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Introduction

Nestle is a leading food business with its headquarters in Switzerland. The brand was established in 1886 and has a global operation. The company owns more than 2000 brands across 188 countries and employs 275,000 people (Nestle 2023). The company is trying to introduce new product lines like plant based meat and dairy products to attract the environmentally and health conscious consumers. In New Zealand, there is a strong market for such products, however, there are also significant barriers and risks within the sector related to competition, supply chain disruptions, regulatory needs and price sensitivity. It is important for businesses to be innovative, sustainable and be able to understand and respond to the health and wellness trend among the customers. The market segment has characteristics like significant power of suppliers and customers, strong threats of new entry, strong rivalry in the industry and danger of replacements. The aim of this report is to outline strategic recommendations that can be useful for Nestle to navigate though its challenges and utilize its opportunities more effectively, based on the industry and environment analysis conducted previously. This report can help Nestle to better exploit the identified opportunities and mitigate its risks from threats, thereby ensuring long term sustainability in the market.

Discussion

Based on the key findings from the previous report on the market of plant based dairy alternatives in New Zealand, key insights were identified that were the sources of opportunities and challenges for Nestle. Given below are some strategies that Nestle can use to use their opportunities and address the challenges.

Improving Product Development

In order to maintain a competitive advantage in the market, continuous research should be done to develop new products and improve the variety, taste and texture of existing ones. Considering that products in this industry segment always have high risks of replacement, the continuous research and development would allow quick adaptation. Innovative ideas can help to develop new and attractive alternatives that can have close resemblance with traditional dairy products in terms of texture, taste and color (Granto et al., 2020). The research can focus on how to make the products more appealing and cost effective. Nestle can work with experts in the food industry and chefs to create new products. Cultural practices and local flavors can be incorporated to make the products attuned to the local culture. In a highly competitive rivalry, constant product development and innovation can help to maintain a competitive edge and give unique offerings to the customers. This ability to develop unique and innovative products can help to develop customer loyalty. According to a study done by Nestle, about 40% of customers across the word are switching over to a plant based and healthy diet. The constant research and development for new products will allow Nestle to tap into this large market (Nestle 2023). The collaboration can ensure the expertise from various disciplines to be better applied to make products that are not just tasty but also healthy and have minimal impact on the environment. The company can also leverage its own strengths in research and development to create new products that can meet the market demands.

Leveraging the trend of health and wellness

In the market, there has been a constant and gradual shift in customer expectations and interests about health and wellness (Ali and Ali, 2020). This shift towards a healthy diet has created a strong opportunity for Nestle to enter into the market. One such market segment is the plant based dairy alternatives. Demand for such products is constantly growing in the market, including in New Zealand. Considering that the Plant Based dairy alternatives made by Nestle have been successful in other countries, like China, there are strong opportunities of success of the same product in markets like New Zealand. The company can prioritize the capitalisation of this trend and highlight the health and nutritional benefits of the new line of products. An important aspect that drives the demand for plant based dairy alternatives is the potential advantage to health compared to the traditional dairy products. Since the plant based dairy alternatives have lesser quantities of cholesterol and unhealthy fats, it aligns easily with the trend of healthy diet and wellness. It is important for Nestle to not only work towards changing the perceptions towards plant based dairy alternatives but also invest in continuous research and development to find out ways to constantly improve the nutrition and flavor profile of the products (Kyriakos et al., 2023).

Apart from making new products, it is also important to ensure clear labeling as well. The labeling should be clear and easy to understand and able to convey the nutritional and environmental benefits of the product. The information can have an influence on the purchase decisions of the customers, educate them and establish transparency in terms of how the brand is working towards sustainability (Simmonds et al., 2021).

Sustainable Source and Management of Supply Chain

In a competitive and dynamic market like New Zealand's plant based dairy alternative sector, one of the most important factors is to have a stable and reliable supply chain and supplier partnership. The modern market can be prone to disruptions due to socio-economic, political or environmental conditions. It is therefore necessary to have a stable and resilient supply chain that can withstand the occasional disruptions .

