1. BACKGROUND OF STUDY
Nestlé is one of those brand names that we are so used to seeing on so many things we consume it has become so normal and trusted in our consumerist heads. Our interest in choosing this company lies in evaluating how a giant food corporation was formed and what have they accomplished over the years to become who they are today. This company has its\' presence all over the world, what values does such a large corporation hold in order to create such large influence over humans and their consumptions is one of our main questions.
Nestlé took its first step into the world in 1866 in Vevey, Switzerland. Founder Henri Nestlé a German born pharmacist created an infant food that was given to babies of those mothers who were unable to breastfeed their children. He gave the name Farine lactée to his product which soon gained popularity. He created his first company and named it Société Farine Lactée Henri Nestlé. His surname was used in the company which had the meaning of \"little nest\" it was also used to symbolise the company forming the iconic nest logo. The company soon produced condensed milk in order to compete with the Anglo-Swiss condensed milk company who created world\'s first condensed milk, MILKMAID. Both companies merged together in 1905 and went on to open factories in the United States, Britain, Spain,Germany, Australia and also acquired warehouses in Singapore, Hong Kong and Bombay.
When the world war one began it was tough on the company at first however when demand for dairy products increased due to the scarcity of milk Nestlé had to purchase several factories in the US to keep up with the demand.The company was able to make millions of dollars by acquiring government contracts for condensed milk and dairy products. When the war ended Nestlé went into debt as resources became more expensive and economy deteriorated. In the 1920\'s Nestlé added chocolate into their product line along with powdered beverage products. It was in 1930, that Nestlé made another breakthrough which was with the creation of powdered coffee that revolutionized coffee drinking, it was an instant hit especially after the second world war started and as Nescafé became the preferred beverage of US soldiers. In 1945, the company was able to merge and acquire several food companies, and in 1974 they became a major stockholder of L\'oreal.As the years passed by the company moved on from food to pharmaceutical with the purchase of Alcom Laboratories Inc.. By 1990\'s the company had acquired San Pellegrino among many other food companies and became leader of Pet food industry by merging with another Pet food giant. In the 2000\'s they concentrated their acquisitions in America and continue to grow with their business goals, visions and mission in mind.
\"People understand that food is a source of nourishment and satisfaction, but also pleasure, health, happiness and peace of mind. They are increasingly aware that their food and beverage choices can impact their quality of life and affect the lives of others.
• Innovation has been at the heart of our company since its beginning.
• Each day we strive to make our products tastier and healthier choices that help consumers care for themselves and their families.
• We have the largest R&D network of any food company in the world
• We try to earn our consumers' trust with safe products of the highest quality: at Nestlé, safety and quality are non-negotiable.
• We create trustworthy products, systems and services that contribute to improving the quality of consumers' lives.\"
3.2 MISSION STATEMENT
The mission of Nestlé nowadays – “good food, good life” – is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions and to put a strong emphasize that leadership is nog just about size; it is also about behaviour and trust earned over a long period of time by consistently delivering on promises
Besides its mission statement, Nestle Global uses 10 business principles to guide its actions. These principles are nutrition, health and wellness; quality assurance; consumer communication; human rights; leadership and personal responsibility; safety and health at work; supplier and customer relations; agricultural and rural development; environmental sustainability; and water. The first seven principles guide how Nestle does business. The last three principles shape how Nestle gives back to the community and environment through sustainable, ethical business practices.
3.3 FINANCIAL POSITION
= public or corporate (it is an SA)
gave out 3.224.800.000 shares
Value on 29/9 € 70,77 (77,16 CHF)
= # employees
= # shares (+ value price)
3.4 ORGANIZATIONAL STRUCTURE
4. STRATEGY ANALYSIS
4.1 NESTLE OPERATIONAL PILLARS
Nestle\'s strategic business units focus on the geography and product development. In the product development sector, Nestle is currently focusing on providing healthier product options for their customers. The company claimed that they are concern on the nutrition, health and wellness and try to be innovative and supports the constant renovation of their products.
Nestle is in the process of deliver products with reduced amount of salt, sugar and saturated fats while maintaining customer's preferences. In the past few years, they also expand their strategy by creating “Nestle Health Science” which specialized in improving the role of nutritional therapy to change the course of the health for consumers, patients and for their partner in healthcare. And “Nestle Skin Health” focused in medical skin treatment to help develop their products.
