The Strategy Story

Nestle PESTEL Analysis

nestle case study analysis

Before we dive deep into the PESTEL analysis, let’s get the business overview of Nestle. Nestlé S.A. is a Swiss multinational food and beverage company considered one of the largest in the world. Here is a brief overview of their business:

Foundation and History:  Nestlé was founded in 1866 by Henri Nestlé in Vevey, Switzerland. Initially, the company specialized in selling infant cereal, but over the years, it expanded its product portfolio through a series of acquisitions and brand developments.

Product Portfolio:  Nestlé has a diverse product range covering various categories such as dairy products, beverages, processed food, confectionery, infant nutrition, health science, and pet care. The company owns several well-known brands, including Nescafé, Kit Kat, Smarties, Nespresso, Stouffer’s, Gerber, Purina, and Maggi, among others.

nestle case study analysis

Operations:  Nestlé operates in nearly every country globally, with over 400 factories across different continents. This vast presence enables the company to cater to various consumer tastes and preferences.

Sustainability and Corporate Social Responsibility:  Nestlé has committed to several sustainability initiatives, such as aiming for zero environmental impact in their operations by 2030 and using more recyclable packaging. The company also invests in various corporate social responsibility initiatives in nutrition, water, rural development, and responsible sourcing.

Future Direction:  The company continuously invests in research and development to create new products and improve existing ones. As consumer preferences shift towards healthier and more sustainable products, Nestlé is focusing on improving the nutritional value of its products and reducing its environmental footprint.

Financial Performance 2023 : Total reported sales were CHF 93.0 billion, a decrease of 1.5% (FY-2022: CHF 94.4 billion).

Good food, Good growth: Nestle’s way of doing business!

Here is the PESTEL analysis of Nestle

A PESTEL analysis is a strategic management framework used to examine the external macro-environmental factors that can impact an organization or industry. The acronym PESTEL stands for:

  • Political factors: Relate to government policies, regulations, political stability, and other political forces that may impact the business environment. 
  • Economic factors: Deal with economic conditions and trends affecting an organization’s operations, profitability, and growth. 
  • Sociocultural factors: Relate to social and cultural aspects that may influence consumer preferences, lifestyles, demographics, and market trends.
  • Technological factors: Deal with developing and applying new technologies, innovations, and trends that can impact an industry or organization. 
  • Environmental factors: Relate to ecological and environmental concerns that may affect an organization’s operations and decision-making.
  • Legal factors: Refer to the laws and regulations that govern businesses and industries. 

In this article, we will do a PESTEL Analysis of Nestle.

PESTEL Analysis Framework: Explained with Examples

  • Regulatory Compliance:  Given its global presence, Nestlé must comply with various food safety, labeling, and product regulations across different countries. Any changes in these regulations can significantly impact Nestlé’s operations, costs, and strategies.
  • Political Stability:  Political stability in a country or region can significantly impact Nestlé’s operations. Political instability or conflicts can disrupt supply chains, production, or market access. Conversely, political stability can offer a conducive environment for business operations and growth.
  • Trade Policies:  Tariffs, import/export restrictions, and other trade policies can impact Nestlé’s business. For instance, changes in international trade agreements could impact the costs of raw materials or finished products, affecting the company’s profit margins.
  • Tax Policies:  Changes in corporate tax policies in the countries where Nestlé operates can impact its financial performance. For example, increased corporate tax rates could reduce the company’s net profits.
  • Government Initiatives:  Government initiatives can either positively or negatively affect Nestlé. For instance, government programs promoting healthy eating could impact the demand for some of Nestlé’s products. Conversely, subsidies or incentives in agriculture could lower costs for some raw materials.
  • Geopolitical Issues:  These could also have an impact on Nestlé’s operations. This includes Brexit, international relations, and other geopolitical shifts that could affect the company’s access to certain markets or its supply chain.
  • Global and Regional Economies:  The overall health of the global economy and specific regional economies can significantly impact Nestlé. Economic downturns or recessions may reduce consumer spending, affecting demand for Nestlé’s products. Conversely, economic growth can increase demand.
  • Exchange Rates:  As a multinational company operating in numerous countries, Nestlé deals in multiple currencies. Fluctuations in exchange rates can affect the company’s revenues, costs, and profits. For example, a strong Swiss Franc (Nestlé’s reporting currency) can reduce the value of sales and profits made in other currencies.
  • Inflation Rates:  Changes in inflation rates can affect both the cost of raw materials and consumers’ purchasing power. High inflation can increase costs and reduce demand if consumers cannot afford products.
  • Interest Rates:  Interest rates can impact Nestlé’s cost of capital. For instance, high-interest rates can increase the cost of borrowing for capital investments, while low-interest rates can make borrowing cheaper.
  • Unemployment Rates:  High unemployment rates can reduce consumer spending power, which may affect the demand for Nestlé’s products. Conversely, low unemployment rates might increase consumer spending, potentially boosting sales.
  • Consumer Confidence:  This measures how optimistic consumers are about their financial future. When consumer confidence is high, consumers are more likely to spend on non-essential goods, potentially benefiting companies like Nestlé.
  • Nestle’s Marketing Strategy of Expertise in Nutrition
  • Nestle SWOT Analysis

Sociocultural

  • Changing Consumer Preferences:  Consumer tastes and preferences are constantly changing. Trends such as health consciousness, organic products, and plant-based diets could impact the demand for various Nestlé products. Nestlé must anticipate and adapt to these changes to stay relevant.
  • Demographics and Lifestyle:  Age distribution, income levels, and lifestyle changes can influence the demand for Nestlé’s products. For example, an aging population might boost the demand for health and wellness products, while rising income levels could increase the demand for premium products.
  • Cultural Sensitivities:  As a global company, Nestlé operates in diverse cultures. Understanding cultural sensitivities, local customs, and tastes is crucial for product development, marketing, and overall business strategy.
  • Social Awareness and Ethics:  Consumers are increasingly concerned about ethical issues such as sustainability, fair trade, and animal welfare. Nestlé’s practices regarding these issues can affect its brand image and consumer loyalty.
  • Consumer Health Consciousness:  There’s a growing trend of health consciousness among consumers globally. People are becoming more aware of nutritional value and are often willing to pay premium prices for healthier alternatives. This trend influences the demand for Nestlé’s healthier and ‘better-for-you’ product ranges.
  • Attitudes towards Foreign Companies:  In some markets, consumers may prefer local brands or negatively perceive foreign companies. This can affect Nestlé’s market share and performance in these regions.

Technological

  • Production Technology:  Technological advances can improve efficiency, cost savings, and quality control in Nestlé’s manufacturing processes. This includes things like automation, AI, and other advanced manufacturing technologies.
  • Supply Chain and Logistics Technology:  Technology can significantly enhance supply chain and logistics management, leading to cost savings, better inventory management, and improved efficiency. Technologies such as IoT, blockchain, AI, and machine learning can significantly improve these areas.
  • Digital Marketing:  The rise of digital marketing and social media has transformed how companies interact with customers. Nestlé can leverage these platforms for advertising, customer engagement, brand awareness, and market research.
  • E-commerce:  The growth of online retail has created new sales channels for Nestlé’s products. This could affect Nestlé’s sales strategies and distribution channels.
  • Research and Development:  Technological advancements can support Nestlé’s research and development activities, leading to the development of new products or improvements to existing ones. This could be crucial for staying competitive and meeting changing consumer needs.
  • Data Analysis and Forecasting:  Technology has improved companies’ ability to collect, analyze, and use data. This can help Nestlé better understand market trends, consumer behavior, and operational performance, aiding in strategic decision-making.
  • Sustainability Technology:  Technological innovations can also contribute to sustainability efforts, an area of increasing importance for businesses. This could include technologies for reducing energy usage, waste, and emissions in production processes or creating more sustainable packaging.

Environmental

  • Climate Change:  Climate changes can affect the availability and cost of key raw materials for Nestlé, such as cocoa, coffee beans, and milk. This could impact the company’s supply chain and product costs.
  • Sustainability:  There’s a growing expectation from consumers, governments, and investors for businesses to operate sustainably. Nestlé’s strategies around waste management, energy use, water conservation, and sustainable sourcing can impact its brand reputation and compliance with regulations.
  • Packaging:  Nestlé, like other food and beverage companies, uses a lot of packaging for its products. The environmental impact of packaging is a significant concern, leading to regulations and consumer demand for more sustainable packaging solutions.
  • Regulations:  Environmental regulations can affect various aspects of Nestlé’s operations. This could include regulations around emissions, waste disposal, water use, and the use of genetically modified organisms (GMOs) in products.
  • Biodiversity:  Companies are increasingly expected to consider their impact on biodiversity. For Nestlé, this could relate to the sourcing of raw materials and the impact of its operations on local ecosystems.
  • Natural Disasters:  Natural disasters, which may be exacerbated by climate change, can disrupt Nestlé’s operations, including production facilities and supply chains.
  • Food Safety Regulations:  As a food and beverage company, Nestlé must comply with stringent food safety regulations in all its countries. These regulations cover product quality, ingredients, labeling, and packaging. Non-compliance can lead to fines, recalls, or damage to the company’s reputation.
  • Employment Laws:  Employment laws vary significantly across countries. These laws cover wages, working conditions, diversity, and employee rights. Nestlé must adhere to these laws to avoid legal issues and maintain a positive corporate image.
  • Environmental Laws:  Nestlé must comply with environmental laws related to waste disposal, emissions, energy use, etc. These laws can influence Nestlé’s production processes, costs, and sustainability initiatives.
  • Trade Regulations:  International trade regulations affect how Nestlé imports and exports goods across borders. Changes in tariffs, customs regulations, and trade agreements can impact Nestlé’s supply chain and profitability.
  • Advertising Laws:  There are laws and regulations governing how products can be marketed and advertised, which Nestlé must follow. Non-compliance could lead to legal consequences and harm the company’s reputation.
  • Intellectual Property Laws:  Nestlé, like any company, must manage its intellectual property rights, such as trademarks, patents, and copyrights. It must also ensure it does not infringe on the intellectual property rights of others.

