2.2 Major Challenges Over the Next Five Years (i) Emerging of Strong Competitors
A new company, Jacobs Douwe Egberts, is formed as a result of the combination of D.E. Master Blenders and Mondelēz International which originally named Kraft Foods Inc. (Boyle, 2014) Based on data prepared by Bloomberg, it is the largest in an industry that has rapidly consolidated over the past five years, with higher than one hundred deals worth about $23 billion. (Boyle, 2014) Euromonitor showed that the combined entity with profit of $7300 million from brands such as Jacobs, Carte Noire, Douwe Egberts, and Senseo will control 16.3 % of global coffee sales to Nestlé’s 22.7 %. (Boyle, 2014) For example, through measuring the volume of coffee sold by Nestlé and the new company, they will be having even bigger numbers of sales volume than Nestlé. (Boyle, 2014)
Moreover, according to Jonny Forsyth, an analyst at Mintel, he indicated that Nestlé’s should be worried about their 50 % share in China will affected by the new company decision on improving its standing in China. (Boyle, 2014) As such, Euromonitor analyst Hope Lee stated that Jacobs Douwe Egberts …show more content…
(Askew, 2015) Based on Euromonitor International analyst Lianne van den Bos, India is a second-largest market of Nestle's Maggi brand with retail revenue of US$623m. (Askew, 2015) The loss of this source of income would lead to a "significant hit" to Nestle in the country. (Askew, 2015) This matter could also be a detriment to Nestlé's broader strategy in the Indian market. (Askew, 2015) Besides that, Nestlé will also need to bear the risk that this scandal could spill over into other international markets. (Askew, 2015) For example, when the UK has confirmed it is testing Maggi noodles for lead and MSG, Singapore has already taken action to stop the sale of noodles imported from India to the market. (Askew,
A new company, Jacobs Douwe Egberts, is formed as a result of the combination of D.E. Master Blenders and Mondelēz International which originally named Kraft Foods Inc. (Boyle, 2014) Based on data prepared by Bloomberg, it is the largest in an industry that has rapidly consolidated over the past five years, with higher than one hundred deals worth about $23 billion. (Boyle, 2014) Euromonitor showed that the combined entity with profit of $7300 million from brands such as Jacobs, Carte Noire, Douwe Egberts, and Senseo will control 16.3 % of global coffee sales to Nestlé’s 22.7 %. (Boyle, 2014) For example, through measuring the volume of coffee sold by Nestlé and the new company, they will be having even bigger numbers of sales volume than Nestlé. (Boyle, 2014)
Moreover, according to Jonny Forsyth, an analyst at Mintel, he indicated that Nestlé’s should be worried about their 50 % share in China will affected by the new company decision on improving its standing in China. (Boyle, 2014) As such, Euromonitor analyst Hope Lee stated that Jacobs Douwe Egberts …show more content…
(Askew, 2015) Based on Euromonitor International analyst Lianne van den Bos, India is a second-largest market of Nestle's Maggi brand with retail revenue of US$623m. (Askew, 2015) The loss of this source of income would lead to a "significant hit" to Nestle in the country. (Askew, 2015) This matter could also be a detriment to Nestlé's broader strategy in the Indian market. (Askew, 2015) Besides that, Nestlé will also need to bear the risk that this scandal could spill over into other international markets. (Askew, 2015) For example, when the UK has confirmed it is testing Maggi noodles for lead and MSG, Singapore has already taken action to stop the sale of noodles imported from India to the market. (Askew,