Sustainable sourcing is a vital aspect in this regard that ensures the supplying consistent and adherence to ethical codes. Ethical sourcing of materials is a concern of growing importance among consumers, especially those who are health and environment conscious. Brands that can ensure ethical sourcing of materials can gain the trust and confidence of such customers. Connections can be developed with multiple suppliers, making the options of sourcing more diverse and ensuring the sourcing is done in a responsible manner. This can reduce the vulnerability of the company to the disruptions in the supply chain, maintain effective relations with suppliers and maintain customer trust (Lambrechts 2023). By maintaining flexibility and diversity in the sourcing of materials can also allow Nestle to quickly adapt to market conditions and avoid unexpected fluctuations in the pricing.

Developing end to end supply chain visibility can help to improve supply chain management. A vertical integration can help to make the supply chain more secure. The backwards integration in the supply chain can be achieved through new partnerships and acquisitions with suppliers of raw materials. This will help to ensure more responsible sourcing as it will give greater clarity about supply chain performance, supply chain risks and enhancing supply chain transparency (Kalaiarasan et al., 2022). 

Strong Local Presence

To overcome the local competition in the market it is important for Nestle to establish a local presence based on a local culture. The brand can utilize its marketing capabilities to increase brand awareness locally and develop a brand community that reflects the local culture. This can involve developing local collaborations and engaging local endorsers to attract the audiences and build connection with the local audience. The local presence can also be highlighted in the product in terms of the taste, texture and packaging. This will allow the products to be redefined as per the local taste and style but also reflect local traditions. This will require a constant drive towards quality and thereby meet and exceed the expectations of the customers. This can promote customer loyalty and add to the competitive advantage of the brand (Filmon and Fuste-Forne 2023).

A local presence will help to establish cultural relevance of the brand and better tailor the products to the local dietary habits of the local population. matching the preferences of the local customers in New Zealand can help to engage and cooperate with the customers. This relation can help to gain real time insights into market trends and customer behavior. Important market decisions can be informed by this information and necessary adaptations can be made to enhance the outcomes of its marketing programs (Godal 2021).

Highlight Environmental Commitment

Nestle should actively highlight the various environmental advantages and benefits of its products as a part of the product information. Customers in New Zealand are placing increasing priorities to environmental sustainability, as seen from the previous report (self). As a result there are growing numbers of customers who are willing to make purchases based on the environmental impact of the brand or the product. By highlighting the eco-friendliness of the plant based dairy alternatives as well as the wider product ranges can align the product with the preference of the customer and make the product more attractive. Sharing the information can help to establish a point of competitive differentiation that can set Nestle apart from its other competitors. By emphasizing how the product is environmentally friendly and helps to conserve water and resources, can set the brand apart from its rivals (Hia 2021).

New Zealand has a strong regulatory requirement that places strong focus on sustainability and environment. Advertising the eco friendliness of the products can show a constant commitment of the company to meet those regulatory frameworks and expectations. Adhering to those codes can therefore help to avoid any legal risks related to environmental impact and gain the trust of the local governance. Furthermore, by adhering to these codes, Neselt will also ensure adherence to a moral code of conduct that resonates within its customer base as well (Salahzadeh et al., 2023).

Balancing Price and Value

From the previous study it was found that customers in New Zealand tend to be sensitive towards fluctuations in price and quality. Thus it is vital that a balance between the price and value/quality of the products be established and thereby maintained for each product to ensure consistency. Diversity of the products can be increased to increase the spectrum of target customers who have different price and quality sensitivity. Categories can be made like economical and premium to highlight the price and quality advantage and target the customers accordingly. The pricing should be maintained in a transparent manner that communicates clearly the factors that add to the pricing (Heydari et al. 2021). Value can be added by sharing additional information that can add to the customer's knowledge. Apart from health and environmental advantages, the ethical and sourcing information can be shared as well to add value. Strategies like promotional offers, customer reward points, loyalty programs discounts and sales can further attract customers by improving their perceptions on the price and value for the products (Aeny et al., 2019). This can also promote customer satisfaction and customer loyalty.

