July 27, 2010
The Nespresso case traces the development of the Nespresso System in a 100%-owned affiliate deliberately placed outside Nestlé’s main organizational structure. The case also highlights the team's successes and challenges in creating a new, small, niche segment in the mature coffee market and its prospects for growing the business from 150 million to 1 billion Swiss francs within the next decade. The Nespresso system was a radical departure from most Nestle lines of businesses targeted to the mass market; the Nespresso story offers provocative lessons about innovation in large, highly structured organizations.
This case speaks about the history of Nespresso’s development and the …show more content…
During this time Lang and his team introduced modifications to the designs, they renovated the coffee capsules to cut down on costs and make them recyclable. Because they shifted their target market to the household Market Nespresso had to rethink the distribution process. This is when Lang came up with the idea of the Nespresso club, which handle service calls and offered consumers around the clock ordering, prompt delivery of fresh coffee, and personalized advice. The Club was an immediate success and was the first direct marketing experiment within the Nestle organization. As a way to get the product out, the company contract with a few airlines to get them to start serving the Nespresso product onboard their first class long haul flights. Top restaurants were solicited.
Under Lang’s leadership, NCS broke even in 1995 and as a result became one of the fastest growing business units in the Nestle organization. Lang made sure to create a climate for innovation in order to keep the Nespresso concept alive, however in 1997 Lang left and William Pronk took the reins. Pronk worked to enhance the customer service side of the business. Pronk established several renovations in order to create customer intimacy, to