Blue Ocean Strategy Sequencing - Nestle

Blue Ocean Strategy
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Alicia Kujan
Student (University), United States

Blue Ocean Strategy Sequencing - Nestle

Nestle's Blue Ocean Strategy Sequence
Greetings to the group. For an assignment I described a Blue Ocean strategy sequence for Nestle. Please read the following and make any comments or suggestions you think of! Thank you in advance for your participation.
Introduction:
The Blue Ocean strategy sequence as described by Kim and Mauborgne (2005) follows the pattern of: buyer utility, price, cost, and adoption.
Using this sequence, please consider the following business idea for Nestle Drink Products to open a Blue Ocean market in children's drinks:.

  Alicia Kujan
Student (University), United States
 

Strategic Sequencing Nestle Drink Products

Buyer utility:
Nestle drink products are available at grocery stores, many convenience stores and even several drug stores. The customer does not have to exert energy to find these products. In addition to fun drinks like chocolate and strawberry milk mixes, Nestle also offers healthier options such as Ovaltine, kids essentials, and carnation instant breakfast. The business idea is a children’s version of the instant breakfast formula.
Price:
Nestle already produces carnation instant breakfast, which is a great product but geared toward adult health needs and not those of children. Since the current formula of instant breakfast is already successful in the market at a very attainable price point for most buyers, it follows that a similar price for a child specific formulation would be well within most buyers’ budgets. It would be very important in the market for the children’s version to remain very close in price to the original “adult” version or it will not sell and consumers will continue to purchase the original formula and lose interest in the new product.
Cost:
Since the carnation instant breakfast product is already successful with meeting cost targets, the new product should be able to also meet cost targets. Changes in the formula to produce a more child appropriate formula should not have extensive cost increases; it is simply rebalancing the formula already in use. This means the company’s supplier and distribution chains would remain the same.
Adoption:
The main hurdles would be getting out the word to the target market. There are already children’s drink mixes available, some are just flavorings, a few add in some vitamins and minerals, and still others are actually full dietary supplements to help with specific needs. There are certainly options in the market currently, but none of them actually offer a real meal replacer. A whole new market opens up when we reach out to those parents of finicky eaters and, particularly, small children that refuse a meal. It is also a great product for use when on vacation. Offering this product in the powdered envelope form might be best for the initial product introduction because it builds on product familiarity and echoes the similarity to the existing instant breakfast mix. Ready to drink options could be very useful to explore at a later time.
References
Kim and Mauborgne, 2005, Blue Ocean strategy: How to create uncontested market space and make the competition irrelevant, Harvard BU.

  jeff smith
Analyst, New Zealand
 

Nestle’s Nespresso Business Model

Didn't Nestle enter uncontested market space by creating the Nespresso? This took a commodity called coffee and turned i...

 

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