Nestlé's Business Strategies As a Multinational Corporation
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Nestlé's Business Strategies As a Multinational Corporation

As a multinational corporation, Nestlé's experience offers various business strategies that other executives, investors, entrepreneurs, and managers can adopt to benefit their own companies.

Born in Switzerland in 1866, Nestlé’s business longevity has made it one of the world’s enviable companies. Among its early strategic postures include venturing into foreign markets to seek growth opportunities, with London serving as its first international base in 1868. Decades later, they merged with an enterprise that produced condensed milk. This was Nestlé’s first move towards expanding its product base from the initial offering of infant milk food. According to Phil Kelly's International Business and Management (2009), the company has built its presence in over 190 countries and currently offers thousands of products worldwide due to its astute business sense.

The strategies adopted by Nestlé were initially based on its goal to expand its market reach and ensure investment profitability. However, sustaining the enterprise and its growth rate became one of its serious concerns. Thus, the company initiated steps to ensure its survival amidst uncertain socio-economic and political conditions.

Amonrat Thoumrungroje and Patriya Tansuhaj (2005) note how large international firms like Nestlé have developed such sustainability-oriented schemes. Nestlé, as Kelly (2009) writes, invested in emerging markets such as those in Eastern Europe, Asia, and Latin America was pursued. In "Building a Foreign Sales Base: The Roles of Capabilities and Alliances for Entrepreneurial Firms" (2003), Michael Leiblein and Jeffrey J. Reuer explain how technology and alliances with other nations can help global firms secure foreign sales. Nestlé benefited from such measure by tapping on its ability to innovate through its research and development program, as well as by negotiating with firms overseas that are interested in collaborating with the company.

Notwithstanding short-term measures to fuel business operations, Nestlé put more premium into strategies with long-term benefits. Consequently, its entrepreneurial adaptability involves taking into account the prevailing culture and social problems of other countries where it operates. For instance, Nestlé hired local singers as a marketing tool in Nigeria where political and economic instability reigns, making it unsafe to deliver goods. Based on Kelly's accounts (2009), these entertainers would travel to various towns and villages in the country not only to do a musical presentation, but as well as to conduct product demonstration. Another example involves China where inadequate infrastructure affects the transfer of goods. To address this issue, Nestlé constructed milk roads and chilling centers to distribute its products. This practice also gave farmers additional income every time they would deliver milk. Nestlé likewise placed several factories in the Middle East. The company opted to believe that existing conflicts in this region would be resolved and would lead to better trading opportunities later on.

Certainly, Nestlé has adopted various ways to sustain itself in spite of uncertainties. However, one area that calls for thorough research involves the voices of people that Nestlé as a company has affected through the years. These voices include not only its customers, but as well as Nestlé’s non-managerial employees, many of whom toil hard to ensure the quality of Nestlé products. Thus, the strategy postures of international corporations should not just be about profits and sustainability, but should also consider the welfare of workers.

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Comments (2)

Thank you Leann. Voted up. Hope to avail your continued support.

Thanks, Paulose. :)

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