This website uses cookies to ensure you have the best experience. Learn more

Nestlé: Sustaining Growth In Mature Markets

3631 words - 15 pages

Nestlé: Sustaining Growth in Mature Markets
Nestlé was first founded by Henri Nestle in the 1860s by developing and producing food products for babies who could not adapt mother’s milk. Following the success in baby food products, Henri incorporated with an Anglo-Swiss condensed milk company to develop dairy products, especially for government supply in World War I. High sensitive and quick responding to the demand of consumer, Nestle continued to create and develop new product mix to canned food, beverage, pet care products, to maximize its scope of business in the food segment. 
Nestle had been incurring high success during its operation in food industry, proved by production many ...view middle of the document...

CEO Brabeck realized the need of Nestle and his first priority was to achieve real internal growth. Strategies were employed to achieve this organic growth and now Nestle is posting CHF $91 billion in sales and CHF $8 billion in profits. Brabeck’s will hand over the company in 2008 and his successor will be facing the task of maintaining the successful momentum. This uncertainty about the future of the company is left to be seen and is the driving factor to the question: Can Nestle sustain its industrial growth in Mature Markets under the new CEO Paul Bulcke or would the growing competitive pressure shrink its overall growth.
To answer this question, an in-depth analysis must be undertaken to understand the external environment that Nestle is operating in by looking at the General, Industry, and Competitor environment and also a microscopic look into Nestle internal environment.
The general environment of Nestle looks at the demographic trend. Nestle international operations are in 77 countries with over 400 plus plants and their products are sold on all six continents. The world population is increasing on a daily basis and the geographic distribution of populations is shifting. The world population is also aging quickly and the ethnic mixes in developed countries are changing rapidly. The average household incomes are increasing and Nestle could take advantage of these trends. The demographic environment presents both opportunities and threats for Nestle. The increases in population size and household incomes would help to expand the market in which Nestle operates. However, changes in the geographic distribution of populations, due to technological advances in communications, may cause difficulties for nestle in determining profitable locations for new plants.
The economic trend shows that the average market growth of a mature global food industry is 2 percent. Nestle first achieve a four percent internal growth target in 2000 and consistently repeated performance in subsequent years. This growth might be contributed by the economic global trend. The U.S economy decline into recession in 2001 and in order to stimulate the economy, interest rates in United States were cut to near record lows. Many nations around the world are affected by the U.S economy and Nestle Global companies are no exceptions. The economic trend showed in 2005 that there was significant economic growth due to very low interest rates in the United States, resulting in substantial growth in global trade. This growth was slow down by high oil prices. The economic environment presents both threats and opportunities for Nestle. The growth in global trade presents opportunities for Nestle in innovation and renovation of new and old products to offer to its customers. However, the increase in oil prices would cause an increase in the cost of transportation for goods destined for Nestle plants which would threaten Nestle profitability.
Operating in...

Other Papers Like Nestlé: Sustaining Growth in Mature Markets

To What Extent Is Targeting Emerging Markets For Sales The Best Way For Businesses To Achieve Major Growth In Their Profits?

579 words - 3 pages may have a better chance at building lasting relationships with customers, increasing profits in the long run. Access to new capital is what drives many businesses to take on the risks of doing business in emerging markets. As new economies emerge, untapped capital is up for grabs and building and maintaining a pipeline to those funds helps companies not only expand abroad, but also bring in new resources for domestic growth. Emerging market

Nestle Global Management Essay

2545 words - 11 pages , and to be the reference for financial performance in its industry (“The Nestle Roadmap”). Nestlé has developed corporate and competitive strategies that are aimed to help them reach this mission. On the corporate level, the company actively seeks to increase the number of products offered by using a growth strategy. Nestlé knows the power of brands and owns some of the most well-known brands in a range of products. They are continually trying to

1. Did Nestle Undergo Either First-Order And Or/ Second Order Change According To The Case? Answer, Listing Example Of Types Of Change From The Above Story?

