Nestle and drivers of international business case study

Nutrition, health and wellness strategy Case Solution Summary of the context of the case--drivers behind the NHW strategy: Moreover, its agenda is to increase the net revenues with continuous strong growth and differentiating the firm from others.

Nestle and drivers of international business case study

From its very early days, the company looked to other countries for growth opportunities, establishing its first foreign offices in London in Similarly, only 3 percent of itsemployees were located in Switzerland. It was number two in ice cream, breakfast cereals, and pet food.

Roughly 38 percent of its food sales were made in Europe, 32 percent in the Americas, and 20 percent in Africa and Asia.

The large Western European and North American markets were saturated. In several countries, population growth had stagnated and in some there had been a small decline in food consumption. The retail environment in many Western nations had become increasingly challenging, and the balance of power was shifting away from the large-scale manufacturers of branded foods and beverages and toward nationwide supermarket and discount chains.

Increasingly, retailers found themselves in the unfamiliar position of playing off against each other manufacturers of branded foods, thus bargaining down prices.

The results included increased price competition in several key segments of the food and beverage market, such as cereals, coffee, and soft drinks. The logic is simple and obvious—a combination of economic and population growth, when coupled with the widespread adoption of market-oriented economic policies by the governments of many developing nations, makes for attractive business opportunities.

Many of these countries are still relatively poor, but their economies are growing rapidly.

Nestle and drivers of international business case study

For example, if current economic growth forecasts occur, by there will be million people in China and India that have income levels approaching those of Spain in the mid s.

The goal is to build a commanding market position in each of these niches. As income levels rise, the company progressively moves out from these niches, introducing more upscale items, such as mineral water, chocolate, cookies and prepared foodstuffs.

Although the company is known worldwide for several key brands, such as Nescafe, it uses local brands in many markets. The company owns 8, brands, but only of them are registered in more than one country, and only 80 are registered in more than 10 countries.

In Nigeria, for example, a crumbling road system, aging trucks, and the danger of violence forced the company to rethink its traditional distribution methods. Instead of operating a central warehouse, as is its preference in most nations, the company built a network of small warehouses around the country.

Marketing also poses challenges in Nigeria. With little opportunity for typical Western-style advertising on television or billboards, the company hired local singers to go to towns and villages offering a mix of entertainment and product demonstrations.

China provides another interesting example of local adaptation and a long-term focus. Farmers brought their milk— often on bicycles or carts—to the centers where it was weighed and analyzed.

Suddenly the farmers had an incentive to produce milk, and many bought a second cow, increasing the cow population in the district by 3, to 9, in 18 months. Companies often had to invest in infrastructure that we now take for granted to get production off the ground. Intons of powdered milk and infant formula were produced.

Byoutput exceeded 10, tons, and the company decided to triple capacity. The company currently makes ice cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria.

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The Syrian factory, for example, relies on products that use tomatoes, a major local agricultural product. Syria also produces wheat, which is the main ingredient in instant noodles. By using local inputs and focusing on local consumer needs, it has earned a good rate of return in the region, even though the individual markets are small.

In the s, cold canned coffee which can be purchased from soda vending machines started to gain a following in Japan. In contrast, Coca-Cola entered the market with Georgia, a product developed specifically for this segment of the Japanese market. By leveraging its existing distribution channel.

Coca-Cola captured a canned coffee in Japan. With the collapse of communism and the opening of the Polish market, income levels in Poland have started to rise and so has chocolate consumption. Once a scarce item, the market grew by 8 percent a year throughout the s.

Still, competition in the market is intense. 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.

At the same time, the company is organized into seven worldwide strategic business units SBUs that have responsibility for high- level strategic decisions and business development.

For example, a strategic business unit focuses on coffee and beverages. Another one focuses on confectionery and ice cream. These SBUs engage in overall strategy development, including acquisitions and market entry strategy.

Running in parallel to this structure is a regional organization that divides the world into five major geographical zones, such as Europe, North America, and Asia. Neither the SBU nor regional managers, however, get involved in local operating or strategic decisions on anything other than an exceptional basis.

Selected primarily on the basis of their ability, drive, and willingness to live a quasi-nomadic lifestyle, these individuals often work in half a dozen nations, during their careers.Case Studies To create value for our shareholders and our company, we must create value for people in India too.

This includes the farmers who supply to us, the employees who work for us, our consumers and the communities where we work. Sep 02,  · Nestle And Drivers Of International Business Case Study – Accueil › Forums › Forum › Nestle And Drivers Of International Business Case Study – Ce sujet a 0 réponse, 1 participant et a été mis à jour par downnowilysup, il y a 5 mois et 3 semaines.

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Nestle wants to expand its business by creating another product that is instant coffee and instant noodles were developed by the R & D group Nestle.

Problems and Issues Identidication Base Problem Identification Nestle is a global company focused on the business lines that include healthy foods and beverages. namely the collapse of communism. Hence, we are expanding these new business models, focusing strongly on our direct‑to‑consumer models, as well as partnering with key online retailers around the world.

Increasing efficiency Nestlé is committed to margin expansion.

Nestlé case study | Faculty of Medicine | Imperial College London