Md.

Jubair Bin Kibria

3-09-17-022
Md. Sayful Islam
3-09-17-020
Qulsum Akter
3-10-18-042
Tahmina Akter
3-08-14-008

Nestle – Global Strategy

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 Nestle
• Nestlé was founded in Switzerland
in 1866 by Heinrich Nestlé
• Establishing its first foreign offices
in London in 1868
• In 1905, the company merged with
the Anglo Swiss Condensed Milk,
thereby broadening the company’s
product line to include both
condensed milk and infant
formulas

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Nestle (Contd.)
• Nestlé established condensed milk and infant food
processing plants in the United States and Great Britain in
the late 19th century.
• In Australia, South America, Africa, and Asia in the first
three decades of the 20th century

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Nestle (Contd.)
• In 1929, Nestlé moved into the chocolate business when it
acquired a Swiss chocolate maker
• In 1938 by the development of Nestlé’s most revolutionary
product, Nescafe, the world’s first soluble coffee drink

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 Nestle History & Products

1866-1918 1918-1944 1944-1975 1975-1981 1981-1996 1996-Now

Food Chocolate,
Products for Coffee & Fast Food Fast Food Yogurt &
Ice Cream
babies & Fresh Maggi Products Beverage
Powder Milk Milk

Nan, Lactogen,
Neslac,
Kit Kat,
Maggi, Buitoni, Stouffer’s, Lean Yougart,
Nestlé, Mega,
Smarties, Polo, Cuisine, Hot Nestea,
Nestum, Good Thomy, Mövenpick,
Nescafé, Pockets, Herta, Nesquik,
Start, Nido, Winiary,Torchin Non Stop
Nespresso Toll House Nescau, Milo
Nespray

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Nestle Acquisition
After World War II, Nestlé continued to expand into other areas
of the food business, primarily through a series of acquisitions
that included
• Maggi (1947)
• Cross & Blackwell (1960)
• Findus (1962)
• Libby’s (1970)
• Stouffer’s (1973)
• Carnation (1985)
• Rowntree (1988) and
• Perrier (1992)

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Nestle Facts & Figures
By the late 1990s, Nestlé had
• 500 factories in 76 countries
• Sold its products in 193 nations—almost every country in
the world.
• In 1998, the company generated sales of close to SWF 72
billion ($51 billion),
• Has 210,000 employees worldwide
• Nestlé was the world’s biggest maker of infant formula,
powdered milk, chocolates, instant coffee, soups, and
mineral waters.
• It was number two in ice cream, breakfast cereals, and pet
food.

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Market Focus
Nestle operates worldwide with a focus on
European markets

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Challenges of 21st century
• Western & European markets were in the mature state of
life cycle of that industry
• Stagnation of population growth rates
• Consumer tend to spend less while demanding at the
same time for customization, product differentiation and
specialization.
• Raise of nationwide supermarket and discount chain
• Increasing non-brand cheap products offered by rivals.
(Food Lion)

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Global Strategy
Nestles strategy has been to look towards the emerging
markets in Eastern Europe , Asia & Latin America.

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Global Strategy
Nestles strategy has been to look towards the emerging
markets in Eastern Europe , Asia & Latin America.

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Global Strategy
Nestles strategy has been to look towards the emerging
markets in Eastern Europe , Asia & Latin America.

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 Reasons
• A combination of economic
and population growth,
when coupled with the
widespread adoption of
market oriented economic
policies by the
governments of many
developing nations makes
attractive business
opportunities

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 Reasons (Contd.)
• Most of these developing countries are yet in a growth
cycle and their markets are untouched.
GNI Per Capita VS Time
2009

2000 India
China
1995
Spain
1990

0 10000 20000 30000 40000

According to current economic forecasts by the end of 2010 there will be 700
million people in China & India that have income levels approaching those of
Spain in the mid 1990s

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 Reasons (Contd.)
• As income levels rise, it is increasingly likely that
customers in these nations will start to substitute branded
food products for basic food stuffs, creating a large
market opportunities.
• Build up market share by penetrating new markets and
using its profits to defend its old markets in the western
economies through low prices
Country First Presence No. of Factories
Thailand 1893 6
Malaysia 1912 6
Vietnam 1916 3
Indonesia 1971 3
Philippines 1985 4

