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Nestle in the International Environment - Term Paper Example

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The author concludes that Nestle has been able to achieve its desired objectives as it has registered organic growth in its core business. The strategic decision to acquisition Novartis was well planned as they had already started investing in research and development in the nutrition sector. …
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Nestle in the International Environment
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Download file to see previous pages Nestle operates in many countries and cultures throughout the world. Being a consumer-driven company they tailor their products to suit the local tastes. As a part of their business development strategy, they listen to the consumers and interact with them for product development (NCBP, 2004). They carry out extensive consumer testing before launching any new product. They have been performing well above their targets.
Under the new leadership in 1997, the company focused on internal growth and they could succeed in achieving their targets for internal growth. They decided to eliminate the slow-growth components and increase the efficiency of manufacturing operations (Mudd, 2001). This is because they have a global strategy. They do not view centralization as an appropriate strategy for a food company. Nestlé saw organic growth in the Americas and Asia increased by 7.1% and 5.8% in the first quarter of 2009 while there was a decrease in the internal growth in Europe by 1.3 percent (DII, 2009).
The 20 largest food companies in the industry have just 8.3% of the $3.6 trillion of the food market (Mudd, 2001). This implies that the food industry has to be local. There are no global consumers; there are only local consumers. Whatever the consumer can see, feel, taste and experience has to be localized and all else can be globalized or centralized. They do not follow any company formula but make things that are suitable to the local environment. In the international market place brands have to compete not just with the local or national brands but with competitive international brands (Palumbo & Herbig, 2000). Moreover, brands names are difficult to standardize on a global basis but Nestle has a brand name that carries instant recognition. Standardization implies a product-oriented approach and is not customer focused. Nestle had expected that its brand image could infiltrate into China but they were unable to introduce coffee culture in China (Hara & Nakanishi, 2004).    ...Download file to see next pagesRead More
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