nearly in every nation worldwide, majority of the environments like USA, Europe, China etc., are extremely conductive for its operations. However, it faces some political pressures in less developed nations where order scenario is not good. Latin American, African and some Asian nations fall in this classification, where political instability do have an effect on Nestle A Social Media Nightmare Case Study Analysis operations.


Buying power of customers is important for companies like Corp to grow and be successful. Emerging markets like India, middle-eastern countries and so on offer growth chances, whereas, due to recession even the customers of industrialized countries suffer badly. It is really essential for the company to keep an eye on the continuous economic scenario of the nation prior to going into the market.


Multinational companies have to deal with different social and cultural concerns throughout its operations in a foreign country. Business has likewise dealt with numerous issues however have actually embraced to the local environments of the majority of the countries remarkably well. It has actually customized its items, practices, policies and so on accordingly in order to achieve success.


With an annual expense of 2.4 billion dollars in Research study & Advancement, and with consistent innovative item launches, Nestle A Social Media Nightmare Case Study Solution is one of the top ingenious business of the world. With a clear mission to be ahead of the rest when it concerns technological improvements, Org has risen to the no 25 of the top successful companies of the world.


Each nation has their own laws and policies, being an international business Org need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to major legal consequences. So, it has to study or work with a local law expert prior to beginning its operations in a particular country.


With the rising awareness among consumers about the environmental & ethical offenses of companies, Corp has to ensure that it follows all the safety guidelines. Environmental damages, ethical misbehaviors are not acceptable and in some countries the consequences can be very severe. On the other hand it has to do some Corporate Social Obligation practices to reveal the residents that it cares about their environment and people.

Porter's 5 Forces

Threat of Replacement

Threat of alternative for Company's each product category is rather considerable. Running in an exceptionally vibrant industry lead the company to deal with a high risk of replacement. Factors for high threat of alternative for Nestle A Social Media Nightmare Case Study Solution Smart device consist of the presence of high variety of suppliers and Market saturation in developed nations, which make the cost of changing for customers nearly zero. Replacement dangers for Organization visual screen lie in the changing lifestyle of clients. Consumers can switch to viewing visuals at home towards outside activities. Together with it, Company printing options products are threatened by the increasing destination of customers towards cloud storage.

Rivalry Among Existing Firms:

The rivaly amongst Company and its close rivals is intense. The significant factor behind this is the method of market saturation in numerous number of product categories, requiring Corporation to introduce more innovative features in existing products and brand-new innovative products to keep its development. The significant rivals for Nestle A Social Media Nightmare Case Study Solution samrtphones include Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.

( Business Sustainability Report, 2016) Provider's bargaining power for Corporation is low as Corp runs economies of scale and its orders are of prospective size and worth. Due to incapability of Nestle A Social Media Nightmare Case Study Help to construct its own software, it has to outsource its software application development to Google, which ends up being a potential provider of software for Venture, resulting in high bargaining power of Google.

Bargaining Power of Purchasers:

Market saturation in many of the product categories also make the bargaining power of purchasers more extreme in for Corporation. In spite of igh bargaining power Org is quite capable of selling its items at a higher price than much of its rivals, due to high end quality product and a reasonable brand name image.

Threat of New Entrants:

Danger of new entrants for Company is quite low. One of the significant factor for low threat of brand-new entrants is the high competitors in the industry. The requirement of big amount of capital to go into in the marketplace is also among the potential barrier to entry. Along with it, requirement of substantial proficiency and research study and advancement expenditures for survival in the market also make brand-new entrants unwilling to enter in the marketplace. Market saturation is likewise among the barrier of entry in technology market. High bargaining power of suppliers force the players in the industry to charge as low rates as possible and this can only be attained by production efficiency. Brand-new firms, in bulk cases, do not have the production efficiency, thus increasing the risks for entryway in the technology market.

Competitive Analysis

Org's high product diversification provides it distinction from its rivals. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus bulk on a single product classification with Sony focusing on consumer electronic devices, Nokia on cell phones and Intel on chips, Nestle A Social Media Nightmare Case Study Help had a huge R&D spending on all of its item classifications which enable the business to earn prospective income from sales of practically all of its products.

The company ranks first in 4 product classifications i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave, in regards to international market share, amongst 8 various item classifications. Business was the worldwide leader in producing DRAM, SRAM and NAND flash chips. Business profits from chips was less than Intel but its earnings from chips was growing faster than Intel and has grown close to the revenue levels of Intel, as given in the case Exhibit 2.

