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    Case Study Nestle

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    Ridwan Ridho Putera
    1. The document summarizes Nestle's global strategy, focusing on its expansion into developing markets. It traces Nestle's history from its founding in 1866 to becoming a global company with 500 factories in 76 countries by the 1990s. 2. Nestle faced challenges maintaining growth in saturated Western markets and competition from companies like Coca-Cola. Its strategy was to focus on emerging markets, adapting products to local conditions using local brands and flexible distribution methods. 3. The document analyzes Nestle's strategies in specific developing countries like Nigeria, China, and Poland through a SWOT framework, identifying strengths in diversification and flexibility, weaknesses in distribution risks, opportunities in customization, and threats from competition and supply

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    © All Rights Reserved
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    Case Study Nestle

    Uploaded by

    Ridwan Ridho Putera
    619 views5 pages
    1. The document summarizes Nestle's global strategy, focusing on its expansion into developing markets. It traces Nestle's history from its founding in 1866 to becoming a global company with 500 factories in 76 countries by the 1990s. 2. Nestle faced challenges maintaining growth in saturated Western markets and competition from companies like Coca-Cola. Its strategy was to focus on emerging markets, adapting products to local conditions using local brands and flexible distribution methods. 3. The document analyzes Nestle's strategies in specific developing countries like Nigeria, China, and Poland through a SWOT framework, identifying strengths in diversification and flexibility, weaknesses in distribution risks, opportunities in customization, and threats from competition and supply

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    Case Study Nestle by Ridwan & Yadi

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    1. The document summarizes Nestle's global strategy, focusing on its expansion into developing markets. It traces Nestle's history from its founding in 1866 to becoming a global company with 500 factories in 76 countries by the 1990s. 2. Nestle faced challenges maintaining growth in saturated Western markets and competition from companies like Coca-Cola. Its strategy was to focus on emerging markets, adapting products to local conditions using local brands and flexible distribution methods. 3. The document analyzes Nestle's strategies in specific developing countries like Nigeria, China, and Poland through a SWOT framework, identifying strengths in diversification and flexibility, weaknesses in distribution risks, opportunities in customization, and threats from competition and supply

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    619 views5 pages

    Case Study Nestle

    Uploaded by

    Ridwan Ridho Putera
    1. The document summarizes Nestle's global strategy, focusing on its expansion into developing markets. It traces Nestle's history from its founding in 1866 to becoming a global company with 500 factories in 76 countries by the 1990s. 2. Nestle faced challenges maintaining growth in saturated Western markets and competition from companies like Coca-Cola. Its strategy was to focus on emerging markets, adapting products to local conditions using local brands and flexible distribution methods. 3. The document analyzes Nestle's strategies in specific developing countries like Nigeria, China, and Poland through a SWOT framework, identifying strengths in diversification and flexibility, weaknesses in distribution risks, opportunities in customization, and threats from competition and supply

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 5

    Bandung, 14 Oktober 2014

    Nama Anggota:
    1. Yadi Mulyadi
    2. Ridwan Sukma Albusyaeri

    2401140110
    2401140109

    Kelas

    : MM Evening 1

    Tugas

    : Kasus Nestles Global Strategys

    1. Case Fact
    NESTLE COMPANY HISTORY

    The company was founded in Switzerland in 1866 by Heinrich Nestle than


    producing "milk food" or baby food made from milk powder, baked foods, and
    sugar.
    In 1868 founded the first foreign office in London
    In 1905 Nestle joined the Anglo Swiss Condensed Milk, thereby expanding
    business lines which include condensed milk and infant formula
    At the end of the 19th century established processing factories and condensed
    milk baby food in the United States and the United Kingdom and in the first three
    decades of the 20th century in Australia, eastern America, Africa and Asia.
    In 1929 the business moved to Nestle chocolate after acquiring Swiss chocolate
    maker, and 1938 who developed the most revolutionary product, the first Nescafe
    soluble coffee beverage in the world.
    Nestle continues to develop its business in the food business after World War II,
    primarily through the acquisition of Maggi (1947), Cross & Blackwell (1960),
    Findus (1962), Libby (1970), this Stauffer (1973), Carnation (1985), Rowntree
    (1988), and Perrier (1992).
    In the 1990s, Nestl has 500 factories in 76 countries and sells its products in 193
    countries surprisingly almost every country in the world. in 1998, the company
    generated sales approaching 72 billion SWF ($ 51 billion), only 1 percent of
    which occurred in his home country.
    Similarly, only 3 percent of the 210,000 employees are located in Switzerland.
    Nestle is the world's largest producer of infant formula, powered milk, chocolate
    instant coffee, soup, and mineral water. It was number two in the ice cream,
    breakfast cereals, and pet food. approximately 38 percent of the food that is made
    in Europe, 32 percent in the United States, and 20 percent in Africa and Asia.

    Nestle Challenge:

    1990s it faces significant challenges in maintaining its growth rate, in the markets of
    Europe and North America, where several countries stagnated growth and a decline in
    food consumption, and retail environments in many Western countries made a shift in
    large-scale producers of food and drink mermerek due to the discount supermarket
    chains and national. Especially in Europe that began there personal branding or
    labeling by some of the leading supermarket chains in Europe.
    The problem in Japan where the failure to adapt to conditions of local coffee brand,
    which means a significant loss of market opportunities
    In the west there is competition with coca cola. Coca cola capture 40% market share
    of the $ 4 billion market for canned coffee that year in Japan. Nestle failed to enter the
    market until the 1980s and only has a 4% market share

    How to Overcome the challenge:

    Nestle responded to the challenge to look towards emerging markets in Eastern


    Europe, Asia and Latin America that make a compelling business opportunity
    Nestle took 85% of the instant coffee market in Mexico, 66% of the milk powder
    market in the Philippines, and 70% of the soup market in Chile.
    Another strategy is to Nestle introducing more upscale products such as mineral
    water, chocolates, cookies and prepared foodstuffs so.
    Nestle has a strategy of "Customization rather than globalization is a key market for
    the company's strategy developing countries". By using a global brand and try to
    optimize materials and processing technologies to local conditions and then use a
    local brand names resonate.

