I.

NAME OF COMPANY

Nestlé Company

II. VIEWPOINTS

 Paul Bulcke

He was appointed the CEO of Nestle in 1997 and the critical challenge in front of

him was to enhance the profitability of the company which already had mature markets.

A suite of process innovation initiatives were being launched by Bulcke so that financial

means can be generated to be invested in growth initiates which would result in

maximization of existing assets, maximize distribution logistics as well as enhance the

capacity utilization of the organization. The goals which were followed by Bulcke

involved strong investment in product innovation and it also involved speeding up the

processes associated with product development. Bulcke also identified better and fresh

growth opportunities in the mature markets through organic growth, this could be

achieved through by strengthening the innovation capacity of Nestle, as suggested by

Bulcke.
 III. TIME CONTEXT

This concern on how to sustain Nestlé brand in the market and keep the client intact with

its brand name arises in 2006, where the thorough concern for this matter begun during pre-

pandemic.

IV. HISTORICAL BACKGROUND

The history of Nestlé started out in 1866 when the Anglo-Swiss Condensed Milk

Company was created in Cham, Switzerland, with the participation of Charles and George

Page, brothers from the US. Henri Nestle was a pharmacist who was fascinated by the power

of nutritious food supplements to overcome the challenge of malnutrition. In 1867, he created

an infant formula for a baby who was struggling to accept mother's milk by using his product

called Farine Lactee Nestlé.

In 1905 Henri's company from Vevey merged with Anglo-Swiss, one of its biggest

competitors, forming the foundation of what we know as the Nestlé Group today. Henri

Nestlé used his surname, which means 'little nest', in both the company name and logo.

Throughout the years, it has become a symbol of security, family, and the company's care and

attitude to nutrition. As the world’s largest food and beverage company, it has driven by a
simple aim; unlocking the power of food to enhance quality of life for everyone, today and

for generations to come.

V. STATEMENT OF THE PROBLEM

The main problem of Nestle is the strategy on how to sustain its brand in the market and

keep the client intact with the brand name. Nestle tries to enter emerging markets ahead of

competitors, and build a substantial position in basic foodstuffs. As income levels rise, the

company progressively moves from these niches into more upscale items. It very much

focuses on developing local goods for local markets, however, and places relatively less

emphasis on its global brands in emerging markets. It also localizes its distribution and

marketing strategy to the requirements of the local market. When good opportunities are

available, Nestle acquires local firms.

Nestle is a very decentralized organization, with operating decisions pushed down to

local units. On top of this are both a SBU organization focused around food groups, and a

regional organization that tries to help rationalize production and marketing among nearby

countries. Helping hold the organization together is a group of managers who rotate around

the world on various assignments.

ALTERNATIVE COURSES OF ACTIONS

Alternative: 1

The Company ought to spend more on acquisitions than on the R&D.

Pros:

1. Acquisitions would increase total properties of the business, increasing the wealth of the

business. Costs on R&D would be sunk cost.

2. The company can resell the gotten systems in the market, if it fails to implement its

method. However, quantity invest in the R&D might not be restored, and it will be

considered completely sunk expense, if it does not give potential outcomes.

3. Spending on R&D provide slow development in sales, as it takes long time to present an

item.

4. Acquisitions provide fast results, as it provides the company currently established product,

which can be marketed quickly after the acquisition.

Cons:

1. Acquisition of business's which do not fit with the business's values like Kraftz foods can

lead the company to deal with misunderstanding of consumers about Business core values of
healthy and nutritious items.

2. Large costs on acquisitions than R&D would send out a signal of company's inadequacy of

developing innovative items, and would outcomes in customer's frustration.

3. Big acquisitions than R&D would extend the line of product of the company by the items

which are currently present in the market, making company not able to present new

ingenious items.

Alternative: 2.

The Business must invest more on its Research & Development instead of acquisitions.

Pros:

1. It would allow the company to produce more innovative products.

2. It would offer the business a strong competitive position in the market.

3. It would make it possible for the company to increase its targeted clients by presenting

those products which can be used to a completely new market segment.

4. Ingenious products will offer long term advantages and high market share in long term.

Cons:

1. It would reduce the earnings margins of the business.

2. In case of failure, the whole spending on R&D would be thought about as sunk expense,
and would affect the business at big. The risk is not in the case of acquisitions.

3. It would not increase the wealth of company, which could offer an unfavorable signal to

the financiers, and could result I declining stock costs.

Alternative 3:

Continue its acquisitions and mergers with substantial spending on in R&D Program.

Pros:

1. It would enable the company to introduce brand-new innovative products with less risk of

converting the costs on R&D into sunk expense.

2. It would offer a favorable signal to the investors, as the overall assets of the company

would increase with its significant R&D spending.

3. It would not impact the profit margins of the company at a big rate as compare to

alternative 2.

4. It would offer the company a strong long term market position in regards to the business's

overall wealth along with in regards to innovative products.

Cons:

1. Danger of conversion of R&D spending into sunk cost, higher than option 1 lesser than

alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lesser than

option 1.

3. Introduction of a smaller number of ingenious products than alternative 2 and high variety

of ingenious items than alternative 1.

VI. CONCLUSION

The key to success of this company is through a huge Research and Development

network within the food processing industry. With R&D as the competitive advantage,

Nestlé will maintain being the world's leading nutrition, health, and wellness company.

The company should devote in continuing to improve the nutritional value of their

products while enhancing the flavor.

It has institutionalized its strategies and culture to align itself with the market

changes and client behavior, which has eventually allowed it to sustain its market share.

Business has established considerable market share and brand identity in the urban

markets, it is advised that the company ought to focus on the rural areas in terms of

establishing brand loyalty, awareness, and equity, such can be done by creating a

particular brand allotment method through trade marketing tactics, that draw clear

distinction in between Nestle items and other competitor products.

VII. REFERENCES:

https://www.englishteastore.com/nestle-history.html

https://www.companieshistory.com/nestle/