Check out the PESTEL Analysis of Global Businesses

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How Nestlé Became The World's Largest Food Company

Table of contents.

Let’s trace the origins of Nestlé and its exceptional legacy of 150+ years that have led it to become a company with:

  • Market cap of $326.07 Billion as of Feb 9, 2023
  • Over 2000 brands worldwide
  • Monumental presence in 186 countries
  • A workforce of nearly 276,000 employees
  • Revenue of CHF 87.1 billion in 2021
  • 354 factories in 79 countries

Grab a Kit Kat or sit back with a cup of freshly brewed Nescafe, and let’s go back to 1866 , the year it all began.

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A Merger Lays The Foundation Of Nestlé’s Success

The story of Nestlé begins with Henri Nestlé of Vevey, a namesake of the company, and unsurprisingly, its founder. But it is also linked with two brothers, Charles and George Page, who were located far away in America at the time.

While the world of business was not a global village back then, perhaps it was fate, the love for milk, or sheer successful marketing strategy that brought the businesses of the two together to form the Nestlé we see today.

The creation of Anglo-Swiss Condensed Milk Company

Charles Page was a U.S. consul who visited Switzerland and became intrigued by its Swiss cows and beautiful meadows. The country had been a primary milk production center since the 19th century due to its available resources of high-quality cows and attracted people with a passion for milk production from far and wide. 

Page was one such individual with a different aspiration: he wanted to create condensed milk. Easy to store and transport, condensed milk, according to him, was the next big thing in the entrepreneurial world. 

Therefore, with his brother George Page, he created the Anglo-Swiss Condensed Milk Company and opened the doors of the first-ever condensed milk factory in Switzerland, in the town of Cham, in 1866.

Henri experiments

Meanwhile, Henri Nestlé was a local pharmacist in Vevey who loved experimenting with anything and everything he could get his hands on. This meant creating incredible food fusions was right up his alley.

nestle case study analysis

During the 1860s, infant mortality rates remained a grave problem in Switzerland. As a man with 13 siblings, Henri understood the woes of infants. Yet, the turning point came when he saw that premature babies faced difficulty in consuming breast milk.

Invoking his creativity, he combined available resources and his scientific knowledge to produce “ Farine Lactee ” in 1867, an infant formula made with cow’s milk, wheat flour, and sugar.

nestle case study analysis

This proved to be a breakthrough, and soon, sales increased to 1000+ cans in 1871 and more than 2000 in 1873. Two years later, Nestlé’s products could be found worldwide, including but not limited to Indonesia, Egypt, and the U.S.

As sales increased exponentially, Henri gave his company a logo symbolizing his family name that meant “Little Nest”. The logo, therefore, contained a bird’s nest.

nestle case study analysis

Today, the logo has been simplified but remains its original idea and charm as an ode to the founder.

A rivalry emerges

In 1875, Henri retired, and the company was led forth by three local businessmen in Vevey. However, simultaneously, the Anglo-Swiss Condensed Milk Company expanded to newer markets in Europe, and upon discovering Nestlé’s infant formula and its success, it developed a rival product and floated it into the market.

To Nestlé, this was nothing less than a declaration of industry war, and soon after, Nestlé added a new product to its portfolio: a Farine Lactee condensed milk. Fierce competition developed, followed by price wars and predatory market strategies.

As both companies competed for a greater market share and ROI on their rival products, it did not come as a surprise when both began generating lower revenues and making losses.

The price war lasted roughly for about 30 years until the death of all three – Henri, George, and Charles.

In 1905, the current directors of the companies agreed to halt their rivalry and combine their businesses for greater market share, revenues, and expanded reach over the globe.

As a result, Nestlé and Anglo-Swiss Condensed Milk Co. was founded – that eventually became Nestlé.

Nestle-Anglo-Swiss-Condensed-Milk-merger-1918

Certificate for 100 shares of the Nestlé and Anglo-Swiss Condensed Milk Co., issued 1. November 1918

Key takeaway 1: leave emotion out of strategy

For many years, Henri and the Page brothers went head to head in the milk industry, expanding into European markets, creating substitute rival products, adopting predatory pricing strategies, and undercutting price benchmarks. 

All this only yielded the worst for both businesses in the form of reduced revenues, higher price elasticity of demand, and a confused clientele.

Their saving grace was the strategic decision of the directors to call a truce and join forces – shared winners over lone losers. With the main competition becoming the same company, the focus was brought back to improving operations and opting for practices the business could sustain. Resultantly, the only path now was onwards and upwards.

This means foresight, strategy, and impartial business sense take priority over emotional responses, especially in the business world.

World War I, Government Contracts, & Innovative Strategies

Most companies take a few years to establish themselves in their local markets, minimizing risks. Only once they are comfortably settled and have enough brand appeal and resources to expand do they risk entering the global market.

But Nestle is not like most companies, is it?

Henri Nestle had become a big player in the Western Europe Market, and Page Brothers were leading the way in Britain. Thus, the merger already allowed Nestle to be the go-to condensed milk brand.

From there, it was always going to spread itself and capture as much of the global share as it could, and so it did. Within a decade, this newly merged company had taken its operations around the world, establishing factories in the UK, Europe, the United States, and Asia.

An unexpected opportunity

WWI broke out in 1914, and the scale of disruption around the globe was huge.  Almost every industry was affected. Some thrived and grew, but many collapsed or barely survived.

Nestle also faced an initial period of hardship where it was difficult to maintain its supplies due to severe shortages, and maintaining a smooth distribution network in Europe was near impossible. Hence, most of their supplies ran out of catering to the needs of locals.

However, the war presented a unique opportunity. The demand for milk shot up, and consequently, governments around the world sought contracts with major milk producers and distributors.

Nestle acquired several of these contracts that enabled it to not only come out of the difficult situation it was in but also rapidly expand its operations. It developed most of its factories in the US, where supply and distribution were easier, and recovery began. In fact, by the end of the war, the company had over 40 factories in the world, nearly doubling Nestlé’s overall production.

Moving forward by embracing innovation

Of course, the circumstances around WWI were unusual and worked in favor of Nestle. But it wasn’t the only reason the firm grew at such a pace. Research and innovation had defined the companies that came together to form Nestle. Hence, the same qualities were inherited and ingrained in Nestle. At a time where global infrastructure was going through a phase of transformation, Nestle was at the forefront of it utilizing it and spreading it.

For instance, railways and steamships were the new business logistics, and they became the company’s ticket into established and untapped urban markets overseas. Print media became the main face of modern marketing. Nestle cleverly capitalized on it by projecting its brand through newspapers, magazines, and billboards. The adverts focused on what made the company stand out: quality, taste, nutrition, safety, and affordability – characteristics Nestle still proudly stands by.

nestle case study analysis

All while these advancements were being embraced, Nestle didn’t lose sight of what they were truly about: their products. Hence, as far as production is concerned, they continued to introduce more efficient methods in their factories, expanding their capacity and boosting quality.

Key takeaway 2: growth follows the ambitious

Both World Wars were make-or-break events. From a decrease in demand to a disruption in supply, Nestle faced all sorts of challenges. But Nestle, even before it merged, was always looking for opportunities to grow, and the government contracts gained during the war were essentially the result of it. If Nestle didn’t have its operations worldwide, it would never have captured the governmental radar. It may have survived the shortage; it may not have.

These contracts allowed the company to grow, which worked perfectly with its innovative strategies, such as tapping urban markets and marketing using print media to enhance the brand appeal and create brand affinity. This highlights the importance of being proactive and always looking for potential opportunities, even in challenging times. 

World Wars & Expanding The Product Portfolio

1918 , the year WWI finally ended.

The fighting did stop, but the unstable economic situation the world was in couldn’t be fixed easily. Nestle’s government contracts were up, and it found itself amongst the many companies facing the force of the crisis. To add to their difficulties, consumers that had shifted to condensed milk during the war shifted back to fresh milk as supply resumed.

The company went into a loss for the first time in 1921 .

Timely response

At that point, sales were down, and production costs were high for Nestle. Its operations needed an overhaul to reach sustainability. For this purpose, Swiss banker Louis Dapples was handed the task of reorganizing the company.

Not only was he able to match production and sales, but the move also helped Nestle clear its outstanding debt. Thereafter, the company spent a good part of the decade staying afloat and focusing on sustaining its operations.

More than a milk company

First milk, and then condensed milk; despite having a global reach, Nestle hadn’t really made an effort to expand its product portfolio.

Perhaps, till the 1920s , it had never felt the need to. It had been growing at a rapid pace and adding several countries to its customer base. Now, as growth stagnated and consumer demand shifted to fresh milk, something different had to be done.

Thus, they made a series of acquisitions that opened their doors to new industries, the most notable of which was the Kohler Swiss Chocolate company in the mid-1920s . Consequently, chocolate became the second most important product of Nestle.

‍ Nestlé buys Switzerland's largest chocolate company Peter-Cailler-Kohler

nestle case study analysis

Alongside chocolate, the company also introduced malted milk, a powdered beverage named Milo, and powdered buttermilk for small children.

nestle case study analysis

Malted chocolate drink Milo launches in Australia

The Nescafe revolution

The chocolate business was going well for Nestle, but they were yet to launch the product that would change the company’s future forever.