7146 words - 29 pages of local companies Benefi ting local economies Nestlé in the community: reaching out beyond our business Consistent, sustainable growth People are Nestlé’s greatest asset Wide variety of career opportunities How our business is organised Other Nestlé Group companies The world of Nestlé 52 Nestlé website and Nestlé publications Website and publications 36 37 38 40 41 42 43 1 2 Welcome to Nestlé The aim of

Strategic Management

5392 words - 22 pages different in the geographical taste.2.2 Economic SegmentAlthough Nestlé is leading food industry, it shares its knowledge and expertise with localsmall and medium companies. It helps entrepreneurs to compete in the new free tradeenvironment which will ultimately benefit the industry and the economy by making themarket growth. Besides that, Nestlé also collaborates with local government to providetechnical assistance to farmers in planting and

Nestle Report

3375 words - 14 pages become market leader in the water industry. The customers of NPL showed interest on NPL because of trust on Quality of Nestlé, at the heart of which there are qualitative products and its long term commitment to deliver better products to consumers. Being the market leader, the market share of NPL is 78% that is much higher than its competitors. NPL is passing through its Growth stage (of Product Life Cycle) i.e. its sales are increasing

Nestle Best Practices

1840 words - 8 pages Business principles in action nutritional labelling Introduction Consumers have higher expectations than ever before. They want products to match these expectations. They also want accurate, up-to-date and useful information about what they buy. In short, consumers want the facts. This growth of consumer power is known as consumerism. CURRICULUM TOPICS • Market orientation • Business ethics • Business communications

Term Paper

3788 words - 16 pages Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974. 1975-1981 Nestlé's growth in the developing world partially offset a slowdown in the Company's traditional markets. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc.. 1981-1995 Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions


3288 words - 14 pages investment (FDI) in milk, dairy, beverages and other food businesses. Nestlé has an objective to balance sales obtained from low risk and low growth countries of the developed world with high risk and potentially high growth markets of underdeveloped or developing countries i.e. Africa and Latin America. Nestlé identifies the potential profits from these high-risk countries, but doesn’t take unnecessary risks just for the sake of growth. This strategy and

Operatiom Management

4151 words - 17 pages stockholder in L’Oréal cosmetics in 1974. Soon after the company suffered with increasing oil prices and the slowing growth in industrialized countries. Foreign exchange rates decreased, in turn reducing the value of sterling, the pound, dollar and franc. Prices of coffee beans and cocoa rose radically, presenting further problems for Nestlé. The company decided to venture into the pharmaceutical industry by acquiring Alcon Laboratories, Inc. While trying

Nespresso Company Backgrounder

1257 words - 6 pages estimated 1-2 % of the coffee grown globally meets our specific taste and gourmet aroma profiles and our high standards coffee 10-20% of quality and sustainability. Nespresso Commercial grades 10% of the world's green coffee crop 1-2% performanCe Nespresso performed strongly in 2012, delivering solid double-digit growth. The company cemented its position in its mature European markets and expanded its presence in the strategic Asia


3026 words - 13 pages INTRODUCTION OF NESTLE Nestle is the leading FMCG company of Switzerland established by Henri Nestle. Nestle is serving worldwide with its more than 500 factories in 86 countries comprising almost all continents. Nestlé’s product portfolio is more than 500 products all over the world serving best to their customers. Henri Nestlé endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird

Related Essays

: Sustaining Growth In Mature Markets

1219 words - 5 pages Discuss the Vision and Mission of Nestle and the fundamental principles that guide the company's strategy. "At Nestlé, we believe that research can help us make better food so that people live a better life. Good Food is the primary source of Good Health throughout life. We strive to bring consumers foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In addition to Nutrition, Health and Wellness

Nestle Mature Markets Growth Essay

1166 words - 5 pages NESTLE’: SUSTAINING GROWTH IN MATURE MARKETS 1. Describe the characteristics of each of the following elements in the Current Competitive Landscape: a. Globalization - Nestle’operates in 77 countries and sells its products in all 6 continents. Its global position is further enhanced by acquisition of companies which have an established global presence. b. Technology – As part of the GLOBE initiative, Operation Excellence

Eastman Kodak: Competing In Mature Markets

3153 words - 13 pages : The Battle for Global Market Share - Thomas C. Finnerty a doctoral candidate in the Doctoral of Professional Studies Program, Lubin School of Business, Pace University, New York.Product-Line Competition: Customization vs. Proliferation - Haim Mendelson, Ali K. ParlaktÄurk. Graduate School of Business, Stanford University, Stanford, CaliforniaEastman Kodak: Competing in Mature Markets- Alexander Chernev, Kellogg School of

Nestle’s Sustainable Growth In Mature Market

1559 words - 7 pages the developed world and high risk and potentially high growth markets of Africa and Latin America. Nestlé recognizes the profitability possibilities in these high-risk countries, but pledges not to take unnecessary risks for the sake of growth. This process of hedging keeps growth steady and shareholders happy. When operating in a developed market, Nestlé strives to grow and gain economies of scale through foreign direct investment in big