Essay about Executive Summary on Nestle

3112 Words Mar 18th, 2011 13 Pages
Executive Summary
Nestle was founded in 1866 by Henri Nestle. It started off with one man’s initiative to produce infant formula (for infants who are intolerant to their mothers’ milk) and grew into a multi- national cooperation worldwide. Nestle has more than 250,000 employees worldwide and factories all around globally.

The infant product was so successful that it created demand all over Europe. Eventually this success brought in many business joint ventures and the company underwent many name changes along the way. Nestle started to enhance its product varieties and started to introduce baby cereals, breakfast cereals, chocolates, bottled drinks, beverages, ice creams, dairy products, food seasoning , pet food and many more. The
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Capture larger customer base to achieve economic of scale
Due to market saturation and increased competition in the European and North American markets, Nestle started to focus on emerging markets. Apart from the Asian countries, Nestle also penetrated into Russia and China, seeing a huge potential for investment in these markets. This is largely due to Russia and China’s past political system which was initially closed to foreign investments. Nestle has seven different worldwide strategic business units whose responsibility is to engage in overall business developments, including acquisitions and market entry strategies. Nestle success in global penetration is due to its ability to adapt to local conditions. The company’s organisational structure is also highly decentralised.

2.0 Economic Environment
Nestle good business strategy has harvested good returns in the economic environment. A look at the past 10 years since 1999 reflects growth in spite of difficult times. In 1999, though the economic environment in Eastern Europe and South America was bad, Nestle continued to cumulate real internal growth at 3 percent as at October 1999. In year 2000, there was an increase of 11 percent over the corresponding period of the previous year. One of the reasons for the growth is Nestles’ joint ventures, Alcon and the water business contributed to the good real internal growth. Nestle continued to deliver strong sales and earnings

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