Lessons from Netslé's growth

Amazing news in these times, not only did Nestlé beat expectations for 2008, they announced an expected growth rate of 5% for 2009.

This ads another layer of competitive advantage derived from having a diversified portfolio. Diversification in geography, category and price strategy. ( "Paul Bulke argued the company's major strength was that it offered a range of expensive and value brands, meaning consumers could “trade up and trade down” while still buying products from Nestlé's stable.")

Working on a product launch for P&G 5 years ago I experienced an interesting twist to the power of trading at the top and bottom of the market. After spending three years to develop a product for the so called "bottom of the pyramid" the engineers came up with a solution that was cheaper, more sustainable and delivered a better customer experience than the top of the line. By using "being frugal" as a design constraint they came up with a solution that could make them more competitive in the top end.

Innovation at the edges, strengthened the core.

In these times it is a humbling thought to remember that 4 Billion people are not experiencing a financial crisis. Because the live below the poverty line a financial crash in New York does not affect them. Perhaps this may spark a renewed interest by companies in learning the true meaning of being frugal, and turning that into better solutions.