Nestle. Case study презентация

Cunningham, Xiaoya Li

headquarterd in Vevey, Switzerland

Nestle originated in a 1905 merger of the Anglo-Swiss Milk Company which was founded by Henri Nestle in 1866

Company grew significantly during the WWI and WWII

Operates in 86 countries

Employees 283,000 individuals.

Profit 10.43 billion

Total Assets 110.9 billion

Total Equity 53.63 billion (2009)

across a number of markets including:

coffee
bottled water
other beverages
chocolate
ice cream
infant foods
confectionary
pet food
…

first foreign offices in U.S.A and Great Britain in the late 19th century
Australia, South America, Africa and Asia in the first three decades of the 20th century.
By the late 1990s, Nestle had 500 factories in 76 countries, sold products in 193 nations
3% of its employees are located in Switzerland

markets?

Infrastructure / Political difficulties ?!

Nestlé Emerging Markets Division imports products from more than 20 countries, and exporting products to more than 40 countries.

the rate of the company’s total revenue

Sales from those regions totaled $33.15 Billion, more than any rival.

increase their incomes enough to be able to afford Nestle products within the next decade.

1/3 of its revenue from emerging economies and aims to lift that to 45% within a decade.
- CEO Paul Bulcke

its majority stake in Alcon, the maker of Opti-Free contact lens cleaners, giving it a cash pile exceeding the $26.5 billion that Google had on its books at the end of March. The Swiss company is starting a new 10 billion-franc buyback programme, though Nestle would rather invest in its business or make acquisitions”
CFO Jim Singh said on June 22

such as China”
Frits van Dijk, head of Nestle’s Asian business, on June 22.
“Acquisitions would also be considered to expand its business selling nutrition products for athletes, such as PowerBar”
Nestle Nutrition CEO Richard Laube

Start cheap and introduce luxury later

was able to achieve to react as quickly as possible to changing environments.

As a consequence, company was able to respond to changes in local demand, cultural barriers and political fluctuation.

Ethnocentric behavior must be avoided in any circumstances in order to approach the market in the appropriated .

fact that the consumer is easier to reached because he is accustomed to this brand name and they think they know what they are buying.

The Nestle strategy was to be cultural awareness, which means a company should employ locals in order lower cultural barriers and resentments established by the foreigner.

Nestle believes that, the key to their success is customization rather than exaggerated globalization.

and villages offering a mix of entertainment and product demonstrations.

In China: Nestlé established its own distribution network, known as milk roads.

Executing the strategy

advantage, local economies, global web, economies of scale
Strong local responsiveness, but production, training, and R&D becoming centralized
Management practices – spread knowledge, create learning effects, and transfer core competencies
“Glocal” philosophy and creating value

(worldwide production divisional structure)
Five regional units by geography (worldwide area structure)
Has created a global matrix structure
Example of a global matrix structure:

tighter integration at matrix points

Focus on healthier, more nutritious products
Raise revenue from developing countries from 33% to 45% of total revenue within 10 years
Will receive $28.1 billion for its stake in Alcon