Not only focusing on developing their own products, but Nestle also create awareness about healthier lifestyle through several events. They created few science based education programme called “Start Healthy Stay Healthy, United for Healthier Kids, Nestle Healthy Kids”. These programmes help parents and caregivers provide their children with food nutrition knowledge and also focus on delivering a healthier lifestyle for children and also encouraging physical activity in their daily life.
Nestle has their own roadmap framework that guides the corporation to reach their goals. It shows how they deliver profitable growth, competitive advantages and all the strategies to help them be effective and efficient in their business.
The operation pillars consist of :
1. Consumer engagement
Nestle believed that they have to engage with their consumer in two ways, not only by providing them information about the innovation that Nestle is currently developing but also they are open to get feedbacks from consumers in order to improves their products to be better.
2. Operational efficiency
Ensuring the best raw materials, the best processes, safest and highest quality products. Their objectives are to eliminate waste and errors, increase efficiency and improve the quality and safety in all operations.
3. Whenever, wherever, whoever
Ensuring not only the quality and efficiency of the operations, but also to ensure that the products available are sustainable in every part of the world.
4. Innovation and Renovation
To be the leader in innovation and renovation not only in products, but also in systems and processes. Focus on-going renewal to satisfy consumer's requirement.
The competitive advantages consist of:
1.People, Culture, values and attitude
The Nestle culture values diversity and always open to innovation. With the cultures that roots back to 150 years ago, Nestle believed in bringing their people together from all over the world with a shared set of behaviours and values into a single way of doing business.
2.Unmatched Geographic Presence
Nestle unmatched geographic presence has created a strong relationship between the corporation and the consumers which enable them to anticipate the needs and the quality expectations from consumers.
3. Unmatched Research and Development Capability
The global innovation, technology, research, and development capacity help them to be innovation in relevant and attractive for consumers and that advances their leadership in Nutrition, Health and Wellness.
4. Unmatched Products and Brand Portfolio
Their products and portfolio ranges from global icons to local favourites
Nestle's Growth Driver
1.Nutrition, Health and Wellness
To be the leader in Nutrition, Health and Wellness by providing wide varieties of healthier F&B choices which means responding to specific nutritional needs.
2. Emerging markets and Popularly Positioned Products
Nestle created Popularly Positioned products to emerge with lower incomes consumers, providing the nutritional information and also with promised quality and against nutritional deficiencies.
3. Out of home consumption
Out of home consumption is a fast growing part of the industry. It covers leisure, from the roadside kiosks in Asia to gourmet restaurants in the capitals of the world and institutional catering from schools to hospitals.
Nestle also provide premium products for consumer that seek for the better quality F&B and willing to pay more for the premium products.
In addition, we have set out six strategic priorities.
1. Make Choices
Putting resources behind the ideas, products and categories that help Nestle on their journey to recognised Nutrition, Health and Wellness leadership, and to deliver sustained financial performance.
2. Grasp Opportunities
To see the opportunity in change and trends, and translate them into concrete business opportunities.
3. Value What Consumers Value
All that the company do should create value for consumers and drive out waste.
4. Engage with Stakeholders
Nestle wants to be trusted by all consumers and stakeholders as a genuine and responsible member of the community.
5. Embrace Digital
Deepen the connection with consumers through the growing e-commerce channel and through real-time listening, engagement and dialogue.
6. Win through People and Teams
Assigning the right people with the right capabilities and effective leadership at all levels to engage, empower and enable everyone to give their best.
4.2 STRATEGIC CHOICES
A decentralized and Aligned Organization
It is clear that Nestle is adopting Global strategy with having 436 factories in 85 countries and having their products being sold in 189 countries as per October 2016. Nestle is focusing on their product development as well as their geographical development. But, the unique thing in Nestle business is that they adopted decentralized strategy. Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree of autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. Products and services on sales in different countries were adapted to suit local market conditions. Local Nestlé units work within a global framework based on the Nestlé principle: “centralise what you must, but decentralise what you can“. In this way we combine the advantages of a worldwide company with the advantages of smaller, local businesses. Although Nestlé is very global, essentially it's a company made up of smaller local units. Their global sales are simply the result of adding together the sales of each local company.
