April 24, 2008

Operations Strategy Lesson 2 Exercise

I’m going to analyse the “Nestlè-Nespresso Coffee Capsules” competitive factors. Nespresso is a division of Nestléthat introduced all over the world the coffee-capsule technology.

It’s becoming more and more widespread, it’s started enlarging products/services offered and its competitors’ number is increasing enormously.

The Coffee Capsules can be bought only on-line, through a call centres or in one of the few boutiques (only 3 in Italyfor instance).

Analisying deeply its 5 performance objectives I summarised the analysis in the first sheet (Image 1) of the attached file (Lesson 2.xls).

In this description the performance objectives trade-off against each other clearly appears.

Nespresso focuses on quality, flexibility and speed but has to face with quite high cost.

The competitive factors’ categorization appears in the second sheet (Image 2) of the already  mentioned file (Lesson 2.xls).

Considering a 2 year forward horizon time:

1. The 2 delights highlighted in the image should move towards order winners because of the competitors’ number increase and because of the continuous customers’ variety demand.

2. In my opinion “short delivery” and “response time” will erode to be qualifiers. The “on-time arrival of products” is a characteristic that depends on internal, external factors and on unpredictable events so may be (an may always will be) improved by a company.

3. With the introduction of new products, qualifiers like “taste” or “Reliable products” will cyclically pass through phase of being order winners and then (after an assessing period) reach again the qualifier phase.

4. As already mentioned Nespresso works hard in order to test customers’ satisfaction and to prevent future requirements. It’s also developed commercial agreement with coffee machine producers in order to be more available on the market scenario.




- One comment Not publicly viewable

  1. Desmond Yarham

    Your answer was correctly focused & you numbered each of the 4 parts of the answer-pretty fundamental but people do forget to number their answers. I maintain that Delights etc are to some extent subjective, the important point is that you as an individual find certain aspects of the offering Delights. The accompanying literature (that you included ) positioned the system as a high quality/highly desirable product that is not readily available through supermarket outlets (ie the pods). The annual introduction of 2 additional ‘special’ flavours does appear to introduce further Delights & this may help to elongate the longivity of the product concept. Your .xls attachment contained good supporting material & the web links were welcomed. Also good references.

    29 Apr 2008, 06:28

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