Nestlé Global Final Project
South University Online
For this final project the goal over the course was to examine several topics in regards to the economic analysis of Nestlé Global and its working environment. Quantitative and qualitative analysis’s are use to evaluate Nestlé Global success. The past and present history of Nestlé Global was analyzed. The nature and cost structure of Nestlé Global as well as the market structure in which Nestlé competes is examined. Recommendations are given regarding decision making on international trade and comparative advantage. Risk measurements are advised while examining and discussing Nestlé’s long-term decision making. Nestlé Global
In 1867 Henri Nestlé launched Farine lactée, a mixture of sugar, flour, and milk from a cow in Vevy, Switzerland. The ultimate birth of Nestlé Global began in 1905, when brothers Charles and George Page owners of Anglo-Swiss Condensed Milk Co. in America merged business with Henri Nestlé. Existing now for over 107 years Nestle Global is one of the largest companies worldwide, with approximately 32% percent of sales coming out of Europe, 26 % from the United States, 16 % from Asia. Nestlé Global is one of the biggest food producing companies remaining around the world. Following both World Wars a high demand for dairy led to the creation of a larger market. Nestlé has an A-Z market list in approximately eighty six countries and over four hundred factories. To name a few: Africa, Asia, Europe, the Americas, and the Oceania. Nestlé Global is known for over 8,000 brands with approximately 29 of which bring in annual sales over 1 billon CFH (Swiss Francs). In 1977, Nestlé Global made their second venture outside the food industry by acquiring Alcon Laboratories Inc., a U.S. manufacturer of pharmaceutical and ophthalmic products but by 2011, Nestlé Global would be known more for being a part of the food processing industry and topping the fortune 500 lists as the highest in profits (Nestlé Global, 2012, para. 6). Nestlé Global features a wide range of company products which covers almost every food and beverage category. Some of Nestlé’s major product lines include; Nesquik, a chocolate instant drink, bottled water, pet care food, and weight management products for Jenny Craig (Nestlé Global, 2012, para. 2). Opportunities arise during international opportunities as Nestlé uses its global knowledge as an insight on the information of worldwide markets. While other corporations face risk and failure unknowingly, Nestlé has access to secrets, potential products, and strategies to diversify their portfolio. International trading has its consequences, but access to financial markets allows them to borrow, collect, and, forecast economic conditions.
Comparative advantages led to a huge alliance that granted Nestlé the chances to expand their corporation towards a healthier lifestyle. American and European markets see Nestlé Global as a threat so Nestlé is forced to pursue growth within new business. Strategic partnerships enable Nestlé to stay on top of international trade. A great alliance in 1990 with American made carbonated soft drinks and beverage company, Coca Cola enabled Nestlé to release there bottle water. As one of the largest most successful corporations with a lengthy list of brands and products Nestlé Global has a competitive market structure in which they consider unmatched due to their global presence. With many brands and products Nestlé faces rivalry among competitors for some of those same products. Being a large corporation Nestlé Global has both international and local market competitors. Because of products offered by Nestlé Global closely relating specific brands in the international and local markets, Nestlé Global has competitors in these markets due to their increased amount of shares which poses a threat. Some of those competitors which pose threat to Nestlé Global are Sara Lee on the local corporation’s side and...
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