Nestle: Operating in a Global Economy

Nestle is a large company with a history of more than 150 years. The company is committed to worldwide production and competition around the world to achieve stable growth and profitability. Competition in the world economy needs many challenges to achieve production goals and sell products of different cultures. Nestlé also sells third world countries that need affordable and nutritious food. The company is a market leader in a number of product lines and has established a solid foundation for sales and profitability.

Nestle is one of the world's leading organizations. Therefore it is not surprising that international strategy will become the center of its tactical focus. Nestlé is a multilateral company whose business responsibilities are dispersed throughout the region. Regional units enjoy autonomy in pricing, marketing, distribution etc. For example, in Nigeria, the development of road systems in Nigeria was incomplete, so Nestlé abolished the traditional distribution procedure that was taking place in the central warehouse. Instead, Nestlé built several small warehouses throughout the country. This shows the ability to respond to regional diversity. Nestle even hires local staff to act as a regional office. Because they can better handle business processes and customers. This will allow organizations to respond more effectively to local needs, thereby improving the company's market share and profitability.

Scope economy is an important part of Nestlé's growth strategy. Nestlé relies on its marketing expertise and an excellent position to expand product range. As production systems are shared with many different product lines, Nestlé can achieve economies of scale (Delios and Singh, 2005). In addition, Nestle is improving product quality by extending its product line in cooperation with other companies. For example, Coca-Cola and Nestlé have established Coca-Cola snacks to expand the company's position in tea that can be drunk. Products produced by Nestle and Coca-Cola include Nestea, Nestle's ready-to-drink products, Heaven ian tea, Sunshine tea. In addition, Nestlé has established a joint venture with the US food company General Mills to manufacture and sell breakfast cereals around the world. This strategy enables Nestle to achieve economies of scale as well as economies of scale (Girard, 2005).

Nestle is a nutrition, health, wellness company established through the merger of UK - Swiss milk company and Farine Lactee Henri Nestle. Currently, Swiss multinational companies have 443 factories in 86 countries and earn the highest incomes compared with other food companies. Nestle has about 8,000 brands including a wide range of products including coffee, sweets, instant noodles and others. As of the end of 2011, sales were CHF 86,426 million and net income was CHF 90.4 million. Nestlé has established several joint ventures, including the establishment of a global drinking partner with Coca-Cola Company.