Nespresso

MASTER COURSE CREATING STRATEGIC ADVANTAGESCourse No.: 269.060Winter Semester 2012/2013

Group Members:Lisa Schacherbauer (0955399)Alexandra Baba (0851997)Arlind Rexhepi (1057883)Ching Yi Mou(1256776)

WHAT NEXT?

Table of content

Introduction

Key factors of Nespresso

Interdependeces between factors

Future strategy scenario

Conclusions

References

Introduction

Rapid growth

High quality

Closed ecosystem

Higher price of the capsules

Special sale strategy

What next?

Brand Image

• “aspirational” brand, it stands for reputation

• Focused on „rich“ customers

• George Clooney as “brand ambassador”

Key Factors for Nespresso’s long-term success(1)

Nespresso isn’t just a coffee…it’s an aspirational lifestyle

Key Factors for Nespresso’s long-term success(2)Price & Quality

• Business model of exclusivity • High price – high quality• You cant buy capsules at common shop

0

30

60 51.71 51.5832.24 25.33

12.95

Espresso

pri

ce p

er

pou

nd

Figure 1: The cost of coffee from single-serve systems, The New York Times, 2012

Key Factors for Nespresso’s long-term success(3)• Seperation from Nestlé

• Different target groups

Mission Statement of Nestlé is… Mission Statement of Nespresso is…

“...positively influence the social

environment in which we operate as

responsible corporate citizens, with

due regard for those environmental

standards and societal aspirations

which improve quality of life” (Nestlé

H., 1857).

“…to become an inspiring growth

partner that delivers creative,

branded food and beverage solutions

enabling operators to innovate, and

delight their consumers”

(www.nestleprofessional.com, 2012).

“…to offer customers the perfect Espresso,

no less” (www.nespresso.com, 1986).

“…a passion for quality, innovation and

service excellence” (McCombs M., 2012).

• Linking profit with the capsules not with the machines

• Different coffe capsules in different flavors and cofeine intensities

Sales strategy

Distribution & Ordering Service

• Ordering via interent, fax telephone

• Call center available 24 hours a day

• More than 200 special Nespresso boutiques

Customer care• Friendly workers in Nespresso

boutiques

• Nespreso Club

• Well catered Homepage

• Call center

Interdependencies between Nespresso’s success factors

Figure 3: Interdependencies of key factors

FUTURE STRATEGY – SCENARIO

• Fighting in two fronts by:• Strengthen its exclusive image• Lanunching a new autonomous brand

• Recollect its noble and exclusive reputation and develop it further

• Drawing a parallel between the jewelry and the coffee sector

• Carefully choose the slogans

FUTURE STRATEGY – SCENARIO

• Making people prood nut just with Nespresso capsules, but also with Nespresso accessories such as Nespresso coffe set

• Bonus system for Nespresso Club

• Introducing a bonus system based on number of purchases

• It could simultaneously launch another brand which is kept apart from the brand Nespresso

• Nespresso could sell still classy but cheaper capsules that are compatible with Nespresso coffee machines

• Great job in building up a brand image which stands for exclusivity

• Successful market segmentation by relying on “rich” customers

• The organization has a clear conception of its core competency

• Nespresso has to strengthen its exclusive brand image and fight against the increasing competition

• Introduce a new autonomous brand with cheaper Nespresso capsules, but which have still a higher quality than the ones of the competitors

Conclusions

ReferencesAnderson J., Collins M., Tavassoli N. (2012): Nespresso. What Next?, Antwerp Management School, pp. 1-14 Brooker C. (2007): Nespresso isn’t just a coffee…it’s an aspirational lifestyle marketing exercise by desperate lunatics, The Guardian, November 26th, download date: 27.12.2012http://www.guardian.co.uk/commentisfree/2007/nov/26/drink.comment Grands Crus: download date: 13.01.2013http://www.nespresso.com/#/at/de/nespresso_kaffee/grands_crus Markides C. & Oyon D. (2000): Changing the strategy at Nespresso: An interview with former CEO Jean-Paul Gaillard, in: European Management Journal, Vol. 18 (3), pp. 296-301 McCombs M. (Nespresso customer service management), August 15th, 2012http://www.quora.com/Nespresso/What-is-nespressos-mission-statement Nestlé H., 1857, download date: 6.12.2013http://www.nestle.co.za/aboutus/missionvision#.UOmnGuTAeHg Nestlé Professionals, Company related frequently asked questions, 2012, download date: 6.12.2013http://www.nestleprofessional.com/uk/en/FAQs/Company_related_FAQ/Pages/FAQ_Our_Company_2.aspx?UrlReferrer=https%3a%2f%2fwww.google.at%2f Nestlé loses bid to block rival coffee capsules, August 16th, 2012, The New York Times, download date: 27.12.2012http://www.nytimes.com/2012/08/17/business/nestle-loses-bid-to-prevent-sales-of-rival-coffee-capsules.html?_r=0 Price of Coffee Machines: download date: 13.01.2013 http://www.nespresso.com/#/at/de/kaffeemaschinen/reihe_auswahl/ Strand O. (2012): With coffee, the price of individualism can be high, The New York Times, February 7th, download date: 27.12.2012http://www.nytimes.com/2012/02/08/dining/single-serve-coffee-brewers-make-convenience-costly.html?_r=0Figure 1: The cost of coffee from single-serve systems, The New York Times, February 7th, 2012, download date: 27.12.2012http://www.nytimes.com/interactive/2012/02/08/dining/the-cost-of-coffee-from-single-serve-systems.html The Coffee Revolution, p. 71, download date: 6.12.2013http://www1.nespresso.com/precom/nmag/8/pdfs/en/nm8i_68_75_E.pdf The cult of Nespresso, October 4th, 2007, Independent.ie, download date: 27.12.2012http://www.independent.ie/lifestyle/food-drink/the-cult-of-nespresso-1115935.html