Nestle Case Study - Essay Example

Download file to see previous pages The paper will eventually conclude by offering recommendations based on the analysed findings, which will help in solving strategic problems that affect the company. Introduction The history of nestle company began in 1860s when a trained pharmacist named Henri Nestle began researching for healthy economical alternatives to breastfeeding for mothers who could not lactate due to various reasons. Henri Nestle began by carrying out experiments of various combinations of cow’s milk, sugar and wheat flour with an aim of curbing the problem of infant mortality caused by malnutrition. The outcome of Henri’s combination was called the New Product Farine Lactee Henri Nestle (Klopping, 2013). Nestle’s first customer was a premature infant who could not consume the breast milk or any other conventional substitute, and even the physicians could not solve the infant’s case. The infant’s positivity towards Henri’s food exposed the product to the people who had earlier had negative perceptions towards the product. The company began adding chocolate to its food lines and from then on, the product hit the European market. In 1874, Jules Monnerat purchased Nestle Company, and it began condensing its own milk production in order to compete with its then competitor the Anglo-Swiss Condensed Milk Company (Klopping, 2013). However, the rivalry ended when the two companies decided to merge in 1905. The newly formed company operated in Britain, Spain, USA and Germany, but several years down the line, the company ventured Far East towards Australia, India, Hong Kong and the general pacific. The onset of world War I brought along severe disruptions that interrupted the smooth running of businesses. For instance, acquiring raw materials and distributing products became extremely difficult leading to shortages in food supply, which led Nestle to purchase several factories in the US so as to meet up the demand for condensed milk and dairy products. This fostered business boom and by the end of the war, Nestle had made a good fetch. After the end of the World War, milk became available and the situation, combined with post War economic recovery led Nestle into dept slip. However, the company through the help of a baker strategized on ways to reduce debts, and in 1920, the company came up with another product line of new chocolate and powdered beverage product. In 1930, Nestle invented Nescafe and Nestea, which hit the market throughout even in the onset of World War II because Nescafe became a favourable beverage for servicemen in Europe and Asia (Smith, 2007). In 1947, the company continued to portray its progress by merging with Alimentana, a soups and seasoning manufacturing company. Prior to the food market, the company expanded by becoming a major stakeholder in L’Oreal cosmetics by the year 1974, but the progress was cut short later when Nestle suffered due to global economic crisis like hiking oil prices, unstable exchange rates, and the rise of raw material prices that included beans and cocoa. The situation forced Nestle to venture into Alcon Laboratories, Inc. In turn of events, Nestle’s food products faced an international boycott. The boycott arose after the company introduced its products to the developing countries where illiteracy was high and the misuse of formula was misused. Most mothers from these ...Download file to see next pagesRead More