Term Paper on "Nestle Can Already"

Term Paper 4 pages (1265 words) Sources: 5

[EXCERPT] . . . .

Nestle can already be included in the category of multinationals whose presence in several industries rather than just one is equivalent to a complete vertical or horizontal diversification. In this sense, it is difficult to evaluate only one of its presences. Nestle has diversified from the traditional food-related products, such as dairy products, breakfast cereals or chocolate and ice cream, into petcare, childcare (baby foods especially), wellness and nutritional solutions, as well as beverages and bottled waters. Its portfolio of brands and products is thus vast.

If we look at the key industry it is competing in, the food-related industry, the main competitors remain the Danone and Kraft Foods Groups, but, again, as previously mentioned, Nestle has followed a diversification policy that included the purchase of mineral water producers etc.

Many of the industries Nestle is operating in are already quite mature and one of these is the yoghurt industry, where Danone is already an established dominating brand. This is an important threat for Nestle in these markets. Most of the industries Nestle operates are dominated by large multinational players (like Nestle itself, obviously). For example, the chocolate business boasts the likes of Cadbury, which has about one third of the British chocolate market alone.

All the industries Nestle is competing in are characterized by an incredible rhythm of innovation and by the constant creation of new trends and products. Obviously, this is the only way that the companies can manage to compete in a very competitive market environment.

Nestle started out as a producer of milk food for infants, in 1867. Ever since its creation at that time, Nestle has supported a sustainable development and long-term plans rather than short-term profits, as mentioned in the company's business principles. The company's history saw it move from the initial market segment it approached to all food-related products, nutrition and healthcare etc.

Diversification and expansion was achieved both by acquisitions, as was the case with the American food producer Carnation, in the 1980s, and by strategic partnerships with other companies. An example in this sense was Nestle's partnership with Coca Cola in the early 1990s, an alliance in ready-to-drink teas and coffees. The alliance meant that Nestle could benefit from Coca Cola's worldwide bottling system and expertise in prepared beverages.

The company sustains and encourages a constant product portfolio diversification and expansion through two means: innovation and renovation. What this means is that the company is constantly both reactive to the needs and requirements of its targeted groups of consumers and proactive, by innovation, to create and implement new consumer trends on the market.

Nestle has a very conscious consumer services policy, starting from its policy that puts the client in the middle of all actions of the company. The commitment to the consumers is shown by elements such as the Nestle Seal of Guarantee and a constantly nurtured relationship with the clients that helps Nestle answer their requirements and produce the exact products that are needed on the market.

Nestle strongly supports that the most fundamental consumer expectations for food are that it is safe and provides adequate nutritional value. The other concern is more product-specific, and involves aspects such as flavor, texture, convenience or added health and wellness value. Lifestyle and environment in urban societies have changed markedly over the past decades, placing new demands on diet and metabolism. The "Nutrition in Action" program shows the educational activities in which Nestle USA was involved.

The company has come up with the motto "Good food-good life" to address and promote its health-directed strategy. This motto is currently supported by a four pillar strategy that is based on operational efficiency, innovation and renovation, the whenever, wherever, however principle and on consumer communication.

Nestle has always assumed a leadership position on the global market and… READ MORE

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