International Business and Globalization Strategies for Nestle

This report analyzes Nestle's international business and globalization strategies, addressing challenges and opportunities in the global market. It examines the company's issues in expanding internationally, including ethical concerns, and proposes techniques to engage target audiences, emphasizing the use of technology and CSR activities. The report explores the importance of business structure, international trade theories like the product life cycle, and strategic considerations for product customization and diversification. It also discusses the significance of brand value, the role of government decisions, and the need for high-quality products and sustainable growth. The analysis covers the application of tools like Porter's Five Forces and PESTLE analysis, along with strategies for competing with rivals. The report concludes by stressing the importance of market surveys, understanding foreign customer needs, and studying external environments to ensure successful international business operations.

INTERNATIONAL BUSINESS
AND GLOBALIZATION

INTRODUCTION
• Globalization has become one of the most crucial aspects of all the
organizations in the modern times. The chosen company Nestle has
been facing many problems while expanding to other countries
(Nestle.in 2020).
• This company is based in Switzerland and delivers food products to
their customers. Due to globalization, several changes have come
across in its international business strategies.
• The economic, cultural and geographical issues have created several
problems while they expand into other countries all over the world.
• The external environmental factors are the most crucial factors for
Nestle to globalize into several other countries (Johnson 2016). The
decision of expanding frm national market to global market has to be
taken from several perspectives.

ISSUES FOR NESTLE IN GLOBAL
MARKET
• It has been acclaimed that Nestle is one of those global competitors
that has lost their reputation of late. In order to be global, a
company has to abide by different issues in their target countries
(Johnson 2016).
• Otherwise, they cannot maintain their reputation properly.
Similarly, Nestle has lost their reputation because of issues like
conducting marketing promotions in unethical manner,
encouraging child labor for cost savings, indulging in manipulation
of uneducated mothers, using unethical pricing strategies for their
customers.
• All these issues have hampered their presence in the global market.
This same scenario can come up for other global organizations.

TECHNIQUES TO IMPRESS TARGET
AUDIENCE
• Nestle has learnt from their past experiences that they should always
use some techniques that would enable them to come close to their
target audience.
• The use of technology is one of those measures that must be
implemented in their operations. They must keep in mind their
reputation had been lost because of their unethical practices.
• This news was spread through social media. Now they must make use
of social media to connect with their customer base in all the countries
(Johnson 2016).
• If companies operate in poor countries, they should invest in CSR
activities that would enable their customers to restore faith on them
and this activity would contribute to social and economic growth as
well.

IMPORTANCE OF BUSINESS STRUCTURE
FOR INTERNATIONAL BUSINESS
• The business structure must be formulated properly by all
organizations so they can contribute to their global success
in economic and cultural perspectives.
• Some analytical tools that must be used by the organizations
are Porter’s Five Forces, PESTLE analysis and some more.
• All these analytical frameworks would allow global
companies like Nestle to have an idea on their strengths and
weaknesses.
• Nestle should also care for these weaknesses and take
proper actions to improve them.

INTERNATIONAL TRADE THEORIES
• The multinational companies must aim at following international
trade theories that would enable them to act as per the needs in
particular countries and its business environments (Johnson 2016).
• The product life cycle is one of the trade theories that Nestle
should look up to. Then they can bring new products in their
product portfolio and cater to the overall needs of their customers.
• Nestle has several global competitors in the food industry like
Unilever, Pepsico, Hershey and others (Nestle.in 2020).
• In order to compete with these companies and gaining competitive
advantage, Nestle must use global strategic rivalry theory and this
can only be possible after conducting thorough marketing surveys
among customers.

CONSIDERATION OF SITUATIONS
ON STRATEGY IMPLEMENTATION
• The company Nestle should look up to formulate some
strategies so they can provide their products based on the local
population and health situations.
• This also depends on the weather and climate of the target
country (Buckley and Ghauri 2015). They should look to enter
into emerging Asian market that would let them avail cheaper
cost labors from local markets.
• They will also have to take marketing decisions based on their
rivalries with local companies.
• Nestle should also focus on new product innovation and
manipulating government decisions in their favor (Kolk 2016).

DIFFERENT TYPES OF STRATEGIES
• Customization of products is one of the strategies that will help the
company to emerge as the most successful companies in the new
destinations (Buckley and Ghauri 2015).
• Similarly, Nestle has also applied this strategy so they can gain upper
hand regarding their strategies. In terms of Nestle, this strategy has
proved to be more successful than the universal approach.
• The universal companies have to sell their products depending upon the
logistics and supply chain strategies properly.
• On the other hand, companies like Nestle should take care of political
discourse as they do not conduct their business in emerging economies
(Nestle.in 2020).
• The supply of raw materials from local farmers like milk products will
contribute to better lifestyles of local laborers too.

PRODUCT DIVERSIFICATION AND
BRAND VALUE
• The international companies should arrange their strategies by
the implementation of product diversification.
• This will allow the companies to innovate new products based
on the economic condition of the region (Rothaermel 2016).
• The pricing strategies will also depend upon the similar
approach. Nestle and other large companies must look forward
to use their brand names as their strong points.
• This will support them to increase their market share. In terms
of international growth, companies can also use acquisition
strategy to penetrate into the new markets (Thompson,
Strickland and Gamble 2015).

IMPORTANT CONSIDERATIONS
FOR STRATEGY IMPLEMENTATION
• The expansion into international markets is always a big risk for
all the organizations. In this scenario, Nestle should aim at
providing best quality food products to their customers
(Morschett, Schramm-Klein and Zentes 2015).
• Any slight decrease in their product quality will lower their
position. Both short term strategies should be focused on so the
companies can ensure sustainable growth of the companies
(Forsgren and Johanson 2014).
• In the food industry, it is important that Nestle will look after the
health and well being of all their customers. Increased nutrients
will cater to the health benefits and better nutrition. This will
keep their good reputation in the market.

CONCLUSION
• In the concluding section, it should be mentioned that leading
the international business industry is a very difficult job.
• It has been very challenging for Nestle from different
perspectives. Organizations in the international sphere must
understand their market value and use their strengths for the
increase of their market share.
• The implementation of strategies must be made after
completing proper market survey and understanding the
needs of foreign customers.
• The study of external environments is deemed essential to
avoid any kind of challenge in the future.

REFERENCES
• Buckley, P.J. and Ghauri, P. eds., 2015. International business strategy: theory and
practice. Routledge.
• Forsgren, M. and Johanson, J., 2014. Managing networks in international business.
Routledge.
• Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
• Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1),
pp.23-34.
• Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international
management (pp. 978-3658078836). Springer.
• Nestle.in (2020). Home. [online] Nestlé. Available at: https://www.nestle.in/ [Accessed 23
Jan. 2020].
• Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill
Education.
• Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy:
Concepts and readings. McGraw-Hill Education.