Nestlé has its own local companies in most countries. The Head Office in Switzerland sets overall strategy which is directed via Zone Management and the Strategic Business Units (SBUs). Geographically, Nestlé's three Zones (Europe; the Americas; Asia, Oceania, Africa and the Middle East) work closely with the local markets and the SBUs. Their primary role is that of enablers, acting as the voice of the centre to the markets, and the voice of the markets to the centre. Nestlé share their company vision so that everyone around the world understands the direction to take – and how to get there with common tools, common strategies and common values. This ensures that Nestle's people around the world know how to act, and have a very strong framework of values and a clear reference point for fast decision-making.
Nestle also uses management development programs as a strategic tool for creating an esprit de corps among managers. At Rive-Reine, the company\'s international training centre in Switzerland, the company brings together managers from, around the world, at different stages in their careers, for specially targeted development programs of two to three weeks\' duration. The objective of these programs is to give the managers a better understanding of Nestle\'s culture and strategy and to give them access to the company\'s top management.
In addition to how the managers carry out their work as leaders, Nestlé pragmatically implements the following organisational principles:
• Being as decentralised as possible to optimally respond to the needs of consumers, within the framework defined by our fundamental policies, strategic directions and operational efficiencies.
• Ensuring collaboration of all Nestlé businesses and compliance with Nestlé principles, policies and standards (Nestlé in the Market approach).
• Building and maintaining a structure which assures operational speed, with a strong focus on results and removing unnecessary obstacles.
• Establishing flat and flexible organisations with minimal levels of management and broad spans of control, which also enable people development.
• Setting a shared vision and common goals to leverage the strength of people and organisational alignment.
• Defining clear levels of responsibility. Teamwork does not affect the manager's duty towards his/her people and business results. A team must always have a leader who assumes full responsible.
The SBUs specialise in a particular category, for example Coffee and Beverages, or PetCare, or Chocolate and Confectionery. They work with Research and Development (R&D) to ensure that everything the company produces is led by consumer insights and relevant innovation and they help the markets to achieve their business and brand objectives.
Other Nestlé Group companies There are a number of separate companies within the Group such as Nestlé Waters and Nestlé Nutrition. Nestlé also owns Alcon, a pharmaceutical company that is the world leader in eye care, preventing vision loss from glaucoma, treating eye infections and restoring vision through cataract surgery. Nestlé also has a significant share of L'Oréal, the world leader in cosmetics.
The advantages of choosing Decentralized system in their business:
• Decisions. Local employees have the best knowledge base from which to make decisions, so this should improve tactical-level decisions throughout the company. It also removes many small decisions from senior management, which therefore has more time to develop strategic direction. Nestle can develop their products based on local customer's requirements.
• Reduce Turnover Rate. Employees who are given more authority tend to stay with a company longer, so employee turnover declines. Nestle has been in the industry for really long time and they believed that the people in the company play a big role in the company's development.
• Training. Giving some authority to local managers is an excellent way to observe their decision-making ability, which can be used to determine advancement to higher positions.
• Spotting The Problem Is Easy. Decentralizing a business allows a company to pinpoint the weak links in their chain and, as a result, run the company more efficiently.
• Ease of Expansion. For a growing business, decentralization can facilitate the process of expansion. For example, if Nestle want to open a new business unit in a different geographic area, decentralization allows the new unit to operate as an independent entity, meaning it can react more easily to the specific needs of the area, such as deciding to sell products that appeal to the local market.
Disadvantages of the Decentralized Organization Structure
Despite the advantages of the decentralized organizational structure, it can also negatively impact processes and the flow of information within a business, with the following results:
• Local viewpoint. A local manager makes decisions based on his local viewpoint of the company\'s operations. This may not lead to decisions favorable to the company as a whole. For example, a local manager might pour more funds into a struggling store, whereas a senior manager might elect to cut losses and shutter the store.
• Inexperience Is A Problem One of the biggest issues when dealing with a decentralized business is sheer inexperience. If employees are not trained and experienced in the types of things that they will be responsible for, then the business is greatly harmed. Rather than looking at things from a company wide perspective, they look at it from their own perspective.