In 1930 , the Brazilian Coffee Institute approached the company with a unique problem. Brazil had a huge surplus of coffee, but there was no real demand or use at the time. Nestle spent the next 8 years researching and experimenting with products to develop from this coffee.

While the Brazilians suggested coffee cubes, Nestle had a better idea instead.

Voila, in 1938 , Nestle launched “Nescafe” an instant soluble coffee solution, the first of its kind and one of the most popular Nestle products to date. This was later followed by Nestea, another incredibly popular product that continues to drive the tastes of many across the globe today.

nestle case study analysis

Nestlé launches NESCAFÉ in Switzerland on 1 April 1938

The USA again becomes the helping hand

There was immense potential in Nescafe, but at the same time, Nestle began to experience the severe impacts of WWII even before it broke into a worldwide conflict. The company’s revenues nosedived from $20 million in 1938 to $6 million in 1939 .

Although Switzerland remained neutral in both world wars, the situation in Europe was highly volatile, and business could not be conducted normally. Again, Nestle looked towards America by shifting its base of operations to Connecticut, far away from the conflict.

Their previous experience during WWI had allowed the company to form healthy relationships with the states, which helped them settle in. Unfortunately, the USA could not stay away from the war for too long and joined the allies in 1941 .

For Nestle, it was a complete blessing; Nescafe became a staple food for the US military as it was easily preservable, and the taste has already become a hit. Hence, without having to spend a fortune on advertisements, the coffee product penetrated worldwide, and funnily, its first brand ambassadors were allied soldiers.

Nestle sent tons and tons of Nescafe to the frontlines and managed to turn around their sales completely. From making $100 million in 1938 to reaching up to $225 million in 1945 .

Key takeaway 3: diversify and innovate

The end of WWI and the economic depression brought by it made life difficult for almost every business, including Nestle. Plus, the fact that customers preferred fresh milk instead of condensed milk meant that Nestle found it difficult to sustain its business. 

Customers’ demands and preferences, as well as the market scenarios, can change drastically over time. Nestle learned that they needed to be flexible enough to adapt and bold enough to take risks. Otherwise, they will be left with no choice but to shut up shop. 

This is when the milk company gradually began expanding by introducing new products and exploring new markets. It, in turn, allowed the company to grow despite the difficult situation.

Hence, companies should never rest on their laurels and try to improve consistently, be it by innovating, branching out, and increasing the quality and quantity of products or services they offer.

Growth Through Acquisitions and Diversification

The end of the world war had set the perfect stage for Nestle to take its business to the next level. Sales were at an all-time high, Nescafe and Nestea were making waves, and through military and government supports, the company had opened up new markets for its products.

On top of it, the world did not go into a similar depression like WWI. Instead, it marked a period of stability and peace, one which firms everywhere looked to capitalize on. Likewise, Nestle did not waste any time in getting in on the action and making some very key and monumental moves. In fact, these post-war years are often termed as the most dynamic period in the company's history!

Seasoned Maggi Soups and Broadein Food Products

As the world recovered from the war, Nestle followed an aggressive acquisition policy acquiring multiple brands worldwide. The most significant name it added to its portfolio was fellow Swiss company, Maggi.

The journey for this soup and noodles company started somewhat around the same time as that of Henri Nestle. Its founder, Julius Maggi shared the same vision of serving nutritious yet convenient foods to the public.

After the war, in 1947 , Maggi went through a number of restructurings and changes in leadership. Resultantly, the best way for the company to move forward was to join hands with Nestle. Their established factories in numerous countries introduced the Maggi brand to the world, and it became a sensation. In fact, in many Asian regions, Maggi is synonymous with instant noodles.

The Magic of Maggi

nestle case study analysis

Following Maggi’s acquisition, Nestle took over several other firms in the food industry, including:

  • 1960 : Crosse & Blackwell, a British can and preserved food manufacturer
  • 1963 : Findus, a Swedish frozen food company
  • 1971: American fruit juices company Libby
  • 1973: Stouffer, a frozen and prepared foods brand

With these moves, Nestle extended its product range and established a stronghold in the preserved foods industry.

Developing new & improving existing “convenience” products

While Nestle spread its wings by bringing other brands under its umbrella, it did not lose sight of the products it developed itself.

For instance, the Nescafe coffee, which had been a huge success during the war, continued its astonishing path upwards. From 1950 to 1959 , its sales almost tripled, and with the development of an anti-freeze version in 1966 , its sales quadrupled in the next decade.

Simultaneously, Nestle also worked on launching new products. In 1948 , it further embedded itself in American households with Nesquik, a chocolate powder that would instantly mix in cold milk. 

Owing to the product’s success, they even introduced the Nesquik Bunny to win over both adults and children.

During the same time, Nestle rebranded its infant cereals as Cerelac while launching an extensive range of canned foods under Maggi.

Diversifying beyond the food industry

By the 1970s , Nestle had well and truly occupied a dominant position in the food industry. It was now time to step out of the comfort zone and venture into new industries.

The big break came in 1974 when Nestle made a move for a Parisian hair care company, L'Oréal. Established in 1909 , this company had gone from making hair dyes to a full range of cosmetic care products. It has also formed a loyal customer base in France.

With big plans, Nestle offered the family owners of L'Oréal a 3% stake in Nestle in return for a 50% share. The offer was too attractive to refuse, and the two companies entered into a new partnership. This merger reaped multifold returns for both parties, and by the 1980s , the brand was the leader in its industry.

The cosmetic arena wasn’t the only one Nestle aimed to capture. There was an economic slowdown and general volatility between the French and Swiss markets. The price of cocoa and coffee went up more than three times. Nestle decided to take a risk and leap into waters it had never been in before.

In 1977 , it also became the owner of the American pharmaceutical company, Alcon. This, too, was a success with the brand operating in 75+ countries and being sold more than twice that number.

Merger to remember & the future of coffee

Nestle never looked to slow down despite its numerous acquisitions and diverse brand offerings.

In 1984 , it offered a mind-blowing $3 billion to buy out the food company, Carnation. Many believe this to be one of the largest acquisitions outside the oil industry – at least at the time. The scale of the deal was such that it took a year for it to be approved and finalized.

It wasn’t just being in the same industry that sparked Nestle’s interest; it was also the fact that Carnation had a diverse portfolio, including a profitable pet food brand, Friskies, and Contadino tomato products.

Nestle also added UK confectionery company Rowntree Mackintosh to its list of acquisitions in 1988 , giving it ownership of popular chocolates, Kitkat and Smarties. In the same year, it also included Buitoni-Perugina, a major Italian pasta and confectionery company to its mix.

nestle case study analysis

Alongside the mergers, Nestle was also actively working on making a comeback with its coffee products. Thus, in 1986 , it rolled out Nespresso, a premium version of its coffee, different from the previous freeze-dried budget version. The idea behind it was simple: present a DIY system for any person who wanted to enjoy luxury coffee.

nestle case study analysis

Key takeaway 4: seek opportunities in both new and existing industries

Many firms that plan to diversify their portfolios lose grip on their main industry. Nestle wasn’t one of them. Its initial strategy for growth post-WWII was to cement its hold in the food industry with a series of acquisitions and new product offerings. Then, it made its move in other industries while still improving on its basic offerings of food, coffee, and chocolate-related products.

Nestle grew exponentially by tactfully merging and acquiring companies it thought would add value to its brand. This paid off handsomely and turned Nestle into a force to be reckoned with. It highlights the need for brands to enhance their value offerings, using whatever means they have at their disposal, right from diversifying to collaborating with others.

International Force - Nestle's Global Strategy

With the fall of the Berlin wall in 1989, markets in Central and Eastern Europe, as well as China opened up. Trade barriers disintegrated, liberalization picked up the pace, and economic markets around the globe started to integrate well.

This proved to be quite beneficial for Nestle. There were new diverse markets to expand to and favorable policies that encouraged them – not that they needed any second invitation. 

Onwards & upwards with tactful acquisitions

From the late 1990s to the late 2000s, Nestle went on an aggressive acquisition spree and acquired the following companies:

  • San Pellegrino group , the leading Italian mineral water business, in 1998 paved the way for Nestle to launch Nestle Pure Life and lead in Europe while making a way into developing countries worldwide.
  • Spillers Petfoods in 1998 enabled Nestle to cement its position as a key player in the pet food business around the globe and Europe in particular.
  • Ralston Purina , U.S.'s pet food business, in 2002 and merged with Nestlé Friskies Petcare, creating a market leader in the pet care industry, Nestlé Purina Petcare.
  • The U.S. ice cream business merged with Dreyer's in 2002, establishing Nestle as the leader in the U.S., the world's largest ice cream market. 
  • Movenpick Ice Cream in 2003 to complement Nestle's super-premium ice cream brands portfolio in North America and Italy.
  • Delta Ice Cream in 2005 as Nestle's realized that the ice cream business was a profitable opportunity and the company could make inroad in the growing Greek and Balkans ice cream market.
  • Chef America Inc in 2002 as Nestle continued with its horizontal integration and expanded into the frozen foods market, which was growing.
  • Jenny Craig and Uncle Toby's in 2006 as Nestle wanted to stay true to its commitment to nutrition, health, and wellness and reinforce its presence in the U.S., the world's largest nutrition and weight management market.
  • Medical Nutrition division of Novartis Pharmaceutical in 2007 as it was complementary to Nestle's Healthcare Nutrition Business and enhanced Nestle's capabilities to cater to the needs of its customers with special nutritional requirements.
  • Henniez in 2007 to augment its position in the competitive Swiss bottled water market, leveraging the solid industrial capacity and distribution network of the company.
  • Gerber , the iconic U.S. baby food brand, in 2007 became the number 1 player in the U.S., the world's largest baby food market, transforming Nestle Nutrition into a global leader.