    IMPLEMENTATION STRATEGY

    In Nigeria Nestle implement its strategy to overcome the obstacles that occur are:
    o For example, the system collapses, aging trucks and danger of violence to force
    companies to rethink traditional methods of distribution. Instead of a central
    warehouse operations, such as the preference in most countries, the company built
    a small network of warehouses across the country. For security reason, trucks
    carrying goods Nestle is allowed to travel only during the day and often under
    armed guard. marketing also poses a challenge in nigeria. with little opportunity
    for Western style typical in television ads or billboards, the company hired a local
    singer to go into the towns and villages offer a mix of entertainment and product
    demonstrations.
    In China Nestle had to wait 13 years of negotiations, and finally Nestle could widen
    its business in China which produces milk powder and infant formula 1990 The
    challenge remains inadequate local infrastructure, and Nestle strategy is to build its
    own distribution network known with "milky way", held between 27 plant collection
    point which is called "cold center". And Nestle pay incentives for farmers and an
    increase in the cattle population in the district.

    For Nestle strategy in the Eastern region which is only about 2% of sales and the
    market is very small individual with a long-term strategy is based on the assumption
    that regional conflicts will subside and intra regional trade will flourish.
    Nestle has established a network of factories in five countries with the hope of one
    day each will supply across the region with different products.
    Nestle makes strategy local materials and focuses on local demand, for example:
    o In Syria relies on tomato plants, Syria also produces grain that is a staple of instant
    noodles
    In Poland also Nestle implementing its strategy to enter the market or an emerging
    country, namely the collapse of communism and the opening of the Polish market, the
    level of income in Poland increases and so does the consumption of chocolate. 8% of
    the market is growing and in 1994 Nestle bought Goplana

    MANAGERIAL NESTLE

    For managerial Nestle managed local residents and regional organizations assist in the
    process of developing the overall strategy and is responsible for developing a regional
    strategy (an example would Nestl strategy in the Middle East, which has been
    discussed previously). Both SBU and regional managers, however, are involved in
    operations or strategic decisions locally on anything other than an extraordinary way

    2. Problems and Issues Identidication Base

    Problem Identification
    Nestle is a global company focused on the business lines that include healthy
    foods and beverages. By running time, 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. With the increasing growth of the company Nestle said on products
    distributed in the developing countries of the strength of Nestle in focus to the needs
    of local consumers, but Nestle is still lacking in terms of segmentation of each
    product significantly. Nestle just focusing incorporate its products to developing
    countries in order to remain a 'market leader'. So that it can allow for shakiness in the
    products produced by Nestle in the current main competitor entry into a country that
    has first call on Nestle, for example, like Cocacola.

    The Basic Issue


    How Nestle maintains the strategy with clearly segmentation to focus on developing
    countries as a multinational business?
    Nestle has an ability and flexibility strategy while the company will use the
    same global brand in multiple developed markets, in the developing country it

    focusses on trying to optimize ingredients and processing technology to local


    conditions and then using a brand name that resonates locally.
    3. Frame of thinking
    SWOT Analysis:
    The swot Analysis is part of a strategic planning process for small and
    medium sized organizations mostly (Houben, 1999). The analysis measures the
    company on two fronts; internal and external. In the internal area the strengths of the
    business and the weaknesses it posses in its own operations are analyzed while in the
    external analysis, the opportunities and threats faced by the business in its macro
    environment are analyzed.

    Strengths
    Nestle the multinational company with diversified line product can expand
    through developed and developing countries. With ability and flexibility strategy
    having a conviction to build long term and beneficial relationships with their
    stakeholders, comply with all legal requirements and ensure all activities that the
    business undertakes are sustainable and result in value creation for both the company
    and the society at large.

    Weaknesses
    This bussiness running with such big risk deals with nigerian and local pirate.
    For safety reasons, trucks carrying Nestle goods are allowed to travel only during the
    day and frequently under armed guard.

    Opportunities
    While the company will use the same "global brands" in multiple developed
    markets, in the developing world it focuses on trying to optimize ingredients and
    processing technology to local conditions and then using a brand name that resonates
    locally. Customization rather than globalization is the key to the company's strategy in
    emerging markets. Successful execution of the strategy for developing markets
    requires a degree of flexibility, an ability to adapt in often unforeseen ways to local
    conditions, and a long- term perspective that puts building a sustainable business
    before short-term profitability.

    Threats
    The food industry is probably one of the most saturated industries in the
    world. Keeping this in mind Nestle faces the very strong threat of competition. This
    competition can emerge both from international brands as well as local brands of the

    market in which Nestle enters and tries to operate. The rising prices of raw materials,
    fuel as well as the political instability in many third world countries where nestle has
    set up their production plants also threatens to cause unreliability in the supply line
    (Lin, 2007).

    4. Conclusion and Suggestion


    Nestle is a multinational company which is very prominent with his surefire
    strategies in entering new markets in every developed countries, but also some things
    that must be considered Nestle as its failure in Japan and in the West in the adjustment
    of the product.
    In our opinion, Nestle still have to improve the adjustment of product in each country
    with regard segmentation in each of its products to the distribution of a country, in
    order to steal the attention of customers and kelasakan growing market share in the
    country so that the status 'as a market leader' is always held by Nestle.

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