Along with the chips Venture mobile market was also flourishing at a high rate than its competitors i.e. Motorola and Nokia. Venture's mobile phone's sales growth was 51% as compare to Motorola with only 4% and Nokia with no sales growth. The significant reson behind Venture's high growth despite of greater costs than Nokia and Motorola was the company's high-end quality cell phones.

Company was likewise profiting from increasing market share of high-end LCDs as given in case Exhibition 3. The major factor, making the business make it possible for to obtain the chance is its mass production at low cost. Sony was the biggest competitor for Nestle A Social Media Nightmare Case Study Help in LCD market, however, it had actually likewise started joint endeavor with Corp in 2003 for LCD making, minimizing the competitors for Organization.

Porter's Competitive Strategy

Low Expense Management method of porter is totally implemented by Corp the way they achieve economies of scale by enhancing their core proficiencies of manufacturing. Even to the point that their competitor SONY decided to form an alliance with them to manufacture for them, since they were unable to take on them on low expense. Differentiation is another strategy well implemented by Enterprise by constant investment in the R&D and remaining ahead of the competition. They always bring something ingenious and brand-new whether it's an item or a service.


Alternative Service 1

The Chief Marketing Officer (CMO) of Nestle A Social Media Nightmare Case Study Solution would develop a new brand name image by targeting the younger generation of the particular country. As, especially smart phones of Corporation are preferred amongst the younger market.


1. It is the very best strategy to develop Client Lifetime Worth (CLV) by producing a long-lasting relationship with customers. Develop commitment through providing worth and reap the benefits for long-term, as research study has showed it is more affordable to retain present clients than to draw in new ones.
2. Another pro of this option is that word of mouth spread faster amongst more youthful individuals and which in turn will bring in new consumers for my items.


1. Old consumers who were connected with Venture before may not like this new image the company is attempting to depict.
2 It will sustain further expenditures to reposition some items and it might not even bring success as the patterns alter really rapidly amongst the younger group.

Alternative solution 2.

Venture has made making its core proficiency for the many part of their service and due to which its managers are not scared to completely get out of their comfort zone. It would be done by setting up training workshops throughout which importance of marketing will be taught and numbers will be provided. Failure to get the passing scores will get benched. Marketing environment should be produced internally initially as genuine marketing starts inside the corporation.


1. Its pro will be that all the marketing method advocates will come out and likewise the opposite ones.


2. Its con can create a very unhealthy environment in the office, as people typically withstand modification since they fear it.

Recognize the best option

Option is the best as it plainly has more pros since once a Client Lifetime Worth is constructed the business will profit from it till that client is alive and has buying power. Plus, our target clients are the younger generation which are bound to live longer than the existing aging individuals. Business's main objective is to create commitment among its customers and make them repurchase it from them and even buy their various products.

Implementation Strategy

• Targeting more youthful generation through social marketing, developing a link with them like Pepsi do with music. And set the expectations realistic and possible.
• A group including best marketing and sales professionals need to be put together, and both views must be taken into account prior to securing the resources needed to execute the plan.
• Thorough communication of the plan must be done as it is extremely crucial for everybody to be on the very same page to make it work.
• Tasks and timelines need to be construct and interacted appropriately to each person responsible.
• The supervisor should use a dashboard which shows the progress of all the tasks which have been done or about to be done and by whom.
• The manager ought to monitor and keep a constant look at the total and individual efficiency.
Due to the fact that any new trend or policy might come in due to which all the things already planned have actually to be changed, • Everybody ought to be willing to adjust midway. It's better to have contingency plans already prepared.
• At the end of the project the supervisor need to communicate the results and if successful must celebrate with the group.

Spending plan

This change the spending plan allowance of different nations and many supervisors were dissatisfied and argued but the analysis done by the program was precise and revealed figures like North America and Russia growth possible merited a 35% allowance while they were getting 45%. It really helped to fairly distribute the resources and catch more consumers by spending more on ads on the high growth capacity areas of the world.

Its constant financial investment in R&D and ingenious practices have moved them to new heights but for them its' only the start and they desire to be amongst the top 3 brands in the world. Their marketing efforts ought to be directed towards more youthful group amidst the internal arguments about marketing and ought to produce Consumer Life time Value as it will not only give them advantages now however will continue to reap it till the customer lifetime. As the cost of keeping the client is much less expensive than bring in a brand-new one.