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Course: International Business

Course Code: INB 372
Summer 2020

Sec: 18
Instructor: TFZ

Marking Criteria & Cover Page

Student Learning Outcomes Criteria SLA Received

SLO-1: Comprehend global
business environment including
its economic, political, legal and
socio-cultural components
SLO-2: Identify different
components of culture,
distinguish how workplace
culture varies across national
boundaries
SLO-3: Comprehend
international trade theories,
trade patterns & trade blocs.
SLO-4: Summarize and interpret
international business strategies
and various entry modes.
SLO-4: Summarize and interpret
international business strategies
and various entry modes.
Question
Number
2: Exceeds Expectation 1
1: Meets Expectation
0: Doesn’t meet Expectation
2: Exceeds Expectation 2
1: Meets Expectation
0: Doesn’t meet Expectation
2: Exceeds Expectation 3
1: Meets Expectation
0: Doesn’t meet Expectation
2: Exceeds Expectation 4
1: Meets Expectation
0: Doesn’t meet Expectation
2: Exceeds Expectation 5
1: Meets Expectation
0: Doesn’t meet Expectation

North South University

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School of Business and Economics

Department of Marketing and International Business

Semester: Summer 2020

Course Code: INB 372, Secti on: __18__

SLA Case Study

Faculty: TFZ

Date: 17/09/2020

Marks obtained:

(This space is for faculty’s usage. Do not write here.)

Name ID
Usama Murad 1620844630
Mir Waiz Usayed 1330329642
Chowdhury Nabila Masud 1512763030

1. Does it make sense for Nestlé to focus its growth efforts on emerging markets? Why?
It completely make sense for Nestle to focus its growth efforts on emerging markets. From the

very begging of the company the company wanted to invest in abroad. They always wanted to

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expand their business. They establish their first foreign office in London. Because of the size of

Swiss market, they started expanding their business across the world. It was the main reason

behind their vigorous expansion strategies around the globe. Nestlé set up dense milk and newborn

child food preparing plants in the United States and Great Britain in the late nineteenth century and

in Australia, South America, Africa, and Asia in the initial thirty years of the twentieth century.

After the fall of the berlin wall, Formation of EU presented better opportunities for nestle to

expand their market. European market became accessible for the foreign seller. China was among

them also and was more accessible. It was a golden chance for those company who wanted to

expand their business in abroad. For a company like Nestle with international ambition, it was the

perfect trade situation. Nestle saw their chance to serve new diverse market and create new

products. Nestle get the chance to become more diverse company and Nestle take this opportunity

and make their growth in emerging market.

After that they brought many companies in many countries. They started to produce pet food, helth

care product, chocolate and lot of other things. From a small company of Swiss, they become one

of the biggest production conglomerates in the world. By focusing on the growth I emerging

market, now they produce more than 10000 products and they own more than 2000 brands all over

the world.

From this we can understand that it completely make sense for a company like nestle to focus its

growth on emerging market because by doing that they are now one of the biggest production

chain and one of the biggest company in the world.

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2. How is culture influencing Nestlé’s product development and marketing strategies around
the globe?
Nestlé's item improvement is to a great extent affected by culture. Food has consistently been a
local product. A Bavarian soup won't speak to noodle darlings in Taiwan. In this manner,
Nestlé has been practicing a difficult exercise by attempting to at the same time accomplish
economies of scale but then cater to a variety of cultural preference. Their moto is “think
global, act local”. Which help them to reach the people and people accept them broadly for
their marketing strategy based on the culture.

Nestlé's showcasing procedure likewise impacted by culture. Diverse culture requests different
marketing technique. Nestlé for the most part sees how to adjust their worldwide and nearby
brands to the given business sectors and locate an appropriate specialty to put its items.
Through an extraordinary cycle of research and improvement in nearby associates, Nestlé can
discover certain item variations that are appropriate for a given market. For instance, their
worldwide brands KitKat and Maggi are very well adjusted in different country and market. In
Japan, for instance, KitKat is sold in various flavors that can't be found somewhere else.
Indeed, even inside the nation itself, Nestlé actualized some variations for just a little piece of
it. These varieties extend from yubari melon and prepared corn from Hokkaido Island to
cherry and bean seasoned chocolate bars in the Tokyo area. A similar tactic is additionally
utilized for the Maggi brand, where various kinds of soup are intended to fit individual market
preference. They also the biggest producer of halal food in the world for Muslims. Nestlé is a
“glocal” company that thinks global but acts local.

Nestlé for the most part sees how to adjust their worldwide and local brands to the given
business sectors and locate a reasonable specialty to put its items. Through an extraordinary
cycle of innovative work in nearby partners, Nestlé can discover certain item varieties that are
appropriate for a given market. From this we can get that culture plays a vital role in product
development and marketing strategies and they are handling it very well from their beginning.

3. Do you think the formation of EU might have benefitted Nestlé? Justify your answer.

As we know, Berlin wall has a great history. We all know about that there was a wall between
east and west Germany who divided berlin into two separate land. At that time some countries

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were supporting east berlin and some were supporting west berlin. Because of that, many
countries started to minimize their trade action with rivalry country. It was very difficult for a
company to expand its business smoothly during that time. Many businessmen were facing a
lot of trade barriers. Nestle, back then a well-known company of Switzerland. They were
growing very fast but because of berlin wall nestle was not capable enter in many countries
such as Portugal, Greece and some countries of Europe.

