NESPRESSO – LIMITATION
Nespresso has always kept its vision of selling quality coffee as a premium product and therefore prices of their products are much higher compared to others. This on the other hand gave their competitors an advantage imitating their product and selling it for a cheaper price. As seen in the case of Jean-Paul Gaillard, a former chief of Nespresso, who has created a coffee-making system for Nestle which has made them billions, decided to take on and compete his old firm. He started making coffee capsules which exactly fits into Nespresso Machines, to compete with the original Nespresso pods. Nespresso has also suffered a number of legal setbacks as several of the patents that reinforces its system against compatible pods sold more cheaply by rivals have been struck down in various jurisdictions (The Economist, 2012).
NESPRESSO – FORECAST
Nespresso plans to produce a new machine that will be able to brew larger coffees called VertuoLine, which is meant to appeal to American tastes. It intends to help double to sales in US to $600 million in the next two years. With this new coffee maker, it the seeks to boost its international growth. Analysts have expected the US trends to support the further growth in coffee capsule demand, mainly in the higher end of the market.
Currently in the US, coffees are dominated by the Green Mountain Coffee Roasters, which have acquired the Keurig brand of brewers in 2006. Despite Nespresso’s focus on long coffees, they do not intend to compete and win over Keurigs customers. According to Mr Duvoisin, “We are not looking at who we are going to compete against…... We think there is a large market of coffee consumers who want a premium product."
