INTRODUCTION TO INTERNATIONAL AND GLOBAL MARKETING

Nestlé internationalization

Worked by:

Borana Qytyku 2010491012

A.Y. 2020/2021
Introduction

The beginning of Nestle brand is so different from Nestle operating nowadays.

Nestlé history begins in 1866, with the foundation of the Anglo-Swiss Condensed Milk
Company. Henri Nestlé develops a breakthrough infant food in 1867, and in 1905 the company
he founded merges with Anglo-Swiss, to form what is now known as the Nestlé Group. During
this period cities grow and railways and steamships bring down commodity costs, spurring
international trade in consumer goods. At first Nestle was operating only in a few countries such
as Germany and France, and in 1874 began internationalization by connection a wider network
selling its products such as Austria, Belgium, Italy, Russia, Spain, Serbia, Sweden, and the
Netherlands, UK and so on. Since 1866 Nestle has established 495 branches to date and Nestlé
ranks within the first 10 in the Nestle worldwide rankings.

Various factors such as wars and changes within different states have had a direct impact on the
company and in reducing its ups and downs.

Nestlé Worldwide is a private limited multinational corporation with Sales of CHF 98.5 billion,
with a net profit 9 billion. It employs around 265,000 people and has factories or operations in
almost every country in the world.

Today Nestlé is the world's biggest food and Beverage Company.

Nestle products
Chronological history of Nestlé's internationalization

•In the beginning Nestle, operate with different product that we are learned to found it nowadays. It started in 1867 when
Henri Nestlé, the founder of Nestle, combines cow’s milk, wheat flour and sugar, and Nestlé develops it for consumption by
1876 infants who cannot be breastfed, to tackle high mortality rates. Around this time he starts using the now iconic ‘Nest’ logo

• After that the founder, sells his company, and three local businessmen started working to expand production and sales
1875

•1878 This was the first time Nestlé started competing with competitors, fierce competition develops between Nestlé and
Anglo-Swiss, when both companies start selling rival versions.
1878

•When Gregore Page dead, paves the way for an eventual merger with Nestle, and the plan for operating for the first time in a
new market such as USA.
1902

•Nestle for the first time begins to change the way of operates products by selling chocolates. For the first time, Nestlé begins to
develop chocolate with milk.
1904

•This idea brought nestle a big increase where nestle in 1905 had increased its scope with 20 factories, and starts using overseas
subsidiaries to establish a sales network that spans Africa, Asia, Latin America and Australia
1905

•External factors began to have influence at nestle. With the outbreak of the first war causing a shortage of raw material supply
1914

•The company is recovering, but it has been shaken again which reduces the purchasing power of the consumer. The company
change strategy, and started operating with products such as Nescafé coffee are launched.
1920

•Nestlé later becomes one the first companies to apply the WHO code on breast-milk substitutes across its business.
1970

•2005 The company expands in the US, Eastern Europe and Asia, and targets for global leadership in water, ice cream and
animal food
2005

•2005-nowdays Nestle develops its operations in new products and targets for global markets
Nowdays
Internalization process

Peter Brabeck had a lot of work to do when he was appointed CEO of Nestle in 1997 because
working at the regional level and with a decentralized structure meant that Nestlé's efforts were
tremendous in terms of recognizing local tastes and marketing.

This structure allowed local managers to have the ability to change the taste of products, their
packaging and their production formula exactly according to what customers were looking for in
each geographical area. This centralization combines it with geographical resources through its
strategic business units. In this way, operational efficiency is tremendous without having to give
up local market trends or movements

 Nestlé’s 8 strategic business units are led by a regional market director who is responsible
for achieving objectives in each country or market. In the same way, there is a Country
Manager figure that has the power to suggest or make strategic decisions in his particular
market.
 Nestlé has opted for a multi-country strategy of internationalization, which does not
ensure high pressure to reduce costs but does have a high interest in the tastes and
preferences of its customers. One of its main objectives is to find a strong differentiation
of products and services worldwide, not paying as much attention to the costs generated
 Local regional and national adaptation
This with each geographical area in which it markets its products, Nestle not only suits
the consumer in the country, but also where it can be found regardless of its origin and
the various circumstances around.
 Entry modes
Exports, direct investments with its subsidiaries, joint ventures and company acquisitions,
and contractual systems such as licenses

Own
Export
subsiadiasies

Direct
Joint- Venture
Invesment
Neslte's
entery modes
Acquisition of
companies

Contractual
License
Systems
  Exports reached 62 countries around the world, 82% in Europe, other markets, followed
by America, Africa and the Middle East. Furthermore, it is common to carry out exports
from established subsidiaries
 Nestlé, based on a multi-country strategy, has chosen close and reliable relationships with
a high degree of decentralization of subsidiaries in each country internationally. The
parent company is located in Switzerland where the control and coordination of all
subsidiaries is performed. Nestlé has several joint ventures throughout its history: Nestlé
Colgate Palmolive, born in 2003 and headquartered in New York, and Nestlé and Infood.
 Enterprise purchases: In 2006 the multinational company bought the firm Jenny Craig
specializing in weight loss diets
 License: In 2014, Nestlé entered into an agreement to acquire all production rights from
the Canadian company Valeant Pharmaceuticals International to market some of the
leading cosmetic dermatology products in Canada and the United States.

Uppsala Model

Nestlé's internationalization process did not occur in a series of incremental steps

 There were major turning points in its international development

Expanded on such a global scale in a short amount of time therefore vastly different from
what the Uppsala model describes
Nestle operation strategy
Nestlé's long-term value creation model

Maximize

Long-term
Balanced pursuit of top-line and bottom-line growth with capital efficiency Shareholder

Improve Value
Increase growth Allocate
margins capital
prudently

Increase growth

Nestle competes in attractive and growing categories, having a global footprint with a presence
in 187 countries. The giant's portfolio includes more than 2,000 brands, from global icons such
as Nescafé to local favorites like Bear Brand. Among these, 34 brands generate over CHF 1
billion each in annual sales at the retail level.

Nestle continues to prioritize investments to stay relevant, address the latest consumer trends,
and win in every category and market in which it operates. This requires setting clear priorities
and allocating resources behind activities that create more value, either through growth or
efficiency.

Improve margins

Nestle are disciplined in cost management and deliver efficiency at all levels. This approach
enables us to free up resources to reinvest in product innovation and brand building, creating
value for consumers as well as shareholders. Consumer-facing marketing expenses increased by
3.4% in constant currency.

Allocate capital prudently

Nestlé’s priorities are to invest in the long-term growth and development of the business,
increasing shareholder returns and Sharing Value.
To expand the company's core food, beverage and nutritional health business. In doing so, Nestle
aims to maintain a conservative yet efficient capital structure that provides flexible access to
financial markets. .

Creating Shared Value: The way we operate

No other food and beverage company has the global resources and local know-how to make
positive impact at the scale and pace of Nestlé.

Conclusion

In conclusion, the global economy is what changes the international market. Some of the driving
forces are regional economic agreements, market needs and costs, technological advances, global
economic growth and leverage opportunities play important roles in bringing these organizations
to such a market. Nestle which is involved in the industry of food and beverages, like any other
organization, also has some driving forces influencing its decisions to enter the international
market. Its brands and products are popular, making them acceptable to consumers of different
age groups. The way Nestle operates today leaves little room for error and failure, and making
the giant even more successful.

In addition everything inside it functions as a single and adapting to what the market demands.

My analysis will hopefully be a clear reflection of all of this.

Reference

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