In 1989, finally the two government decide to form a common government as democratic and
communist. The berlin wall fallen down. So, all the countries started to join in European
Union. After fall of berlin wall almost 10 new countries joined EU. It was great opportunity
for Nestle to expand its business all over in EU countries. Nestle can enter in a new market
and sell their products in different market now.

There were some EU trade advantages also which can made an easy way for Nestle to grow
faster. Some advantages were-

1. Back the then political situation was stable in EU countries. So, nestle could enter in any
country without any political obstacle. The economic level was also in a good position that
every country would like to invest in EU countries.

2. Nestle was trying to deliver a nutritional food to the consumer. So, they started to exports
more in different countries with a lower price to create a competitive advantage.

3. New counties were accepting nestle with a very positive note so nestle started to plan
establish their factories and operation in different countries by using the positive environment
and resources of that specific country. Thus, they could reduce their investments.
4. Because of the formation of EU, it was then very easy for nestle to move equipment’s and
labor one country to another. People were also interested to income in Euro. Back then Euro
was very valuable currency.

5. As time passed, nestle got to know the different preferences of consumer from different

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country. So, nestle started to process towards consumer market with a large size of products
and distributed all over the EU countries. The result was very much positive for nestle and
they decided to set their operations and production on the basis of consumer taste of that
specific country by maintain healthy ingredients.

Now EU has trade agreement with more than 70 countries and nestle has operation in 80
countries. We can say that, after berlin wall fall, formation of EU trade system proved very
actionable and benefited for Nestle company.

4. How would you describe Nestlé’s entry mode across the globe? Explain with examples.

 In terms of entry mode across the globe Nestlé’s uses almost every tactic.
 When they first started expanding into the global market, they started by buying off
companies with similar or complimentary roles. Ex: It first made a branch in
London and merged with a Condensed Milk company, expanding into milk
production beyond their Swiss origin. Establishing plants in US and UK
 They kept diversifying acquiring many properties, such as Nescafe and Maggie,
Cross & Blackwell, Findus, Libby’s, Stouffer’s, Carnation, Rowntree, and Perrier.
And making more nutrition products such as chocolate, coffee, soup, yogurt, water
and frozen foods.
 The helps them maintain a large supply line across multiple different countries.
This also gives them first mover’s advantage.
 Of course acquisition of different foreign companies is but the start of their
ventures. In order to gain market share the company, they try to create an image of
global company serving local needs, as they know Food will always have to be
locally accepted.
 Nestle is not generally inclined to go through the expensive process of setting up its
brand name in the prospective markets; rather the company prefers to acquire local
companies which are known in the indigenous market.
 This also helps Nestle to overcome the cultural hurdles & resentment to the foreign

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brands. Culture is their biggest hurdle.

 Nestle is known for making products that locally and culturally more accepted, and
chooses to produce products based on local cultures. EX: It is the largest foreign
brand supplier of halal products in Muslim countries while also promoting no halal
product in non-Muslim countries.
 While there are some brands that are universally the same many brands are
tweaked based on the location they are in, Maggie noodles in India with is curry
and masala flavor is vastly different from the one in Taiwan or Japan.
 To summaries, Nestle acquires multiple companies and thus products, to expand
globally, to gain market share they acquire local brands and products, to further
solidify their presence they tweak and customize their product based on the local
preference and culture. Based on extensive market research. This is how the
company enters across the globe.

5. Critically analyze Nestlé’s business strategy for international markets.

 Has a business strategy for each country on the international market it operates
on.
 The company owns 2000 brands, but only 750 of them are registered in more
than one country, and only 80 are registered in more than 10 countries
 They have different strategy for developed and emerging markets.
 In developed markets, they focus on expanding their brands image promoting
new products, acquiring different assets and products there by gaining market
shares. In places like the US, EU, Australia. Nestle spends billions on corporate
mergers of large companies and corporation in order to expand
 In developed countries they create and introduce new and unique products like
different and unique flavored food products like Wasabi or Matcha KitKat.
They do sell their normal products by they are an established market prone to
stagnation. So they do their best efforts to diversify. E.X: when they bought
stakes in cosmetics to become part for a different market industry sector.

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 In developed countries they spend more on R&D and large mergers. Spend
their efforts marketing new products and diversifying.
 In developing countries that are an emerging market, Nestlé’s biggest hurdle is
that they are not a local company and are not locally accepted, the consumer
base are not as well off financially and thus may not buy branded products, they
may not even recognize the brand.
 As such to overcome this the company merges, acquires local or smaller scale
brands, supplier, product and production lines.
 By gaining local entities into their brand name they can overcome the some of
the cultural hurdles.
 In emerging markets, they only sell their best received and most general
products, such as the most commonly sold coffee, baby food, cereal and
candies.
 By acquiring local supplier, companies and products they make their
production process smoother.
 While in developed countries they would diversify to produce varies number or
products. In developing countries they focus on making their supply line as
efficient as possible in order to reduce costs and thus make the most amount of
profit.
 As such they prefer being a local company. A company that serves a global
market while operating locally.
 They cater to each unique culture of each country they operate on. In Japan
they may have unique flavored candies, while in India they may uses local
spices to make their noodles taste more favored by Indians. In USA they may
the most sophisticated milk production techniques, while in India they may hire
and buy off milk from hundreds or thousands of local farmers.
 Nestle spend a huge amount of money doing marketing research one each
country they operate on in order to maximize their market share. They are one
of the largest nutrition company in the world and became such by conforming
to the will of their consumers in each environment they work under, all they
while constantly diversifying, growing, and becoming more efficient and

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eternally learning overtime.