• Not A Good Choice For Smaller company If a company or business hasn't completely established it's way of doing things, their main objective, and are still building a name for themselves, then decentralization is typically not the best choice. Only businesses that are well established should consider this type of organization structure.
In conclusion, we are supporting Nestle to choose decentralization strategy because Nestle has been in the industry for 150 years, definitely they have a lot of factories around the world. It would be easier for them to control the business based on the customer's requirement and it will be easier for them to expand their business and achieve their goals on geographical development. Nestle also value their employees and give them trust on making decision and still share the same company values. Adjusting in the local market is crucial especially in the food and beverage industry because in every part of the world, people will have different taste preferences based on their cultures. For example, one of Nestle product, “KitKat” has several special flavour in countries like Japan with their Green tea KitKat, it shows the authenticity of the products and it makes it seems like Nestle is part of their culture.
4.3 SWOT ANALYSIS
Nestle S.A. (OTC: NSRGY) is a multinational packaged foods and beverage manufacturer headquartered in Switzerland. It is widely considered to be the world's largest food manufacturer, with more than 2000 brands and operations in 197 countries.
Nestle reported revenues of $99.09 billion on December 31, 2015, and estimated sales of $92.62 billion for the current fiscal year. Nestle had a market capitalization of $245.71 billion, according to YCharts.com; because the company is based in Switzerland, it does not have to report its enterprise value like an American company would.
Currently Nestle operates in 12 different segments of the consumer products market, including baby foods, bottled water, cereals, candy, coffee, prepared and prepackaged foods, dairy, drinks, food service, healthcare and nutrition, ice cream and pet care. Its staple of brands includes some of the best-known names in the industry, such as Stouffer's, Dreyer's, Haggen-Daz, Purina, Aero, Butterfinger, Gerber, Maggi and Perrier.
o Highly diverse variety of brands
o Relationships with well established brands E.g.: Coca-Cola, Colgate, Palmolive and General Mills.
o Nestlé brands are well recognised and has been around for generations E.g: Gerber
o Strong Research and Development capabilities
o Strong relationship with retailers
o Large market share in large economies such as Europe and America
o Majority of sales depend on few well recognised brands therefore it is vulnerable to sudden change in consumer behaviour.
o Grocery sales depend on giant retailers that intends to promote house brands.
o Some products are ageing and are seen as old-fashioned E.g.: Carnation milk.
o Heavily dependent on advertising leading to high marketing costs.
o High cost to launch new products to supplement older ones.
o Growth in online retail opens up new distribution channels E.g.: Amazon Prime.
o Growing middle classes in China and India creates broader markets.
o Increased disposable income in China would create demand for luxury products such as bottled water, ice cream and petfoods.
o Changes in lifestyle, more working women and more single-person households create demand for packaged foods.
o Increased mobility creates demand for bottled water and snack foods.
o Increased interest in health and nutrition could increase demand for energy drinks.
o Well-known retailers such as Walmart promote house brands giving their brands better shelf visibility.
o Pressure to cut prices from retailers such as Walmart.
o Growing use of new retail channels such as Amazon prime may not favour traditional products.
o Growing ineffectiveness of traditional advertising as different marketing methods dominate the market.
o Consumers in some markets are eating less at home decreasing demand for packaged foods.
o Growing suspicion of Packaged foods as unhealthy in European and North American markets.
o Increased government insight and regulations in countries such as India where leniency was expected before.
Despite the threats, Nestle still owns some of the world's best-recognized and most profitable food brands. Unfortunately, it faces a dramatically-changing grocery market in which traditional brands are losing much of their effectiveness. Such brands are heavily dependent upon traditional advertising and marketing strategies such as television commercials, which are often ineffective in today's world.
Changing patterns of consumer behavior, such as the demand for more natural food in Europe and the United States and increased spending on take-out and restaurant food, could be a greater threat to Nestle. It might have to create products or revamp brands simply to maintain market share.
4.4 PESTLE ANALYSIS
The company is working in diversified communities and it has to face change in regulations in different countries due to various reasons. The company has shown its stability in various new emerging economies including China and India, as they have to compete with the local companies. The global regulations are changed from time to time and they have to initiate the standardized practices. The company has to follow different political changes in the developing countries and it provides its products at the comparatively higher rates.
