In this mature market which is the coffee, the Nespresso brand has demonstrated innovation through its 1700 patents, and has positioned in the category of premium coffee with his machines and capsules; by establishing a monopoly. But faced with the loss of one of its patents this year, Nespresso is it capable to maintain its advance, and its leadership?
Nespresso is a Nestle subsidiary, created in 1970 originated in Switzerland, which is positioned in two strategic business areas:
- The coffee capsule
- And espresso machines.
Nespresso has a policy of price skimming by differentiating the high end. The brand has a significant reputation and an extremely strong brand image.
The brand has to face a broad competition, because the coffee market pre measured is booming, with 40% growth each year while the ground coffee decreases of 3% per year. Coffee has become an essential consumer product. And despite the crisis and the price of coffee rising, consumers are looking for quality and authenticity. Well understood by Nespresso.
[...] and Chinese market: The USA is the largest consumers of coffee in the world, so therefore represents an attractive market for Nespresso; the problem is that Americans do not consume coffee in the same way as Europeans. Starbucks is already very well established in the U.S. market and satisfied with the "gourmet coffee". China is also a very interesting market for Nespresso, because they are very keen of western products, but drink coffee for a very short time, but represents an attractive target for looking for high quality coffee. Nespresso will overcome the consumption habits of Chinese tea. [...]
[...] Nespresso has also surfed on trends in "gourmet coffee" by diversifying coffee available: cappuccino etc . Nespresso in Europe communicates via its muse George Clooney who represents the image of high quality brand, but the actor declined the offer to represent Nespresso USA, the brand to to succeed its implementation in the U.S. market should rethink its communications strategy specifically for the USA, which is very expensive. • Environmental factor Nespresso produces: aluminium capsules recyclable but not biodegradable, which earned him many critics to face pods fully biodegradable. [...]
[...] But with the loss of patent Nespresso, brands want to take market share from Nespresso, which allows competitors to take advantage of installed generating their own capsules or capsules adaptable to Nespresso machines. To analyze Nespresso's competitive advantage, we need to identify Nespresso's resources which are difficult to analyze because imprecise. The main strategies of Nespresso were innovation and pursuit of excellence with its many partnerships with luxury services, such as airlines but also the major industrial groups, in order to share their skills and knowledge; like Krups, Siemens, Miele and Magimix. This allowed Nespresso to be more competitive and gain market share. [...]
[...] Well understood by Nespresso. Regarding the Nespresso Case, how the brand will manage the loss of its main patent and face virulent competition? But the brand is struggling to establish itself in the U.S, however which represent a very lucrative market for the brand because it is the largest importer of coffee. Can Nespresso face the seasonality problem of coffee, which is drunk more in winter? Opportunities and threats Since the 1970s and the creation of the patented Nespresso capsules, the services of “Research and development” of the brand are very active and efficient, especially with their 1700 patents. [...]
[...] Illy also has launched on the pods. U.S. giant Starbucks has launched a partnership to promote the Tassimo pods and also wants to be part of the market for the brand announced its intention to extend its partnership with Green Mountain Roasters coffee, to sell the Starbucks pods. - In the consumer sector: Casino produces cheaper capsules compatible with Nespresso machines Substitutes Every day out of 3 people drink coffee in the world. But in the coffee market, there are many products that can substitute the capsules, as coffee pods which is the real competitor of the capsule because there are cheaper and fully biodegradable or soluble coffee and coffee beans. [...]
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