Identify the problems
Environmental issues are one of the key issues that could impact on the success of Nestle’s internationalization strategy. This Nestle’s global strategy case represented two major environmental issues which are economic factor and competitiveness factor. Economic factors are important influences on a firm’s motivation to embark upon international business and they have a profound impact on the benefits, costs and risks of doing business in different countries (Hill, Cronk, Wikramasekera, 2008, p. 258). In the case, during early 1990s Nestle Corporation faced the problem of sustaining growth rate when their major market place, Western European and North American had condition of reduced food consumption and inactivity of population growth rate. Therefore nestle corporation had to look at another emerging markets to maintain profit and choosing those markets is required doing the research to success the expansion.
Another environmental issue which impacts on success of business is competitive environment in the market. In this Nestle case, the problem was shown that Nestle lost its market share from another competitor, Coca-Cola. While coca-cola occupied about forty percent share in Japanese instant coffee market, Nestle only could able to capture four percent share because it suffered to fail to enter the market until the 1980s. It was caused by failure to adapt cold canned coffee trend in the 1960s and let Coca-cola to develop this segment in the market. Intension competitive rivalry is important for the multinational firm to gaining more market share. Less opportunity at home has made succeeding in international competition particularly important for firms, and the absence of buoyant growth has reshape the attitudes of government toward foreign penetration at home and the success of local companies abroad (Michael, 1986).
To solve this problem the company had to examine the economic...
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