This brand has started preparation of beverages, baby food, pet food, dairy products, confectionaries and pharmaceutical. The company is working across the world in about 86 countries, which has shown its strength in its business. It has introduced various subsidiaries like Maggi, Kit Kat, Nescafe and many more. This brand has maintained large network of R&D and it has done the research and development work and it has introduced innovative products in the market. The clients can find vast range of its products in the cities and in the rural areas because this brand has vast and most effective supply chain network. Due to different economic policies of the different countries, the company has to face problems in supplying its products to the customers.
Social or cultural environment had great impact on Nestle. The main focus of social/ cultural includes the Social change involves changing attitudes and lifestyles. The social and cultural environment is constantly changing. Different countries had different culture (language, religious beliefs, food, family, clothing and their lifestyle). Every country has different consumer taste and lifestyle and Nestle has to develop effective strategies in order to met different lifestyle consumer behavior. Company is totally dependent on the consumer lifestyle and their attitude. Product or services cannot be successful until company has enough information about the consumer lifestyle. Nestle has to take social and cultural factors under consideration in order to achieve their strategic objectives.
And now, the education level in most of the developed and developing countries is increased and people have great awareness about the quality of the products and they ask for the healthy products, which are prepared with wholesome ingredients. The social media has given awareness to people about the uses of some ingredients in various products of the food companies and now they want to probe in to the manufacturing process of the products. Nestle has International standard of manufacturing of the products and the healthy ingredients are used in all of the products, which ensure its quality and there are few reports against their products. Most of the people have great trust over their products and they like to buy its products with great confidence. The change in lifestyle of the people has turned them to their homes and they want to use their home made products but the products of this company are the necessary part of their lunch or dinner. Now it becomes necessary to understand the behavior of customers and they can have personal approach to the market to know the changing marketing trends.
The IT technology use in the market has created new approach among the people and social media has contributed in the awareness of the people.
Now the consumers want to know about the products, their ingredients and they want to make interact with the firms.
The technology has created the innovation and people like to use soft drinks, juices and other readymade food products of the company while working on the internet.
The technology development told upon the business but also increased awareness about the quality of the food products, and they rely on the foods of this company.
E-commerce is massively used for the supply and production of the products and people are adopting the new behavior to understand the nature of the products.
Technology creates opportunities for new product or product improvements and new techniques of marketing such as internet and e-commerce. Nestle uses technology by taking orders via telephone and online by internet.
The company has introduced some healthcare products, which are used in almost all of the countries across the world. Some healthcare cream and powders have great demand in hot and tropical countries. The baby care products are equally important for the kids of all countries, so they are useful in all atmospheres. The change in weather can affect the supply of its products clients demand their product in the particular weather. The consumers have some concerns over the packaging of the products and they need to make them more protected so that the products can have longer effects for the users. The policies of this brand are user friendly and it follows the local rules and regulations while doing business in an country. When the brand sends its products, it ensures that these products are according to the local demands.
Any large organization has an environmental impact. For an example, Nestle respects the environment and is committed to environmentally sound business practices throughout the world, thus taking into account the need to preserve natural resources and save energy.
The legal factors are related to the legal environment of an organization and impact its demand and cost. For an example, Nestle was provided health and safety law for their members.
4.5 MARKETING MIX
A marketing mix consists of four major components which are the Products, price, place and promotion. By analyzing the marketing mix of a company we are able to identify the marketing strategy of a company and Its strengths. Nestlé being one of the giant food corporations of the world has a complex Marketing mix.
Due to the large variety of products approximately 6000, the company produces they have separated the management of these products into four strategic business units.
Beverages – Nestlé produces different varieties of beverages from bottled water to coffee to fruit drinks etc. One of their most profit earning product is Nescafe and in India Nestea.
Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are some of the milk and milk based products from the house of Nestle.
Prepared dishes and cooking aides – Nestle produces a large number of ready to eat dishes and condiments. Maggi brand is the most well known and popular. Maggi noodles is the favored noodles in almost all parts of Asia. Now nestle produces a wide variety of maggi brand products such as maggi pasta, maggi sauce etc.
Chocolates – The most famous nestle chocolate all over the world is kitkat, apart from this nestle also produces few other chocolate brands. Nestle also produces a most favored chocolate drink in Asia known as milo.