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Corporate Level Strategy
• Entering emerging markets before competitors such as
Unilever and build a substantial position
• Narrow down initial market focus to just a handful strategic
barrier. Because
– Simplify life
– Reduce risk
– Concentrate marketing resources and managerial effort on limited
number of key niches like infant formula and condensed milk

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Corporate Level Strategy (Contd.)
• The goal is to build a commanding market position in each
of the niches. By pursuing the such a strategy Nestle has
taken
– 85% of the market of instant coffee in Mexico
– 66% of the market of powdered milk in Philippines
– 70% of the market of soups in Chile.
• Nestle purchases popular local brand names and thus
– Saves the costly process of establishing a brand name
– Rise above cultural barriers
– Overcomes customer resentments to foreign brands
• As income levels rise the company progressively moves
out of from their niches, introducing more upscale items
such as mineral water, cookies & prepared food stuffs

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Corporate Level Strategy
• Although the company is known worldwide for several key
brands, such as Nescafe
• The company owns 8,500 brands
– only 750 of them are registered in more than one country
– only 80 are registered in more than 10 countries
• 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.

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General Strategy (Contd.)
• Customization rather than globalization is the key to the
company’s strategy in emerging markets.

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Marketing Strategy Process
1. Strategic Situation Analysis
2. Designing Marketing Strategy
3. Marketing Program Development
4. Implementing & Managing Marketing Strategy

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 Nestle Strategy - Nigeria
Challenges
• Crumbling road system
• Age old transportation
• Danger of violence
• Little opportunity for typical Western-style
advertising

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Nestle Strategy – Nigeria (Contd.)
Strategy
• Operating through network of warehouse
• Nestlé goods travel only during the day and
frequently under armed guard
• Advertizing through local singers

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Nestle Strategy - China
Strategies
• Establish Milk Road between 27 villages to solve
transportation problem.
• Set up factory collection points, called chilling
centers
• Prompt payment to the farmers
• Introducing dedicated transport to improve milk
supply

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Nestle Strategy – China (Contd.)
Outcome
• Overwhelming local supply of milk resulted
Nestle tripled its powdered milk capacity.
• Was aiming toProduction
Milk generate sales of $700 million by
VS Time
2000. 40000

20000
Ton
0
1990 1994 2000

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Nestle Strategy – Middle East
Nestle established factories in five different
county in the middle east to achieve scale
economy
1.Ice-cream in Dubai
2.Soap & Cereals in Saudi Arabia
3.Yogurt & bouillon in Egypt
4.Chocolate in Turkey
5.Ketchup & Noodles in Syria.

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Nestle Strategy – Japan
Nestle
Coca-cola
• Declined to enter
canned coffee market
• Failed to enter the
market until the 1980s
• Has only 4% of the
market share
• Entered the market with
Georgia
• Leveraged its existing
distribution channel.
• Grabbed 40% of the
market share
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Nestle Strategy – Poland
• Entered in 1994 by purchasing Goplana, the
country’s second largest chocolate manufacturer
• Perused strategy of evolution over revolution to
gain competitive advantage, which includes
– Keeping the top management of the company staffed
with locals
– Adjusting Goplana’s product line to better match local
opportunities
– Pumping money into Goplana’s marketing

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Management Structure &
Responsibilities
• High-level strategic decisions
• Business development
SBU • Acquisition decision & strategy
• Market entry strategy

• Assist in the overall strategy

Regional development process
• Developing regional strategies
Organization

• Pricing
• Distribution
Local Unit • Marketing
• Human resources

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Management Strength

Experienced
Highly
educated

Trained

“Expatriate Army” - group

of about 700 managers

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Management Development
Programs (MDP)
• Nestle has international training
center at Rive-Reine, in
Switzerland
• MDP gives managers
– Better understanding of Nestlé’s
culture and strategy
– Access to the company’s top
management.

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R&D Operation
• The R&D function comprises 18 different groups
that operate in 11 countries
• Spends approximately 1 percent of its annual
sales revenue on R&D
• Has 3,100 employees dedicated to the function
• Around 70 percent of the R&D budget is spent
on development initiatives

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Nestle Bangladesh
• Nestlé Bangladesh Limited started its first
commercial production in Bangladesh in 1994
• In 1998. Nestle S.A. fully owned Nestlé
Bangladesh by taking over the remaining 40%
share from the local partner.
• Nestle factory is situated at Sripur, 55 km north
of Dhaka.
• The factory produces instant noodles, cereals
and repacks milks, soups, beverages and infant
nutrition products

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?? Question ??

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