Nestle Company Cereals Assignment

Added on - 21 Jul 2020

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Nestle Company-Cereals(in Mexico)
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Background of Nestle......................................................................................................................1Background of business environment of Mexico............................................................................3Analysing the business scenario......................................................................................................5CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONThe present report is based on Nestle company which is planning to expand itsoperations in Mexico by establishment of a company in that country. Nestle is the famousSwiss transnational food and drink company which is regarded as the largest food companyin terms of revenue. It is producing a wide range of products which include baby food,medical food, bottled water, breakfast cereals, coffee, tea, confectionery, dairy products, icecream and pet foods as well. Also, there is a joint venture between Cereal partners worldwideand Nestle which was established in the year 1991.Background of NestleNestle is the world famous Swiss company which is operating worldwide and isproducing much food and drink products for the customers (Pasparakis, Haase and Nestle,2014). The form in which Nestle is at present time was established in the year 1905 as Nestleand Anglo- Swiss condensed milk company. The company is having about 500+ factorieswhich is operating in about 194 countries of the world and employing about 400000+employees all around. Nestle as the company and its operations grew during the 1stand 2ndWorld War and this expanded its operations beyond the condensed milk which it wasproducing in the starting. On the Six Swiss Exchange the company was primarily listed, thenlisted on Swiss Market Index and secondarily, listed on Euro next (Business Summary,2017). During the 1990, at the time when the whole world was transforming with theintroduction of liberalisation, privatisation and globalisation. Nestle also developed as theyear was proved to be favourable and company developed more or less as an integratedtrading area.There were also many of the major merger and acquisition of the company like that ofSan Pellegrino in 1997, Spillers Pet food in 1998 and in 2002 of Ralston Purina (VonMinckwitz and Hanusch, 2014). In the same year of 2002, it also acquired two of the mainNorth American companies which include merger with US ice cream into Dreyer's and thatof Chef America with about $2.6 billion. During the same time, Nestle came into the joinedbid with Cadbury and they both purchased the American company Hershey's which was aconfectionery competitor. And after the year 2010, Nestle focused on producing the nutritiousand healthy food as because of the threat of government increasing regulation and decliningsales of confectionery food in global market. Thus, the company began producing products1
which were linking food product with that of pharmaceuticals (Corporate Governance Report,2017). Nestle also opened Health Science branches of the company which was aimed inproducing products which were both healthy and nutritious like drinks, protein shakes etc.which were good for malnutrition, diabetes and digestive disease. And in the present year2017, Nestle announced that it will likely to decrease the sugar content by 10% in itschocolates and bars like Kit-Kat in 2018 and also in its breakfast cereals.According to an online global survey in the year 2015 bythe Reputation institute,company was scored 74.5 out of 100 on the basis of its reputation among the customers. Themarket capitalisation of Nestle is about 231 billion Swiss francs which is about $247 billionmore than that in 2015 which make the company the biggest food company of the world. Inthe first nine months of the year 2017, there was 2.6% growth in the organic products andwith 1.8% real internal growth and pricing was about 0.8%. There was a decrease in theforeign exchange and sale by about 0.4% and the total reported sale was about 65.3 billionCHS (Business Summary,2017). In North America, the sale was flattened because of thenegative category of dynamic, Brazilian sale was affected because of the difficult in tradingenvironment, in Mexico and parts of Latin America there was a good growth.Nestle is a Swiss company which is providing a wide range ofnutritious and healthyfood and drink products and is operating in almost all the parts and regions of worldincluding America, Asia, Oceania and in Africa. It was founded in the year 1866 by HenriNestle and having its headquarters at Vevey, Switzerland and is employing about 400000+employees all around the world (Corporate Governance Report,2017). At present, the CEOand Director of Nestle is Ulf Mark Schneider since 2016 and the Chairman of the company isPaul Bulcke since the year 1979. There are different types of committees which are operatingin the company and all of them are having their own importance in the company and its legalstructure. The committees include Chairman and Corporate Governance, Compensation andNomination, Audit and Finance Committees. Chairman and Corporate GovernanceCommittee include the Chairman or CEO, the two Vice Chairmen and the rest Board ofDirectors. The work of Corporate Governance Committee is to provide recommendations tothe Board of Directors by analysing the corporate governance of the company. Compensationand Nomination Committee include one of the Vice Chairmen andtwo Board of Directorswho involve in the remuneration of the members and also discuss the candidates of board.2
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