Nestle focuses greatly on the hygiene of their products and increasing the nutritional value of their products.
The price of all nestlé products are within the margin affordable for everyone. Due to their decentralized business model there is no fixed price on a same product sold in different parts of the world. For example a KitKat 100g that costs 1.90 Euros in France may cost less than an Euro in India. The prices of the products are highly dependent on the market where it\'s sold. Nestlé uses different packaging methods to increase or decrease prices of their products giving customers more choice in consumption. Their pricing strategy also includes discount for bulk purchases and seasonal pricing for products like chocolate.
Nestlé has their presence in about 86 countries where their products are sold in all varieties in most outlets. The company aims to sell their products globally hence receive revenue globally. The products go through two types of channels one is where it is manufactured and then bought in bulk to sell to consumers; the other channel is more complex where after manufacturing it is received by an agent that sells to distributors who sell to retailers and finally to consumer.
Nestlé spends a lot on advertising on Tv, Radio, Newspapers and many other medias. They try to create a personal touch to their products with slogans such as \" have a break, have a kit kat\". Their advertising campaigns on tv media is well received by consumers and they use catchy tunes that if heard anywhere else consumers are able to remember.
They are also very innovative in their advertising campaigns and focuses on their high selling products such as Nescafé , maggi noodles and KitKat.
4.6 BCG MATRIX
• Maggi Noodle (Food)
• Introduced in 1969
• Market share is still growing
• Introduced in 1950
• Sponsor 200 sport events in one year
Brand name has been embedded into customer's heart
• Launched in 1964
• High in research and development (R&D) cost
The coffee market is still growing, increasing number of coffee shops in the country
• Introduced in 1995
• It remained strong brand leader in the market.
• Rise of competitors and start lose the grip in the market.
Doing well, but do not know what to do with opportunities; decide whether to increase investment
• Mineral water (Beverage)
• Sterile Milk bear brand (liquid drink)
• Launched in 2013
• The concept of packaging is not welcomed
Weak in market, difficult to make profit
Majority of the consumers are unaware that Nestle offers Sterile Milk Bear brand and mineral water.
The concept of packaging is not being accepted by the consumers.
Lack of growing market makes Nestle Malaysia to be placed in as a Dog.
Our global network
We have the world\'s largest food and nutrition research organisation, with about 5000 people involved in R&D, as well as corporate venture funds and research partnerships with business partners and universities.
Our in-house fundamental research takes place in four centres:
• Nestlé Institute of Health Sciences provides and translate biomedical research into personalised science based nutrition.
• Nestlé Research Center provides the scientific knowledge and research base for product renovation and innovation.
• Clinical Development Unit provides medical expertise and manages clinical trials for the company, worldwide.
• R&D Tours provides scientific expertise in plant science.
Proprietary high-tech product development takes place in our 40 Product Technology centres andR&D centres worldwide.
5. INTERNATIONAL DEVELOPMENT
Every company goes through four different levels of Market penetration. There is the introduction stage where the company and its products are introduced into the market, then there is the growth stage where Revenue increases and customers increase however net profit remain low due to high investment needed in the expansion of the company. after growth is the maturity stage, this is the best place to be as market share, revenue and profit remains the best at this stage. After maturity is decline where your products lose their value in consumers mind and profit drops sometimes due to consumer behavior change. At this stage companies are advised to innovate in order to keep the company at bay.
Analyzing this graph we are able to conclude that the company Nestlé is at the maturity stage where the company profits from marginal income but does not see any main growth.
When we look a bit further into Nestlé's competitive strategies we can conclude that they mostly aim to balance sales between low risk but low growth countries of developed world and high risk and high growth markets of Africa and Latin America. We see that Nestlé doesn't take any unnecessary risks so they can have a steady growth and keep their shareholders satisfied without lots of fluctuations and unforeseen situations.
We find Nestlé in a very developed market as they are present in multiple markets with multiple brands. Depending on the kind of market, Nestlé grows by manipulating ingredients or processing technology for local conditions, and employ the appropriate brand.
