Nestle’: The Infant Formula Incident
Describe, in general, Nestle’s strategic orientation toward international business. Would you characterize Nestle as following a home replication, multi- domestic, global or transnational strategy? Defend your answer.
Multi- domestic and Global strategy would characterize Nestle toward international business.
Why Multi- domestic, multidomestic strategy tends to be used when there is strong pressure for the corporation to become accustomed to its products or services for local markets. When Nestle reputation was going down because of the baby formula, many companies and people didn’t want anything to do with them. Local markets, stores and hospitals strayed away from using Nestle products because baby after baby was dying or becoming severely ill. In other countries, they started using unhygienic water to stretch out the formula for more use because they thought Nestle was against breast feeding. As said in the textbook, for example, Kentucky Fried Chicken outlets in china are highly popular because they are perceived to reflect American values and standards, something that might be lost if the company tried to adapt the stores and products to be more like other Chinese food outlets. Nestle was once the worlds largest industry with many sales to infant feeding formula, but when they were attacked with this issue it made everything a complete mess. Nestle products had nothing to do with the issue; it was the mothers that was contaminating the product that made everything a catastrophe. Mothers were trying to stretch the formula so it wouldn’t be a hassle to get more and breast feeding didn’t have to take place. Why Global strategy? Global strategy is used when a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets. Nestle was a product that already adapted among everyone until one incident happen. Nestle had been charged with connection in the deaths of third world babies. Critics, journalist and people who had no clue what was going on diminished the fact that mothers were giving up breast feeding to use the formula. On the countryside of Mexico, the Philippines, Central America, and the whole Africa, it has been a vivid decrease in the occurrence of breast feeding.
What are the major criticisms of Nestle’s marketing effort in less developed countries? What specific marketing activities have resulted in the charges of unethical behavior leveled against the company?
One of the main problems is that the marketing practices of infant formula manufacturers, physician dominated medical systems, and the relationship between industry and health professionals has resulted in widespread propaganda about breast-feeding, false claims of the similarity among breast milk and false substitutes, and the devaluing of women’s awareness about breast-feeding in general. Nestlé approached its product sales and marketing activities in developing countries the same way that it did in developed, more prosperous countries. The consumers’ behaviors, patterns, and needs were not the same. Nestlé faced a lot of inspection and even had boycotts to deal with because their approach in less developed nations. There were environmental issues, like the accessibility of only contaminated water to combine the powdered formula with. When Nestlé first entered these developing countries they didn’t have a multi-domestic market course. They didn’t modify their products or marketing activities to the mores of the nations they were coming into. They sold the formula in the developing countries as they did in the US and other nations that are more developed.
What Specific environmental conditions in the Third World have contributed to the apparent misuse of the product in these countries?
This processed product by Nestle was much more nutritiously useful for the infant. But it...