A number of other partnerships were also made, such as the one with Belgian chocolatier Pierre Marcolini , helping Nestle augment its position in the food and nutrition industry while allowing it to diversify in health, wellness, and beauty.

Now, why did Nestle do that?

The answer is to remain attuned to the changing consumer tastes and remains ahead in a market that never stays still.

Sure, continuous innovation is essential, but Nestle didn't just rely on that and continued to acquire businesses and benefit from synergies to become the undisputed leader in the business world.

All this while, Nestle has remained true to its roots and continued to delight its customers worldwide.

Realizing that with expanding its global footprint, there was bound to be an array of issues that it needed to deal with effectively, Nestle launched a Group-wide initiative called GLOBE (Global Business Excellence) .

The primary purpose behind this initiative was to harmonize and simplify business processes and empower Nestle to make the most of its competitive advantage while alleviating the risks and drawbacks.

Key takeaway 5: growth & diversification through acquisition

From San Pellegrino in 1997 to Henniez and Gerber in 2007, Nestle's relentless strategy to acquire an array of businesses in different markets, ranging from pet care and baby food to ice cream and bottled water, strengthened its overall position and breathed new life into the company.

Nestle not only wanted to expand to new product lines but also become the market leader in all of them, in different parts of the world. The fastest and most effective way to do just that was through strategic acquisitions. 

In an ever-evolving market, staying still or focusing solely on a select few activities is risky for large businesses. The key, at times, to grow is to embrace an external growth strategy by acquisitions in different industries with distinctive lines of business.

Commitment To Innovation

nestle case study analysis

Nestle stays firmly committed to its goals of helping people, families, and pets around the globe live happier and healthier lives. From meeting the ever-evolving needs of the modern consumer to providing safe and premium-quality of food on-demand, Nestle does it all.

However, it understands that dramatic shifts are happening in the market with consumer demands dynamically changing, new entrants offering endless choices, and people living and shopping in ways never seen before.

Winning in such an environment requires disruption and a hybrid-growth model. No one understands that better than Nestle, and here’s how it is driving value from its base portfolio while embracing new ventures to scale up.

Nestle: 150-year-old start-up innovating from within

Unlike other business entities that outsource the innovation part and fail to prepare for the future, Nestle has strategically decided to combine its scale and capabilities with the mentality and speed of a start-up.

InGenius , Nestlé's employee innovation accelerator, is the ultimate platform that encourages intrapreneurship within the company. Internal start-ups within the company are launched , and employees are encouraged to think big and creatively.

Moreover, Nestle’s global R&D accelerator program brings together scientists, students, and employees, empowering them to come up with new innovative products.

Lean designs, fast prototyping, quick testing, continuous hustling, and room for big risks make the incubator program a success. The goal of the internal start-ups is to help promptly develop new product lines from scratch within 9 months, paving the way for the future of food.

What’s more is that employees are given challenges to solve, ranging from improving the quality of food to helping achieve the net-zero target. On top of this, Nestle also helps young social entrepreneurs, outside its fold, by offering them holistic support, mentorship, and access to its R&D and innovation experts by partnering up with Ashoka – an organization that identifies and supports social entrepreneurs.

Rethinking & reinventing

To better tap into today’s consumer trends, Nestle goes the extra mile to revive the brands with modern innovation.

It does this by introducing new varieties of products and adding unique flavors to attract new customers and retain existing ones. For instance, in 2017 alone, Nestle launched 1000 new products. Yes, that’s right!

From bringing in new flavors of juices and milk to launching frozen organic meals and non-dairy desserts, among others, it tries its best to exceed its customers’ expectations.

Enhancing capabilities

Fueling growth through innovation and improving operational efficiency are two key components of Nestle’s value creation model.

While innovation is considered everyone’s job at Nestle , increasing operational efficiency is also stressed.

Each and every aspect of the business, be it hiring people, using data analytics to make decisions based on logic, optimizing supply chains, or deploying manufacturing solutions, is reviewed and revamped to increase efficiency and deliver desired business outcomes.

Future of food

Nestle, together with Swiss academic and industrial partners such as ETH Zurich, Ecole Polytechnique Fédérale de Lausanne (EPFL), and companies Bühler and Givaudan, announced a joint research program, Future of Food , that will help develop nutritious, tasty, sustainable, and trendy food and beverage products.

It's just another example of Nestle leveraging innovation and partnerships to move forward. Plus, it highlights Nestle’s commitment to providing healthy food while doing right by the environment.

The future is healthy, sustainable, and personalized

Nestle is actively working on providing healthier diets to people worldwide. It's even reformulating its popular products such as Kit Kat and Maggi, among others, to reduce the sugar, salt, and saturated fat in them while also transitioning its brands towards organic.

In addition to this, it is actively working towards ensuring its supply chains have zero environmental impact and reducing its carbon footprint by changing its plastic packaging.

Nestle has announced that it will phase out all packaging that’s not recyclable by 2025 and ensure the packaging it uses is eco-friendly.

Last but not least, Nestle, in its quest to stand out and scale, is emphasizing the need to please customers in every way possible. It aims to do that by delivering customers exactly what they want, how they want it, and in the taste, and shape they want it.

Meeting the needs of consumers on an individual level, according to Nestle will make all the difference. Hence, it is investing in it. Nestle acquired a start-up in UK, Tails.com, which provides tailored diets to dogs on a monthly basis based on age, breed, and weight among other factors.

Key takeaway 6: innovate, innovate, and innovate

Ascending to the top is one thing, but remaining at the top is the real challenge. Nestle’s strategy of launching incubators, experimenting with products, enhancing capabilities, and thinking ahead to create a new future highlights the importance the company places on innovation.

Nestle never hesitates to be bold and go out of its way to innovate to accelerate its growth and achieve scale. It realizes the value that can be derived from innovation and hence, leaves no stone unturned in thinking out of the box and putting its money where its mouth is.  More than anything else, this fundamental strategy has helped the company dominate and remain a customer favorite.

Nestle In The New Normal

Nestle: the multi-national company that adapts

A vital company in the challenging times of Covid-19, Nestle made many changes in its processing and manufacturing processes to continue supplying good food. As supply chain challenges intensified, Nestle focused its efforts on streamlining the supply chain end-to-end, from sourcing supplies to logistics. 

Nestle had 8.1% organic growth in the first half of its fiscal year 2022.

Nestle: the best employer

Making the health and safety of its employees a priority, Nestle implemented enhanced safety measures on and off its premises, including factories, distribution centers, labs, and offices.

Nestle responded to Covid-19 effectively and made sure its employees are protected and motivated by:

  • Allowing working from home 
  • Restricting travel and exposure to the virus
  • Introducing the best hygiene practices
  • Implementing effective social distancing measures
  • Giving a special 14-day COVID-19 leave
  • Offering financial support in the form of loans

Nestle: the company that gives back to the community

Nestle extended a helping hand to those in need in the crisis. It provided holistic support to medical institutions, food banks, food delivery organizations, and relief organizations in the local communities who are on the frontline. 

Not only did Nestle donate essentials such as food and bottled water but also money. Nestle joined forced with the International Federation of the Red Cross and Red Crescent Societies (IFRC) and donated  CHF 10 million . Plus, in order to speed up the vaccination and ensure fair distribution of vaccines, it partnered up with COVAX and donated  CHF 2 million. 

Key takeaway 7: stay resilient 

There’s no doubt that the Covid-19 pandemic disrupted the global markets and adversely impacted Nestle in ways more than one. However, Nestle managed to survive and thrive by continuously adapting, being proactive, and striving to do right by the people and the communities it served, as evident from its increased market share and growth during the period.

Nestle in a nutshell

Nestle products are recognized, consumed, and valued in all corners of the world. It is a company that has ingrained itself in the day-to-day life of people and continues to raise the bar higher. From innovation, people management, and a long-term strategic approach to the quality of products and services, social responsibility, and competitiveness, Nestle ticks all the boxes.

Here are the four main lessons derived from the growth of Nestle from a relatively small Swiss-based company established in 1866 to one of the most successful, admired, and profitable multinational companies in the world:

Key takeaway 1: globalize but also localize

A company as big as Nestle, which operates in almost all countries worldwide, has achieved success by localizing its offerings and catering to the needs of each individual market.

Sure, it could have made generalized global strategies and campaigns, but it took the difficult path by localizing everything from sourcing, product planning, production, marketing, and even its brand strategy.

It highlights the importance of being customer-centric regardless of who you are as a company and where you operate.

Key takeaway 2: innovate – change is an opportunity

Whether it be changing consumer demands, the evolving marketplace, or crisis situations, Nestle has never stopped innovating. Sure, it has paid the price of a few campaigns gone wrong, but one thing that it has been relentless at is continuing to strive to be a step ahead.

Nestle does it all, from committing to sustainability to coming up with new creative ways of providing more value to all stakeholders. It serves as a lesson for brands in this modern digital age. You can only survive and succeed if you innovate. Period.

Key takeaway 3: grow through acquisitions

Nestle has over 2000 brands. Yes, that’s right. Nestle has rapidly grown, gained a competitive advantage, increased its market share, achieved synergies, and enhanced efficiency in its business by acquiring companies.

