KITKAT JAPAN Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

KITKAT JAPAN Case Solution

SWOT Analysis

The strength, weaknesses, opportunities and threats of the company are as follows.

Strength:

Nestle Japan holds a share of 6.1% within the category of confectionery market. It possesses a group of strong team members that significantly increased the sales of NESTLE Japan KitKat over the years through identifying the market gap and tapping a new segment. A strong brand image has been created in the minds of its consumers. It gained a wide spread success through its story. The strong marketing strategies backed up by strong market research adopted by Nestle Japan was the core reason behind the huge success of the KitKat brand and the increased sales.

Weaknesses:

The Japanese people preferred small serving size and less sweet chocolates which limits the number of sales. The Japanese does not increase the amount of intake of chocolates no matter how many products are being introduced, this make it difficult for NESTLE Japan to increase its market share in such a competitive environment where each year thousands of similar products are being launched by its competitors. Even the festivals did not affect or caused an increase to the demand for chocolates in Japan.

As KitKat is being used for well-wishing the relatives and family member, an additional shipping fee had to be paid for an extra envelop, making the shipping cost expensive because of the bars and boxes of KitKat which are not designed to be sent through mail.

Opportunities:

The Nestle company in Japan due to its unique marketing strategies and experiences in the manufacturing was able to gain a significant market share and became a preferred chocolate brand with in short period of time. Using the KitKat brand, the company took over as a leader in sales in the Japanese market. The company using its unique branding ability can further deepen its brand image in the mind of the consumers or customers. As the customers are the key strength of Nestle Japan, Nestle can use them as an opportunity in leveraging its future plan of growths and to capitalize its sales.

Threats:

The threat being faced by the company is the growing competition in the confectionary market in Japan. The big giant competitors are using the same strategy as adopted by the NESTLE KITKAT Japan, in order to further increase their market share which can negatively impact the brand image and the story associated with the brand KitKat and is a major threat to the future growth of the brand.

Alternatives

Alternative 1:

One of the alternative available for the company is that to install vending machines containing KitKat in the schools, hotels, Petrol stations and service centers that provide students and other potential customers with the test taking facilities specially for students and in campuses of schools, colleges and universities and the company can write a tag line to attract the students towards the vending machines. This will increase the sales of the KitKat in Japan by providing continence to its customer and being available to the reach.

Alternative 2:

Another alternative that can benefit the company in capitalizing the success it has gained over the years is by improving its packaging which is currently a loop hole, as the customers of KitKat considered it as a symbol of luck. Therefore the boxes of KitKat are sent to the students taking tests or appearing in examination in their schools or colleges through mail and they have to incur an additional cost because of the packaging. As the competition in confectionary market is growing rapidly and brands are competing for the market share, there is a high probability that customer might try to take an advantage of it.

Alternative 3:

In order to increase the sales margin, Nestle Japan can develop its image as a safe and hygienic brand by meeting all the health standard developed by the Japan food and drug administration. This will encourage the customer to prefer nestle brand over the other chocolates brands because of its safety, health and nutritious assurance.

Alternative 4

The company can reduce the size of the chocolate and by improving its packaging and making look more attractive, neat and nicely packed, as this strategy will attract the customers towards Nestle KitKat brand because as found in the research conducted by Nestle Japan marketing research Japanese people prefer chocolates that are clean, hygienic and neat. Due to its small packaging it will convince the customer of its brand and product quality and can be easily fit in the Japanese convenience stores.

Recommendation

After analyzing the all the alternatives that can be utilized by the company so far looking at the company’s current situation and analyzing its weakness, strength and the opportunities that can be unfolded by the company and the threats that the company is facing due to the increased competition in the market; the best option that the company can opt for is the ALTERNATIVE 1 that is the installation of vending machines in the schools, campuses and in hotels which can boost up KITKAT’s sale. This will benefit the company by making the brand more visible and within the reach of the targeted audience. This will help the company in maintaining its competitive image and meeting the changing behavior and trends of the shoppers by being convenient and visible. This will also benefit the company’s profit by not giving the consumers an opportunity to go and make purchases form other brands................

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