Later in this research paper, we will see that Nestlé had a lot of different acquisitions, mergers and joint-venture this mostly with big, well-known companies. This is part of their strategy as they choose strategic partnership in order to generate growth in new and existing markets. Besides that we also find some alliances but they don't happen that often. For example in the early 1990s, Nestlé entered into an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca Cola's worldwide bottling system and expertise in prepared beverages. Nestlé makes a very smart moves as they grow bigger using other companies and implementing acquisitions, mergers etc. I think we can say that this is a big key to their success. They are well-known all over the world and a lot of their brands we probably don't know that they belong to Nestle. The company is everywhere, every day in the mind of the customer even if they don't know it's a Nestle brand.
As we have noticed in the very beginning while looking for information on the company, we discovered that they have multiple international strategies depending on the continent or region. Many variables are the cause for these different strategies. One of the most important variables is the competition in the region or the number of competitors.
Nestle get the most competition from their European and American food markets. This I why Nestle want to focus on new markets, new business which lead to growth with less competitors. They also do this via partnerships with different famous companies to strengthen their market position.
On the other hand, in Asia, Nestlé's strategy has been to acquire local companies in order to form a group of autonomous regional managers who know more about the culture of the local markets than Americans or Europeans. In this region, their focus is mainly on expanding sales in the foreign market, and looking for other expanding opportunities.
Nestlé has employed a wide-area strategy for Asia that involves producing different products in each country to supply the region with a given product from one country which are all provided by local distribution.
= where? Nestle sells their product all over the world but mostly in America. Even though their headquarters are in Switzerland, they grew really fast in America with their great range of products.
Will be more specific !!
- Nestlé acquires vending business in Japan
Nestlé Japan will acquire UCC Ueshima Coffee's business of vending machines. The acquisition includes more than 100 000 units with sales of about CHF 643 million. With this acquisition, Nestlé can use this network as a sales channel for ready-to-drink Nescafé and Nestea products. These machines will also carry UCC Ueshima Coffee products. Nestlé has the opportunity to expand its vending network significantly for ready-to-drink coffee and tea products as the Japanese market shows a rapid growth.
- Nestlé Waters acquires Clear Water, in Russia
Nestlé Waters has been present in Russia for many years, through a distribution office that oversees sales of its top international brands, Perrier, Vittel and S. Pellegrino. These brands will make sure that Nestlé is stronger on the growing Russian bottled water markets. With this acquisition, Nestlé will establish a solid base for further development on the Russian water market.
- Nestlé completes acquisition of Kraft Foods\' frozen pizza business
Nestlé has concluded the acquisition of Kraft Foods' frozen pizza business on 1 March 2010 after the completion of closing conditions. 3.620 Kraft Foods\' pizza employees will join Neslté. This gives Nestlé the strength of valuable employees with a lot of expertise. It\'s also a good strategic choice for Nestlé as it brings leadership in the North American frozen pizza category where they had a minor presence until now.
Conclusion important acquisitions: It's a repeating image that Nestlé makes acquisitions with companies who are located on a growing market. For Nestlé it's important to be present on unknown market and make a solid base on this market in order to use the growing market as an advantage to grow with the whole Nestlé company.
- Nestlé and Fonterra Sign Agreement on Dairy Alliance for the America
They announced this alliance in 2001 but now it is official: Nestlé S.A. and New Zealand\'s Fonterra Co-operative Group Ltd. created Dairy Partners Americas (DPA).
The alliance intends to implement in the Americas a number of joint ventures in the dairy field, subject to regulatory approval and other clearances. The joint ventures will cover a wide range of dairy products, including shelf stable as well as chilled refrigerated milk foods and beverages under existing brands of the two partners. The joint ventures will be managed by senior executives from both founding partners, reporting to a joint supervisory board of six members
- Nestlé joins alliance for responsible plant-based plastics
Nestlé has announced that it will work in partnership with the World Wildlife Fund (WWF) and seven consumer firms to encourage the responsible development of bioplastics, derived from plant materials. This alliance has the aim to guide the responsible selection and harvesting of agricultural materials. Because consumers are nowadays looking for responsible materials to consume in order to help the environment, this is an alliance that can be very important for Nestlé. It gives a better image to the customers that Nestlé is occupied with the environment and sustainability. It can be a competitive advantage depending on which market you're in depending on the competitors and whether they use sustainable programs etc.
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