It actively looks for potential acquisition opportunities and doesn’t hesitate to take risks. This showcases that if you want to grow as a company, you need to broaden your horizons and partner up with others. Foresight, strategic decisions, and impartial business sense are critical - now more than ever. 

The external growth strategy has worked wonders for Nestle by allowing it to expand into new industries and distinctive production lines - all of which have contributed immensely to its growth over the years. Simply put, if you can’t beat them, just join them, or well, in Nestle’s case, buy them.

Key takeaway 4: importance of brand & values

As a company, your values are bigger than your revenue. If you truly focus on and stick to your values, you can attract consumers and scale your company. Nestle has done just that by not only saying but becoming the “Good food, Good Life” company.

It firmly abides by its core principles of “ Unlocking the power of food to enhance the quality of life for everyone, today and for generations to come .”

Every decision that is made, every product that is launched, every customer that is served, is served to shape a better and healthier world. No wonder Nestle has become a global icon from a local favorite.

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nestle case study analysis

SWOT Analysis of Nestle [Detailed] Nestle is one of the world’s largest food and beverage company with products ranging from global icons to local favourites. In this post, I will be running you through the detailed SWOT analysis of Nestle and will provide unique insights about Nestle.

SWOT analysis of Nestle

SWOT analysis is one of the essential marketing analysis tools. It is employed to understand a company’s position in the external environment and its inner capabilities. I will be taking you through the detailed SWOT analysis of Nestle, which will tell us why is Nestle so successful.

With the help of the SWOT matrix, we will try to understand the rationale behind their strategic decisions. Let us first revise our concepts on SWOT analysis.

What is SWOT Analysis and Why You Need to Use it

Every major strategic decision is made after accessing one’s capabilities and position in the environment where the decision will have a significant impact. The assessment helps one to make an informed decision and be better prepared for any contingencies.

SWOT is an acronym for Strengths, Weakness, Opportunity and Threats. It helps us to understand one’s internal capabilities and external positions. Internal capabilities include the Strengths and Weaknesses , whereas the opportunities and threats determine external positions.

The simplicity of the SWOT is its more comfortable to apply to everything that is influenced by internal and external factors. It can be used to situations, industries, activities, products, businesses, strategies, products, and to even people.

Strengths and opportunities bring in a positive impact and determine one’s core competencies and help in expanding. Weaknesses and threats, on the other hand, are detrimental to one’s growth.

Here, I will introduce you to the SWOT analysis of Nestle while discussing in detail, every aspect of the SWOT. We will also be looking at the unique elements of the Nestle and study their strategies. The analysis will make you understand Why is Nestle so successful and how it is running for these many years.

I will also be walking you through the SWOT matrix for easier visualization.

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Company Overview: Nestle

Paul Bulcke chairs the group, and U Mark Schneider is the group’s Chief Operating Officer (CEO). It has registered CHF 92.6 billion (Swiss francs) as their sales revenue and 2.9% real internal growth in the year 2019. With over 1300 new product launches in 2019 alone, the company employed 291000 employees .

Founded in 1866 by two brothers Charles and George Page , who had incorporated milk supplies from Switzerland and sold it as condensed milk under the name of Anglo-Swiss Condensed Milk company.

Henri Nestle invented the first infant food in 1867 his company had the iconic nest logo. In 1905, the company Henri had found merged with Anglo-Swiss to form the Nestle Group.

Product Portfolio

Over 150 years, the company expanded into 187 countries with a varied product range. The products are divided into the following broad categories:

  • Powdered and Liquid Beverages
  • Nutrition and Health-Science
  • Milk Products and Ice-creams
  • Prepared Dishes and Cooking Aids
  • Confectionary

Organizational Structure

The group is simplifying its diverse operations from global run to the three significant zones, i.e. The Americas (AMS); Europe, Middle East and North Africa (EMENA) and Asia, Oceania and Sub-Saharan region (AOA).

The simplification started with division of the global Nestle Waters at the beginning of 2020 into the three zones. Nestle Nutrition and Nestle professional will follow the structural change into the zones.

The decentralization drive is fueled by investing in local incubators across 187 countries. The group has launched innovation challenges in Sub-Sahara, China and Switzerland to incorporate local innovations.

SWOT Analysis of Nestle [Matrix]

Here is a glance of some of the strengths, weakness, opportunities and threats of the Nestle company.

SWOT analysis of Nestle

We can get a clear picture of what is the SWOT analysis of Nestle company and how they use it to make major strategic decisions. We will be taking a few examples here as well.

Strengths of Nestle

Nestle’s continuous presence over the years is attributable to numerous internal factors. These factors form the strengths of the Nestle group, and here I will be taking you through what are the strengths of Nestle briefly:

  • Global Presence: Nestle’s active presence in 187 countries is advantageous to its undivided growth. The presence in some countries is over 150 years, establishing the brand in the local environment. This means that their product is available to the people in these many countries, and it creates a long-lasting impact on people as well.
  • Increasing Cash flows: Nestle cash flows increased by 10.9% to CHF 11.9 billion in 2019 . This means that the group’s finances are healthy and they can invest more money and can expand quickly.
  • Strong Supply Chain operations: The nestle group encourages innovations at the local levels, incorporates technology and is increasing the traceability of the sources of the raw materials of its products. This enables the group to achieve substantial operational efficiencies.
  • Fast Innovation: Application of science across all platforms and innovating through collaboration with the local players allows Nestle to innovate faster and according to local demands. For example, in 2019, Nestle could achieve shortened timelines of science into technology on average by 30% and saw additional 50 fast-tracked projects which will launch within 6 to 12 months.
  • Digital Transformation: Nestle’s investment in digital transformation across fields like marketing, social media, e-commerce, manufacturing and supply chain has helped them become data-driven. This enables them to personalize their consumer’s needs and achieve higher satisfaction. In 2019 Nestle has transformed 70 ecosystems by the help of artificial intelligence and personalized 20% of their consumer’s contacts .

Weaknesses of Nestle

Nestle core competencies lie in its strengths, but the global giant also faces numerous internal weaknesses. Here, we can easily understand what are the weaknesses of Nestle:

  • Problems in product marketing: Nestle has time and again faced a massive backlash from people across the globe for not correctly positioning and marketing their products. One classic example is the marketing of breastfeeding baby formula to people in poorer nations. Uneducated mothers were using the product with contaminated water, causing high cases of sickness from the same.
  • Organizational Structure: Nestle’s current organizational  structure is divided based on its product portfolio and not based on its geographical operations. This creates vast power distance when it comes to decision making and prevents agility in operations. In expanding its operations, this always proves to be a major hurdle.
  • High dependence on advertising:  Nestle is majorly dependent  on advertising to promote its products; it increases the marketing costs and consequently, a high risk associated with the returns. With disruptions coming up, this strategy will not sustain Nestle in the long run.

Opportunities of Nestle

The dynamic environment is now more connected than ever. It provides numerous opportunities for the group to thrive and grow. I have listed some of them for your understanding:

  • Increasing Transparency:   The present consumer holds more information than ever. With the growing presence on the internet, it will be favorable  to increase transparency. Increasing transparency would mean that consumer knows where the raw materials are sourced from, when they are sourced and who sourced them. The consumer feels more connected and is trusting the brand more.
  • Sustainability: Integration and operating sustainably will help the group to reduce costs, increase efficiency and utilize   labor  properly. Local integration and production will make operations lean, which will reduce long term expenses.
  • Increasing disposable Income: Increase in the average household income in Asia, Oceania and Sub-Saharan regions is an excellent opportunity for Nestle to expand its operations. Introduction of new or existing products can be taken up to increase its product portfolio and hence, increased presence and profits.
  • Diversifying its product portfolios: Nestle has a great opportunity in introducing products into sectors other than food and beverages. Merging through strategic alliances can help Nestle to diversify and tap into markets other than food and beverages. For example, the technology industry is slated to grow at a rate of 5% CAGR in 2024 .

SWOT analysis of Nestle

Source: Nestle.com

Threats to Nestle

The same dynamic environment provides numerous threats owing to its ever-changing environment. Frequent disruptions, emerging technology and continuous innovations drive the changes. Nestle, to sustain has to focus on these parameters to grow continuously:

  • Climate Impact: Changes in the climate and its subsequent impact can be seen on numerous Nestle product’s raw materials. Raw materials like coffee, wheat and dairy are affected by climate change. They are highly likely to affect Nestle’s growth over a while.
  • Strategic Investment choices: Investment choice’s failure to align with such a diverse product run group is exceptionally high. The group runs a higher risk of losing brand presence and a potential sum of money.
  • Product Quality and Safety: Nestle, in the past, faced much negative effect on its reputation and consumer trust after non-compliance of food safety. The best example is of Maggi in India, which failed to comply with one of the laboratory tests and lost a massive share in the market.
  • Rising Competition:  Nestle’s product portfolio competes with various multi-national players and numerous local players. With the advent of more technology and constant disruptions in the industry, nestle is always at a risk of losing its existing consumer base.

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Conclusion of SWOT Analysis of Nestle

Nestle group’s ever-growing product portfolio and its global presence are attributed to their focus on its core strengths and its alignment with the opportunities available. At the same time, Nestle’s focus on threats and has to work on its weaknesses to tackle every change in the environment. 

I have touched upon what is the SWOT analysis of Nestle company and also provided answers to these questions like Why is Nestle so successful? What are the weaknesses of Nestle? What are the strengths of Nestle? What is Nestle’s current position in the market?

It is a robust yet straightforward tool which can be applied to numerous situations, industries, decisions to analyze and get a head start on robust decision making.

