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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.