Ensuring optimal adherence to regulations

Nestle can work on ensuring a proactive compliance to the necessary regulations and laws in New Zealand. A compliance team can be established who will undertake the roles of monitoring and achieving compliance to the necessary standards as per New Zealand Food Safety and Regulations on labeling (Arrick et al., 2019). Regulatory changes can be tracked to ensure continuous updates and the organization can ensure its compliance policies are updated to match the changes. Operational transparency can be a useful approach to ensure better adherence to regulations. It will ensure that all information related to the product (plant based dairy alternatives) are communicated clearly in the labels. This can greatly improve compliance levels for the brand. Moreover, Nestle can directly engage with regulatory bodies and industry societies in the country. This engagement can help Nestle to keep track of the industry standards and regulatory changes. The industry collaboration can help to create initiatives on sustainability, health and wellbeing that can create a wider impact on the health and wellbeing of customers. Furthermore, participation in local discussions and policy meetings can help Nestle share its experience and knowledge in the shaping of the regulatory environment of the country (Allen et al., 2021).

Awareness Campaigns on Sustainability

Nestle can conduct awareness campaigns that can target issues related to sustainability. These campaigns can be developed to educate the customers about the commitment of the company to reduce its environmental impact and support local communities. Focussing on these values, Nestle can have a strong narrative that conveys sustainability values. The campaigns can also create a platform that can show the commitment to quality. Various social media platforms can also be used to generate awareness and engagement with a large range of audiences around the world. The campaigns can include environmental researchers and environmental organizations to collaborate their research data and establish validity of the campaign research materials. Multi modals of using information, like videos, pictures and texts can be used to create learning materials for the campaigns. It should be ensured that the information is conveyed in a simple and yet understandable manner (Soma and Maclaren, 2020).

Addressing a health problem

A useful approach that Nestle can take to gain customer trust is by addressing important health matters. One such health concern is obesity. According to the Ministry of Health, New Zealand, 34.3% of people in New Zealand are obese. The numbers have seen an increase from 2019 at 31.2%. Obesity was found to be more common among pacific islanders (50.8%), maori (31.9%), European (18.5%). People from socioeconomically deprived regions had 1.6 times higher risk of being obese (health.gov.nz, 2023). These data shows how obesity is a preventable issue in New Zealand and the point of public health concern.

Nestle can work towards addressing this public health concern by highlighting how plant based dairy alternatives can help to reduce risks of obesity. Emphasis can be given on aspects like calorie free, cholesterol free, low fat that can ascertain the health benefits and lower risks of obesity. Testimonials from customers can showcase the benefits of the products. The campaigns can be aligned to the trends of wellness and health in the market and support the program for obesity prevention (Magkos et al., 2020). Expert opinions can be used to highlight the benefits of plant based dairy alternatives in this aspect to gain customer trust.

Conclusion

The aim of this report was to provide a set of recommendations to Nestle based work on the plant based dairy alternative market segment of New Zealand. The recommendations were to help Nestle to adapt to the market of New Zealand and succeed. The market proves both opportunities and challenges for Nestle. The first strategy that was given was to improve the product development process further through continuous research and development. This could help to increase the variety of the products, the flavor profiles and textures of the plant based dairy alternatives. Innovative ideas can be used while developing products and local flavors can be used to create local and cultural appeal to the products. The second recommendation that was given was to leverage the trend of health and wellness that can be seen among the customers in New Zealand. This can be done by focussing on the benefits of the products and its alignment with health and wellness of the customers. The third recommendation was to ensure sustainable sourcing and supply chain management as it was greatly related to the resilience of the supply chain and the ability to overcome supply chain disruptions. The fourth recommendation was to establish strong local presence through local partnerships, marketing strategies, endorsements and aligning products with the local tastes in New Zealand. The fifth recommendation was to highlight the environmental friendliness and commitment of the brand. This can be done by showing the environmental friendliness of its overall product range or just plant based dairy alternatives. The sixth recommendation was to balance price and value. The seventh was optimal adherence to regulations. The eighth recommendation was to take part in awareness campaigns and the final was addressing the issue of obesity.

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