Also Read:  Our SWOT Analysis Series

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Strategy is about the most crucial and key issues for the future of organizations. Strategy is also important to explore several strategic options, investigating each one carefully before making strategic choices. The study incorporates a rigorous and systematic effort to uncover the strategies and its impact on the company's performance by analysing case studies, articles and the annual report of Nike Inc. and Adidas Inc. The study attempts to find out the relevance of the strategies adopted by these companies, which are globally successful athletic apparel companies in the context of Bahrain. The findings of the study highlight Nike's strategies which focus on innovation and emphasis on its research and development department, provision of premium pricing for its customers, broad differentiation strategy, market Segmentation Strategy and Closed-Loop strategy. The Adidas strategies focus on the broad differentiation, innovation, trying to produce new products, services and processes in order to cope up with the competition. It embraces a multi-brand strategy, emphasis on expanding activities in the emerging markets, continuously improving infrastructure, processes and systems, foster a culture of challenging convention and embracing change, foster a corporate culture of performance, passion, integrity and diversity. These strategies coupled with its resources and unique capabilities form the basis of sustainable competitive advantage for both the companies. INTRODUCTION: The strategy is a path towards achieving the optimum goals of individuals, groups and organizations. In addition, it leads to a best use of companies' available resources and it also guides the company to stay in a business successfully and continuous improvements for its processes. The definition of strategy could be differ from one author to another, but the most common definition is that the strategy is long term plans and approaches towards the intended visions and objectives. It is a general framework that specified the organizations' plans, policies and approaches to meets its objectives, goals and end results. The way an organization used to shape its strategies could be differentiate from other organizations in order to make its products unique and remarkable. Globally, companies formulate their strategies based on their visions and reaching the satisfaction of customer's needs, requirements and expectations. Subsequently, they use those strategies as a baseline to compare their actual performance with planned ones, to evaluate the end results and ensuring the continuing organizational excellence. There are many kinds of strategies that are pursued by the companies; Such as cost leadership, differentiation and the focus strategies (Porter, 1985), services strategies, growth strategies. Based on the goals, the companies form those strategies and they rank them upon the priorities. It is more than important for any organization to put strategies and not any strategies; the correct strategies which are formulated after a long time of studying and after numerous number of brainstorming among the top management members. Therefore, those strategies then to be implemented by converting the organization's plans and policies into real actions through the best use of available resources such as: human resources, budgets and technological advance; in order to enhance the organization's performance, productivity and sustainability.

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  • Nestlé Continuous Excellence (C): Operations and beyond

José Lopez, Nestlé’s executive vice president of global operations, had convincingly demonstrated the benefit of NCE in operations. Now he wanted to see it rolled out to the rest of the organization. NCE’s sustainability, employee engagement and impressive financial returns convinced Lopez that if NCE were implemented in other functions, it could serve as the competitive driver for Nestlé. How should he present the program to his colleagues on the board? This is the final case in this four-part series.

In this session, participants consider how best to convince the top level of management of the benefit of rolling out a successful operations initiative across the entire organization. By asking participants to prepare a presentation to the board, the instructor can help convey the critical role played by the visual and spoken delivery of key arguments, as well as compelling data, in securing board level buy-in and approval.

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  • Nestlé Continuous Excellence (A): Beyond cost savings
  • Nestlé Continuous Excellence (B): Launching NCE
  • Nestlé Continuous Excellence (D): Starting the journey beyond operations

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Home » Management Case Studies » Case Study of Nestle: Training and Development

Case Study of Nestle: Training and Development

Nestle is world’s leading food company, with a 135-year history and operations in virtually every country in the world. Nestle’s principal assets are not office buildings, factories, or even brands. Rather, it is the fact that they are a global organization comprised of many nationalities, religions, and ethnic backgrounds all working together in one single unifying corporate culture .

Culture at Nestle and Human Resources Policy

Nestle culture unifies people on all continents. The most important parts of Nestle’s business strategy and culture are the development of human capacity in each country where they operate. Learning is an integral part of Nestle’s culture. This is firmly stated in The Nestle Human Resources Policy, a totally new policy that encompasses the guidelines that constitute a sound basis for efficient and effective human resource management . People development is the driving force of the policy, which includes clear principles on non-discrimination, the right of collective bargaining as well as the strict prohibition of any form of harassment. The policy deals with recruitment , remuneration and training and development and emphasizes individual responsibility, strong leadership and a commitment to life-long learning as required characteristics for Nestle managers.

nestle training and development case study

Training Programs at Nestle

The willingness to learn is therefore an essential condition to be employed by Nestle. First and foremost, training is done on-the-job. Guiding and coaching is part of the responsibility of each manager and is crucial to make each one progress in his/her position. Formal training programs are generally purpose-oriented and designed to improve relevant skills and competencies . Therefore they are proposed in the framework of individual development programs and not as a reward.

Literacy Training

Most of Nestle’s people development programs assume a good basic education on the part of employees. However, in a number of countries, we have decided to offer employees the opportunity to upgrade their essential literacy skills. A number of Nestle companies have therefore set up special programs for those who, for one reason or another, missed a large part of their elementary schooling.

“Sometimes we have debates in class and we are afraid to stand up. But our facilitators tell us to stand up because one day we might be in the parliament!” (Maria Modiba, Production line worker, Babelegi factory, Nestle South Africa).

Nestle Apprenticeship Program

Apprenticeship programs have been an essential part of Nestle training where the young trainees spent three days a week at work and two at school. Positive results observed but some of these soon ran into a problem. At the end of training, many students were hired away by other companies which provided no training of their own.

“My two elder brothers worked here before me. Like them, for me the Nestle Apprenticeship Program in Nigeria will not be the end of my training but it will provide me with the right base for further advancement. We should have more apprentices here as we are trained so well!” (John Edobor Eghoghon, Apprentice Mechanic, Agbara Factory, Nestle Nigeria) (adsbygoogle = window.adsbygoogle || []).push({}); “It’s not only a matter of learning bakery; we also learn about microbiology, finance, budgeting, costs, sales, how to treat the customer, and so on. That is the reason I think that this is really something that is going to give meaning to my life. It will be very useful for everything.” (Jair Andres Santa, Apprentice Baker, La Rosa Factory Dosquebradas, Nestle Columbia).

Local Training

Two-thirds of all Nestle employees work in factories, most of which organize continuous training to meet their specific needs. In addition, a number of Nestle operating companies run their own residential training centers. The result is that local training is the largest component of Nestle’s people development activities worldwide and a substantial majority of the company’s 240000 employees receive training every year. Ensuring appropriate and continuous training is an official part of every manager’s responsibilities and, in many cases; the manager is personally involved in the teaching. For this reason, part of the training structure in every company is focused on developing managers own coaching skills. Additional courses are held outside the factory when required, generally in connection with the operation of new technology.

“As part of the Young Managers’ Training Program I was sent to a different part of the country and began by selling small portions of our Maggi bouillon cubes to the street stalls, the ‘sari sari’ stores, in my country. Even though most of my main key accounts are now supermarkets, this early exposure were an invaluable learning experience and will help me all my life.” (Diane Jennifer Zabala, Key Account Specialist, Sales, Nestle Philippines). “Through its education and training program, Nestle manifests its belief that people are the most important asset. In my case, I was fortunate to participate in Nestle’s Young Managers Program at the start of my Nestle career, in 1967. This foundation has sustained me all these years up to my present position of CEO of one of the top 12 Nestle companies in the world.” (Juan Santos, CEO, Nestle Philippines)

International Training

Nestle’s success in growing local companies in each country has been highly influenced by the functioning of its International Training Centre, located near company’s corporate headquarters in Switzerland. For over 30 years, the Rive-Reine International Training Centre has brought together managers from around the world to learn from senior Nestle managers and from each other.Country managers decide who attends which course, although there is central screening for qualifications, and classes are carefully composed to include people with a range of geographic and functional backgrounds. Typically a class contains 15—20 nationalities. The Centre delivers some 70 courses, attended by about 1700 managers each year from over 80 countries. All course leaders are Nestle managers with many years of experience in a range of countries. Only 25% of the teaching is done by outside professionals, as the primary faculty is the Nestle senior management. The programs can be broadly divided into two groups:

  • Management courses: these account for about 66% of all courses at Rive-Reine. The participants have typically been with the company for four to five years. The intention is to develop a real appreciation of Nestle values and business approaches. These courses focus on internal activities.
  • Executive courses: these classes often contain people who have attended a management course five to ten years earlier. The focus is on developing the ability to represent Nestle externally and to work with outsiders. It emphasizes industry analysis, often asking: “What would you do if you were a competitor?”

Nestle’s overarching principle is that each employee should have the opportunity to develop to the maximum of his or her potential. Nestle do this because they believe it pays off in the long run in their business results, and that sustainable long-term relationships with highly competent people and with the communities where they operate enhance their ability to make consistent profits. It is important to give people the opportunities for life-long learning as at Nestle that all employees are called upon to upgrade their skills in a fast-changing world. By offering opportunities to develop , they not only enrich themselves as a company, they also make themselves individually more autonomous, confident, and, in turn, more employable and open to new positions within the company. Enhancing this virtuous circle is the ultimate goal of their training efforts at many different levels through the thousands of training programs they run each year.

  • Employee and Career Development (Nestle Global)

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Extensive SWOT Analysis of Nestle

nestle case study analysis

By Aditya Shastri

We are pretty sure that you already know about Nestle. This year marks the completion of 60 years of Nestle in India. 60 years of consistently providing nothing but quality food products to the country. Nestle has successfully managed to earn the trust and respect of every stratum of society in this country.

