Globalization Nestle

Topics: Globalization, Multinational corporation, International trade Pages: 16 (3801 words) Published: April 2, 2011
International Business

Q1. Using one specific company with which you are familiar, examine the actual and potential impacts of globalisation on that company. Explain the reasoning behind the points you make. Evaluate possible strategies going forward which the company might use to respond to the impacts of globalisation you have identified.

Table of contents

1. Introduction
2. Definition of globalisation
3. Nestlé’s Background
4. Impact & possible strategies
4.1 Porter`s generic strategies
4.2 Nestlé’s activities as a response to globalisation strategy 4.2.1 Table of Top 5 MNEs, ranked by number of host economies in their affiliates. 5. SWOT
7. Conclusion

World count: 2983

1. Introduction
Globalisation is a phenomenon which has greatly contributed to the development of current global existence in respects to financial, social, political and technological factors. It has come to define the very fabric of our modern lives. Multinational companies serve as a conveyor of this global phenomenon and one such company is Nestle, which is the subject of this report. Initially, the globalisation phenomenon and its dominant factors will be described. Subsequently, the Nestle multinational corporation will be introduced. The report will then delve into the means by which globalisation has developed in recent history and how this influenced Nestle. It will also discuss how Nestle has responded to these influences and how it has come to be the global entrepreneurial giant that it is today. Ultimately, the corporation’s current and future prospects will be analysed via SWOT and PESTLE analyses

2. Definition of globalisation
Globalisation – “….the process of transformation of local phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together. This process is a combination of economic, technological, social and political forces” (Croucher 2003:10).

Globalisation is a very wide and complex process which has significant impact on entrepreneurial enterprises in many ways. This process manifests its self by changing the international environment in terms of finance and economics, social aspects, technology and politics. Each of these factors may be broken-down further: • Economic – the growth of international trade indicates an increase of fdi and effective growth of multinational enterprise (MNE). This is a common characteristic of global business activities. • Political – characterised by the deterioration of nation states and emergence of new forms multi-national governance. • Social – through the use of world-wide media, global companies are facilitating the development of a global culture. This phenomenon impacts greatly on international relations, causing conflicts between some nations, and positive fusion with others. ( Wall, 2008; Wall 2010; Kothari 2002, Nickell S(1997)) • Technological – Through market power, global companies promote and enforce the use of their technology. This is primarily due to the globalisation-induced interdependence of companies and nations upon each other. As soon as companies with significant market power begin to use/produce new technology, the rest of the world follows, either due to aspiration or the lack of choice. This phenomenon is similar to that of peer-pressure. (Griffiths, 2008; Wall 2010; Kothari 2002;) Globalisation provides an opportunity for entrepreneurial ventures to expand their business internationally. Social conditions, as a repercussion of globalisation, have created opportunities for the entrepreneurial enterprises to expand their international businesses at a much faster pace. Government support also plays a major role because it may be essential to large corporations and international organisations to deal with challenges created by globalisation and economic liberalisation. In order to develop in such a competitive...
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