Nestle: A Brief History of the Marketing Strategies of the First Multinational Company in the Ottoman Empire Abstract It can be argued that private companies accelerated the integration of the late Ottoman Empire with the capitalist world economy essay writing reading habit. Western companies shaped not only the Ottoman economy but also its social and cultural environments. Modern marketing was one of the most important instruments in this process. This article investigates—via a brief historical survey of the marketing activities of Nestle in the Ottoman Empire between the years 1870 and 1921—the interaction between Western firms and consumers.
The article explores how Nestle gained access to the urban Ottoman market and the methods it used for attracting the Ottoman consumer. Nestle’s sales efforts show that it had to adjust its strategies to local realities through a process of learning, adapting, and using the specific characteristics of its host society to be successful. Strategy Nestle describes itself as a food, nutrition, health, and wellness company. Recently they created Nestle Nutrition, a global business organization designed to strengthen the focus on their core nutrition business.
They believe strengthening their leadership in this market is the key element of their corporate strategy. This market is characterized as one in which the consumer’s primary motivation for a purchase is the claims made by the product based on nutritional content. In order to reinforce their competitive advantage in this area, Nestle created Nestle Nutrition as an autonomous global business unit within the organization, and charged it with the operational and profit and loss responsibility for the claim-based business of Infant Nutrition, HealthCare Nutrition, and Performance Nutrition.
This unit aims to deliver superior business performance by offering consumers trusted, science based nutrition products and services. The Corporate Wellness Unit was designed to integrate nutritional value-added in their food and beverage businesses. This unit will drive the nutrition, health and wellness organization across all their food and beverage businesses. It encompasses a major communication effort, both internally and externally, and strives to closely align Nestle’s scientific and R&D expertise with consumer benefits.
This unit is responsible for coordinating horizontal, cross-business projects that address current customer concerns as well as anticipating future consumer trends. International Strategy Nestle is a global organization. Knowing this, it is not surprising that international strategy is at the heart of their competitive focus. Nestle’s competitive strategies are associated mainly with foreign direct investment in dairy and other food businesses. Nestle aims to balance sales between low risk but low growth countries of the developed world and high risk and potentially high growth markets of Africa and Latin America.
Nestle recognizes the profitability possibilities in these high-risk countries, but pledges not to take unnecessary risks for the sake of growth. This process of hedging keeps growth steady and shareholders happy. When operating in a developed market, Nestle strives to grow and gain economies of scale through foreign direct investment in big companies. Recently, Nestle licensed the LC1 brand to Muller (a large German dairy producer) in Germany and Austria. In the developing markets, Nestle grows by manipulating ingredients or processing technology for local conditions, and employ the appropriate brand.
For example, in many European countries most chilled dairy products contain sometimes two to three times the fat content of American Nestle products and are released under the Sveltesse brand name. Another strategy that has been successful for Nestle involves striking strategic partnerships with other large companies. In the early 1990s, Nestle entered into an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca Cola’s worldwide bottling system and expertise in prepared beverages.
European and American food markets are seen by Nestle to be flat and fiercely competitive. Therefore, Nestle is setting is sights on new markets and new business for growth. In Asia, Nestle’s strategy has been to acquire local companies in order to form a group of autonomous regional managers who know more about the culture of the local markets than Americans or Europeans. Nestle’s strong cash flow and comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently, Nestle acquired Indofood, Indonesia’s largest noodle producer.
Their focus will be primarily on expanding sales in the Indonesian market, and in time will look to export Indonesian food products to other countries. Nestle has employed a wide-area strategy for Asia that involves producing different products in each country to supply the region with a given product from one country. For example, Nestle produces soy milk in Indonesia, coffee creamers in Thailand, soybean flour in Singapore, candy in Malaysia, and cereal in the Philippines, all for regional distribution. Submitted by:- Aniket Saraswat 500009199 BBA oil&gas V Sem