In this case study, we will go through the SWOT Analysis of Nestle. The areas where the company can improve in the future and where the company should improve.

We are pretty sure that by the end of this insightful blog you will have a different perspective about Nestle as a company. You may also read our other blog about the Marketing Strategy Of Nestle . 

Let us now learn further about Nestle as a company.

About Nestle

Nestle Brand Logo - SWOT Analysis of Nestle | IIDE

Nestle SA is a global food and beverage firm based in Switzerland that operates in India as Nestle India. It arrived in India for the first time in 1956. Nestle has developed dramatically in India since then, from introducing its first milk product in the 1960s to delivering a wide selection of high-quality products in the Indian market. Among other things, it sells beverages, breakfast cereals, chocolates & confectionery, dairy, nutrition foods, vending, and food services. Nestle India’s portfolio includes well-known brands such as Maggi, Kit Kat, Polo, Milkmaid, and Nescafe.

Today, Nestle is one of the biggest food and beverage companies in the world. Nestle boasts a remarkable 96.5% market share in Infant Cereals, an impressive 62.5% market share in Pasta & 59.5% in Instant Noodles and the list goes on. These strong sales percentages have reflected themselves in the company’s financial statements. Nestle recorded around 1.92 billion dollars in revenue in 2020.

Now, let us look into the SWOT analysis of Nestle

SWOT ANALYSIS OF NESTLE

SWOT stands for strengths, weaknesses, opportunities, and threats. It is a tool commonly used to analyze things in a simplified manner. 

SWOT analysis is an excellent tool to determine the strengths of the company so that it can continue to work on those strengths, find out its weaknesses so that it can put extra efforts into those areas, its opportunities which shows where it can grow and its threats so that it can develop a plan and act proactively.

1. Strengths of Nestle

Strengths indicate what a business excels at and what sets it apart from the competition, such as a strong brand, a dedicated client base, a strong balance sheet, or distinctive technology.

  • People, culture, values, and attitude

According to Harvard University, the main reason behind Nestle’s unparalleled success is its multi-cultural attitude. This multi-cultural attitude helps to add value to its product and value chain.

  • Unmatched geographical presence

With a history of more than 160 years, this company offers a wide range of food and beverage options to its customers. Nestle operates in 190 countries worldwide and has around 500 factories, and has around 400,000 people working under them. 

  • Unmatched research & development capability

Nestle invests 1.6bn $ every year in R&D and has the most advanced science and innovation network in the food industry. Nestle has a team of 4000 scientists and specialists leading them towards success through scientific research and fast innovation.

  • Unmatched product & brand portfolio

Nestle has the largest range of food & beverage products in the world. The consumer of nestle products includes everyone from an infant to an old person. Nestle products have been successful at creating remarkable customer loyalty. 

  • Decentralization

Nestle is a strong advocate of buying raw materials for its products from local areas. It not only helps the local farmers in the region but also boosts the economy resulting in the overall development of the place.

2. Weaknesses of Nestle

A company’s weaknesses keep it from realizing its greatest potential. A bad brand, higher-than-average turnover, high levels of debt, an inadequate supply chain, or a lack of capital are examples of areas where the company has to improve to stay competitive.

  • Has faced criticism over selling contaminated food, high water usage, and other unethical practices

Nestle has faced a lot of negative media coverage of late. Most recently they were heavily criticized for using lead in the production of Maggi. Some of the allegations that nestle faced are as follows :

  • Unfair marketing of baby formula;
  • Supports privatization of water;
  • Demanding debt repayment from a famine struck country;
  • Misleading labeling;
  • Sourcing materials from suppliers practicing child and forced labor;
  • Anti-unionism.
  • Contaminated food recalls

Even after taking strict measures to ensure the best quality of food, Nestle has instances of contaminated food being sold. This does not help the company with its public image and has suffered some backlash from the public in the past.

SWOT Analysis of Nestle | IIDE

3. Opportunities for Nestle

Opportunities are windows of opportunity or possibilities for something good to happen, but the company must seize them!

  • Clear and accurate labeling indicating any harmful products

Almost 62% of consumers are more likely to choose products that are free of any harmful products. Today the consumers have become conscious of their health and nestle can use this opportunity by branding itself as the most healthy option in the market.

  • Transparency in material sourcing

Consumers today make buying decisions on whether the product is sustainable and if the product has adverse effects on the environment. Being transparent in material sourcing can help nestle build a good brand image.

  • Ready-to-drink (RTD) tea and RTD coffee markets 

Nestle does not have any RTD tea/coffee products. This sector is dominated by small companies. Nestle can use its resources to capture this untapped market. 

4. Threats to Nestle

Anything that potentially harms your firm from the outside, such as supply chain issues, market shifts, or a shortage of recruitment, is considered a threat. It’s critical to foresee threats and take action before becoming a victim and stagnating your growth.

  • Cut-throat competition in the beverage and food industries

The increased competition in the food and beverage industry has posed a threat to Nestle. This industry is one of the most profitable as well as competitive industries.

  • Changing climate conditions will affect the production of coffee

Due to the changing climate and global warming, the production of coffee has taken a toll and Nestle has to find a way out of this. In addition to those factors, cut-throat competition for prices has aggravated the problem even more.

With this, we come to the end of the SWOT Analysis of Nestle. Let’s conclude what we have learned.

Nestle has come a long way it has become one of the most recognizable brands in the world. Nestle has been successful in creating brand loyalty and building trust in the consumer’s minds. Nestle has continuously changed with the ever-changing choices and preferences of people all over the world. Nestle still has some obstacles to pass and has a lot of opportunities to grow. We are sure that Nestle will overcome these obstacles and maintain its position as one of the best companies in the world.

Did you enjoy our research? Are you curious to learn more? For additional information, please visit our website . If you’re interested in Digital Marketing, you may also take Karan Shah’s  Free Digital Marketing Masterclass .

We appreciate you taking the time to read this.! We hope you learned something new about Nestle’s SWOT Analysis from this blog. If you liked it, please share it and leave a comment, and read more of our Case Studies !

nestle case study analysis

Author's Note: My name is Aditya Shastri and I have written this case study with the help of my students from IIDE's online digital marketing courses in India . Practical assignments, case studies & simulations helped the students from this course present this analysis. Building on this practical approach, we are now introducing a new dimension for our online digital marketing course learners - the Campus Immersion Experience. If you found this case study helpful, please feel free to leave a comment below.

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Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]

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Nestlé's Mission and Vision Statement Analysis: A Comprehensive Insight

4 minutes read

Nestlé , a multinational brand, has continually grown to become one of the most influential names in the global market. Its success trajectory is deeply rooted in its  mission  and  vision statements , which outline the strategic direction for the brand's activities. Furthermore, the core values of Nestlé play a significant role in shaping the company's image, decisions, and relationships with its stakeholders.

nestle-mission-and-vision-statement-analysis.png

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Nestlé’s Mission Statement

Nestlé’s mission statement is " to enhance the quality of life and contribute to a healthier future. " This mission reflects the commitment of the brand to creating a healthier and happier world, and it is this that has positioned Nestlé as more than just a corporation that manufactures food products; instead, it shows it as a proactive brand with a genuine interest in societal wellbeing.

At its core, Nestlé's mission focuses on two primary objectives: enhancing the quality of life and contributing to a healthier future. The first objective is accomplished by producing quality food products that not only meet but also exceed consumers' expectations in terms of taste and nutritional value. Nestlé's extensive portfolio, comprising thousands of products across several categories, bears testament to this commitment.

Their second objective of contributing to a healthier future reflects Nestlé's dedication towards preventative health care. The company has heavily invested in nutrition research to create products that are beneficial for consumers' health. This includes reducing sugars, sodium, and unhealthy fats in their products while enriching them with beneficial nutrients like whole grains, fruits, and vegetables.

Furthermore, this part of their mission signifies Nestlé's commitment to environmental sustainability as a means to contribute to a healthier future. From sustainable sourcing practices to striving for zero waste, the company incorporates eco-friendly practices across its business operations.

Finally, the mission statement does not solely revolve around what the company can attain. Rather, it is about what they can give back to society. Nestlé has made a profound impact on communities worldwide through various initiatives that align with their mission, such as providing access to clean water, promoting responsible farming practices, and championing nutrition education.

Nestlé’s Vision Statement

Nestlé's vision statement is " to be a leading, competitive, Nutrition, Health and Wellness company delivering improved shareholder and societal value. " This vision clearly outlines Nestlé’s ambition to not only be a frontrunner in the industry but also to make a difference in society, all while providing value to its shareholders.

Becoming a leading, competitive Nutrition, Health, and Wellness company signifies Nestlé’s aspiration to elevate its brand beyond just a food and beverage corporation. They strive to be at the forefront of providing nutritionally balanced products that promote wellness and healthy lifestyles. Their vision goes beyond mere words as evident in their investments in research and development, which drive product innovations focused on nutritional improvements. They also emphasize on continuously improving their existing product line, ensuring they adhere to the highest nutritional standards.

Their aspiration to become a "leading" and "competitive" company points towards their dedication to continuous growth and market expansion. Nestlé endeavors to remain a dominant player in the global food and beverage industry through innovation, diversification, and expansion. This constant strive for leadership and competitiveness is manifested through their operations in over 189 countries and their wide-ranging product portfolio that caters to various consumer needs and preferences.

"Delivering improved shareholder value" affirms Nestlé's commitment to its investors. The company seeks to provide sustainable financial performance and reliable returns to its shareholders. It does so by pursuing profitable growth, improving operational efficiency, and making strategic investments that offer long-term benefits.

