After the Second World War, there was the shortage of food in Japan and this created a need for a cheap and quick solution. This is when Momofuku Ando the founder of Nissin Foods realized that one solution could be instant noodles. He designed the instant ramen noodles which could be made in just three minutes and thus created a whole new category which is currently one of the top selling categories of semi-processed foods globally.
This eventually led to the formation of Nissin Food which is one of Japan’s leading producers of instant noodles. In addition to Top Ramen, the company also has Instant Chow Mein, Cup Noodles, Noodle Soup and Souper Meal.
Strengths in the SWOT analysis of Nissin
The following are the strengths of Nissin Foods:
- First Mover advantage: Nissin Foods founder Momofuku Ando was one of the first to realize that there could be the three-minute solution to hunger pangs and introduced instant noodles. This first mover advantage gave the company market leadership in the category for many years.
- Differentiation: Each brand of noodle is differentiated in terms of their taste and texture. Nissin Noodles are known for their characteristic thinness and Top Ramen is known for its thin size with a hard texture that makes it the classic Hakata Ramen noodle.
- Easy meal options: Globally instant noodles became a huge success because of the ease with which meals could be prepared. This made it age independent and Nissin could target the mass market in most regions that it operated in
- Multiple options: The instant noodles can be used as just noodles following the instruction is given in the pack or can also be used to create full meals by adding ingredients of one’s choice such as fish, chicken or vegetables. There are numerous recipes which can be followed to create nutritious meals out of instant noodles.
- Local Flavors: Nissin has tried to understand the local cuisines of each market it operates in and tried to develop tastemakers that suit the local customer choices. In India for example in its flagship brand Top Ramen, the company has launched flavors like Masala, Curry and a healthy atta noodles as well which suit the local taste.
- Core Product: The core product in Nissin Foods remains the same which is instant noodles which are simple to manufacture and use uncomplicated and cheap ingredients. The differentiation in each variant comes in the form of the tastemaker which is given along with the noodle packet. The focus on core product makes the manufacturing cost-effective and procurement of raw materials simple.
Weaknesses in the SWOT analysis of Nissin
Some of the key weaknesses of Nissin Foods :
- Cheap: Instant noodles are cheap making it affordable to most income segments.However, the low price of instant noodles is often attributed to the use of poor quality materials as its ingredients which in turn has brought down the acceptance of the same in premium and middle segments.
- Low penetration: Nestle and ITC which are the top players in the noodle segment in India a widespread distribution channel in India which is one of Nissin Foods biggest markets. In comparison to these companies, Nissin does not reach out to such a wide audience which in turn affects their overall sales.
- Low advertising budgets: Market leaders like Maggi and Yippee used to advertise aggressively on all media till the ban on the products came. However, Nissin spent very less on advertisements and thus the brand was not visible at all.
- Negative Image of noodles: There have been a lot of criticism and allegations against instant noodles brands including harmful ingredients in the tastemaker packets which come along with the noodle. The presence of monosodium glutamate in the tastemakers resulted in many brands being recalled from the market. This has reduced the per capita consumption of noodles.
Opportunities in the SWOT analysis of Nissin
Some of the opportunities include :
- Lack of time: The increase in the number of female professionals and duration of working hours, more need for snacking in between meals, less amount of time to be spent in the kitchen, number of singles preferring to cook their own meals etc have all increased the demand for instant and pre-processed food.
Threats in the SWOT analysis of Nissin
Some of the threats include:
- Competition: Some of the major competitors of Nissin Foods are Maggi, Yippee and Chings Secret.