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Nestle-Milo is a product that is sold in different countries around the globe. This paper provides a SWOT (Strength, Weakness, Opportunities and Threats) analysis with the aim of finding out on how effective Milo is currently operating and what are the internal factors influencing the success of the product (Sarah, 2009). Below is a SWOT analysis of Milo:
Strengths
- Strong Brand Equity: Milo has a strong brand equity, which has been achieved through selling of healthy products. Milo is also a well-known product due to variety of product items under its brand referred to as Milo. Some of these product items include: the original Milo brand, Milo Zuze, Milo wafer bar among others.
- Unique Chocolate Flavors: Since the company focuses on producing chocolate energy drinks, this has allowed it to gain a good reputation (Palmer, 2009). Its unique flavors make it attractive to more customers all over the world. As a result of the unique selling points, Milo has been profitable and assured the success of the company.
- Strong geographical advantage (Nestle): Milo is sold in many countries all over the world. This has enabled Milo to attain big sales in different countries.
- Corporate Social Responsibility: The company is capable of addressing its challenges in an ethical manner. These challenges have attributed to the sharp increase in the price of the commodity in 2007. Nestle-Milo has maintained its strong market share because its ubiquitous beverage taste is desired by consumers in Malaysia, Australia and globally (Nestlé Oceania, 2008).
- Promotion/Advertisement: Promotion of Milo products is done through various ways in different countries and this has helped it achieve an immense growth. This has also made its products be widely available in every market. Ads and sales promotion via their website accompanied with good quality products have assured the clientele to earn value for their money.
Weaknesses
- Lack of diverse flavors: Not enough diversity of flavors is an area that needs to be looked into for Milo products to beat its competitors.
- Packaging: The design of tin and labeling are some of the areas that have really affected the desire of most consumers. Their packaging must be improved in order to achieve competitive advantage.
Opportunities
- Expansion: The company still has the potential of reaching the small towns and other geographical areas (Moir, 2001). This is because the existing markets are not fully tapped and in order to increase its presence in other areas; it can still penetrate further. Due to geographical changes and the rise of consumer class in many countries, the per capita consumption of Milo products can potentially grow.
- Renovation of available products: Milo still has the potential of developing more new products and introducing them to the market. This will likely increase its profitability and help in gaining competitive advantage.
- Increased awareness of health and fitness: Nestle-Milo still has the potential of making its customers be aware of its new products and of how healthy they are. This has to be done via the internet or through ads. Products such as Milo Gold nutritious chocolate malt drinks, which were launched in 2007, can still be used to strengthen the brand’s nutritional image.
- Sponsorship: Nestle-Milo can increase its profitability through offering sponsorship in sporting events, which will in turn expand its product folio.
Threats
- Competition: Milo still faces immense competition from sister companies and it is thus important for the company to liberalize its trade and investment policies, which will enable it to operate in a globalized economy (Palmer, 2008). It must also produce in plenty of hot chocolate and energy drinks in order to win the already intensified battle. Competitors are also using aggressive marketing stratagems aimed at cutting the prices and this is likely to deepen the competition.
- Diversity in packaging: sister companies or competitors have diverse packaging whereby they use: bottles, cans, and pouches in order to attain competitive advantage. Lack of diversity in packaging has created a change in the trends of consumers and this is likely to affect the company’s yield.
- Creation of similar products: competitors have also opted to bring out more similar products to fight the company.
- Sectoral woes: increased prices of raw material, packaging, and manufacturing costs, fuel prices among others. This is because the company is not likely to pass on the burden to its customers.
Schor and Ford (2007) affirmed that Nestle-Milo is known to every consumer, but the company must utilize good pricing/management strategies so as to beat their competitors. If the above SWOT analysis of Milo is not taken into consideration, the company is likely to deliver quality products at its customers’ convenience.