Lastly, "delivering societal value" underscores Nestlé's recognition of its corporate social responsibility. They aim to operate in a manner that contributes positively to society and the environment. This aspect of their vision is seen in their endeavors towards reducing environmental impact, fostering sustainable sourcing practices, improving rural livelihoods, and promoting nutrition education.

Nestlé’s Core Values

The core values of Nestlé play an indispensable role in the brand's identity and business practices. These values are the pillars upon which Nestlé operates, acting as a compass guiding the behavior and decisions of the organization.

Firstly,  respect for diversity is deeply embedded in Nestlé's corporate culture. As a global company operating in multiple countries, Nestlé embraces and respects a diverse workforce and consumer base. This respect for diversity allows the company to gain insights from various cultures and perspectives, enhancing its ability to innovate and adapt in different markets.

Secondly, Nestlé shows a strong  commitment to creating value for the communities  they serve. This commitment is seen in their continuous endeavors to improve the quality of life for individuals and communities. Be it through providing nutritious products, creating employment opportunities, or engaging in social and environmental projects, Nestlé constantly strives to make a positive impact on communities.

Finally, an unyielding pledge to  sustainable development  is at the heart of Nestlé’s business operations. They strive to ensure that their activities do not harm but contribute positively to the environment. Nestlé’s sustainability initiatives include resource efficiency, waste reduction, responsible sourcing, and active efforts to reduce their carbon footprint.

These core values of respect for diversity, creating community value, and sustainable development form the very essence of Nestlé’s corporate character. They shape Nestlé’s culture, influence its strategies, and reflect its dedication to making meaningful contributions to society and the environment.

Nestlé Mission and Vision Statement Analysis Mind Map

To further aid in understanding these concepts, we present a comprehensive mind map detailing our analysis of Nestlé's mission, vision, and core values. This visual tool encapsulates the essence of Nestlé's strategic intent and the values that steer its operations.

The mind map begins with the company's mission at its heart, branching out into different sectors reflecting the brand's vision and values. By using this visual representation, readers can quickly grasp the connection between Nestlé's corporate strategy, mission, vision, and core values.

Nestle-Mission-and-Vision-Statement

Key Takeaways

Understanding Nestlé's mission and vision statements provides crucial insights into the brand's strategic direction and core values. These statements clearly express the company’s dedication to improving health standards across the globe, asserting Nestlé's commitment to contributing positively to society.

Notably, Nestlé leverages its vision statement to guide its strategic initiatives in the health and wellness industry while maintaining commitment towards enhancing shareholder and societal value. Its core values emphasize respect for diversity and a pledge to sustainable development.

To facilitate similar analyses for other companies, we recommend using Boardmix's pre-built Mission and Vision Statement Analysis Template . It's an effective tool that can help dissect complex statements into digestible insights for strategic decision-making.

Nestlé’s mission and vision statement analysis presents an intriguing study of how clear strategic direction and core values can bolster brand growth and market influence.

businesssmodel.png

Of course, you need to develop your business model to ensure your company has more precise goals and workflow. Diagramming software is an excellent tool to use when you map your business model. Boardmix provides a pre-built business model canvas template. The diagram is customizable, so you can edit the colors, texts, and shapes and insert images and stickers to make it your own.

Features of Creating a Business Model Canvas on Boardmix

Developing a  Business Model Canvas  is a strategic activity often undertaken by startups and established businesses to identify and plan out different business aspects. Boardmix online whiteboard has numerous features that make this process more intuitive, efficient, and collaborative. 

project-management-board

1. Interactive Whiteboard Interface Boardmix's digital whiteboard allows users to visually layout and connect various components of the Business Model Canvas, like Key Partners, Value Propositions, Customer Segments, etc. The ability to write, draw, or annotate on the board facilitates clear expression of ideas.

2. Real-time Collaboration  Boardmix’s collaboration feature enables teams to work on the same Business Model Canvas simultaneously. This real-time interaction allows for immediate feedback, brainstorming, and iteration, which can significantly enhance the canvas’s quality and relevance. 3. Drag-and-Drop Functionality  Reorganizing ideas and elements is made easy with Boardmix’s drag-and-drop functionality. This feature helps to effortlessly structure or restructure the canvas, making the modeling process flexible and adaptive to evolving business strategies. 4. Multimedia Integration  Supplement your Business Model Canvas with rich multimedia content. Integrate images, documents, or even video clips directly into the canvas to provide additional context or explanation, enhancing comprehension and engagement. 5. AI-Enhanced Brainstorming  Boardmix’s AI enhancement feature can stimulate brainstorming by suggesting related concepts based on the inputs you provide for your Business Model Canvas. This innovative feature can contribute to the development of a comprehensive and robust business model. 6. Ready-to-use Templates  Boardmix offers pre-made Business Model Canvas templates, accelerating the modeling process. These templates provide a well-structured format that can be readily filled in with business-specific details. 7. Secure Cloud Storage With Boardmix , you never have to worry about losing your work. Your Business Model Canvas gets auto-saved and stored securely in the cloud. This means you can access your canvas from anywhere and at any time. By utilizing these features of Boardmix Online Whiteboard, developing a comprehensive and visually engaging Business Model Canvas becomes an enjoyable and effective process. 

Join Boardmix to collaborate with your team.

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An Ethical Dilemma Faced by Nestle: Case Analysis Essay

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Case Description

Case analysis, solutions and strategies implemented by nestle.

Nestle is a global company that specialized in packed food products. Nestle is one of the leading international companies in packaged food industry established in 1905. International environment affects all operations and performance of the company, its organizational culture and climate. International staffing and development help Nestle to organize human resources (HR) in accordance with the needs of the company and its strategic goals.

The historical case of ethical controversy dealt with the processed cow’s milk or baby formula – the problem was that Nestle distributed this product in developing countries including underdeveloped regions of South Africa. Globalization and internalization of trade opened new opportunities for Nestle to sell its baby food products and allowed poor African women to use these products.

As a result of inadequate advertising and promotion campaigns, hundreds of children died because of food deficiency and lack of education about feeding among Africa women. The ethical issue was that Nestle did not take into account education and development level of the African women. Many of them could not read, so they used Nestle’s products paying no attention to labels and information on the package (Brisset, 1997).

The situation in Africa shows that globalization did not bring increased education levels and healthcare improvements to the less developed countries. Strategies and policies introduced by Nestle were considered unethical because of inadequate information processing and poor promotional messages.

The controversy was that the same strategies have been never considered unethical in developed countries with high literacy and education levels. The total global environment suggests that that the big international marketing companies can accelerate their growth and performance by adopting and introducing effective management practices and techniques (Brisset, 1997).

In developed countries, mothers always pay attention to instructions and suggestions given by the food producer. The company provides buyers with full information about the product and its usage. The critics underline that Nestle behaved unethically popularizing its baby formula in Africa with low literacy rates. Thus, cross-cultural management should be seen as that part of business activity that is social as opposed to genetically transmitted. For Nestle, it comprises ideas through which managers perceive and interpret the world, symbols they use to communicate these ideas, and institutions that enable individuals to become socialized and satisfy their needs.

For Nestle, it was appropriate to implement the BEST project aimed to introduce new methods of communication and service delivery. The need for the BEST was cre­ated by lack of skills and ‘old’ technology, lack of cooperation between divisions and size of organization, and new methods of doing business worldwide. Only in this case, Nestlé could compete on the global scale. The BEST project would help to disseminate knowledge and help employees to cope with new complicated tasks (Trevino and Nelson 2007).

Also, the ethical dilemma faced by Nestle was caused by resistance to change and lack of technical skills, ambitious timeline and lack of management support. The company did not focus on employee motivation and work design programs pursuing their own goals and development strategies. Most of the employees were afraid of changes they could not cope with. It is possible to say that it would be better to implement (and test) the BEST project in one of the divisions, and then, apply it to the entire organization.

In spite of the fact that the BEST project failed and cost Nestle $210 million it helped to improve communication based on technology and innovative systems as a part of the BEST project. Without IT change, Nestle would not be able to compete with national companies and respond to changing economic and social conditions (Trevino and Nelson 2007). New technology helped Nestlé to save time and improve information interchange.

Using the ‘old methods of doing business Nestle would not be able to compete on the national (and global) scale. The BEST project provided global connectivity and served as a foundation for national systems. Also, it linked the supplier and customer logistics into one process (Brisset, 1997).

The risks associated with dilemma were babies’ health. The case of Nestle shows that successful ethical management practices play a major and continuing role in the international arena, especially with the growth of large-scale international business organizations and the divorce of own­ership from management. The decisions and actions of management have an increasing impact on individuals, other organizations and the community. It involves set­ting policies, formulating plans, and trying to make the best ethical deci­sions possible.

All this is done in a context of how the international organization as a whole, and the HR manager in particular, the environment of the business, and the situation in which it operates. This may become even more important when the organization’s strategy is taking it into new countries, or different forms of alliance and collaborative ventures.

International organizations can contribute to the success of such plans by ensuring that social differences are considered when common policies are defined, that announcements are made in a way that is most effective for each culture, and that managers who have to operate across country borders understand the nature of the cultural differences involved, and adjust their own behaviour to obtain the best result. Attention to social issues can make a significant contribu­tion to the ethical and moral practices of business.

Brisset, C. (1997). The Bottle that Kills . Web.

Trevino, L., & Nelson (2007) Managing Business Ethics: Straight talk about how to do it right (4th ed). Hoboken, NJ: Wiley.

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