Globalization and Nestle Business Success: A Research Project

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Research Project
Title: How Globalisation can drive Business Success of Nestle
Student’s ID:
University Name:
Author’s Note:

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Abstract
The research project is developed on the impact of globalisation for Nestle that can drive success
factor. From the key objectives of Nestle, being the market leader in case of food processing, it
has encouraged certain areas where development can be done. Likewise, some of the key areas
of the company could be developed, so that it can attain measure of sustainability as well. The
research is ideally concentrated to analyse, how the critical success factors will develop the event
of globalisation, across many nations including UK. Besides, with several author opinions and a
contrast of theory is idealized to analyse how Nestle is working well in the market. Further, with
the help of research methods, there is a good implication of the chosen philosophy, approach and
the design. In that case, the use of survey strategy is analysed where around 55 respondents are
being chosen to identify the responses on the concerned topic. This is ideally done with close-
ended questions, with the help of quantitative analysis. Moreover, the findings part is defined
with good contrast of numerical analysis, with tables, and graphs. Lastly, recommendations and
own reflection is made to highlight the research with good characteristic.

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Acknowledgement
I would also like to thank the supervisor for their encouragement and support that has helped me
for achieving the research goal and study objectives. Therefore, I would like to appreciate and
thank everyone associated with this research for making it a success.
Thanking you

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Table of Contents
A. Research Proposal.......................................................................................................................5
Chapter 1: Introduction (LO1).........................................................................................................5
1.1 Rationale................................................................................................................................5
1.2. Significance of the research..................................................................................................5
1.3. Aim.......................................................................................................................................6
1.4. Objectives.............................................................................................................................6
1.5. Research Questions...............................................................................................................6
Chapter 2: Literature Review (LO1)................................................................................................6
2.1. Introduction...........................................................................................................................6
2.2. Factors responsible for attaining business success for globalisation for Nestle...................6
2.3. Major challenges that have affected Nestle because of rapid globalisation.........................8
2.4. Nestle could find sustainability in their global business environment.................................9
2.5. Implication of Human Capital theory.................................................................................10
2.6. Conclusion..........................................................................................................................11
Chapter 3: Methodology (LO1).....................................................................................................11
3.1. Research methods and techniques......................................................................................11
3.2. Research Instruments..........................................................................................................12
3.3. Sampling.............................................................................................................................13
3.4. Ethical Issues......................................................................................................................13
3.5. Data Analysis......................................................................................................................13
B. Research Project........................................................................................................................15
Chapter 4: Findings and Discussions (LO2 & LO3).....................................................................15
4.1. Introduction.........................................................................................................................15
4.2. Quantitative analysis...........................................................................................................16

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4.3. Findings..............................................................................................................................25
4.4. Discussions.........................................................................................................................27
4.5. Research limitations and merits..........................................................................................28
Chapter 5: (LO3 & LO4)...............................................................................................................28
5.1. Linking with Objectives.....................................................................................................28
5.2. Conclusions from the survey..............................................................................................29
5.3. Recommendations for Improvement..................................................................................29
5.4. Critical Reflection of taking this research..........................................................................30
5.5. Appropriate methodology suitable for further research......................................................30
5.6. Future research....................................................................................................................31
References......................................................................................................................................32
Appendix: Survey questions..........................................................................................................35

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A. Research Proposal
Chapter 1: Introduction (LO1)
1.1 Rationale
Globalisation has been a leading concept that has become a key factor in business in the last few
decades. The phenomena affects largely on business and society in diverse ways, where most of
the companies have affected due to these changes. Thus, the changes are related to increasing
competition, or the rapid changes of technology because of information transfer (Gottwald,
2012). Now, the topic is been selected because globalisation drives huge success factor for any
business, which has widespread business across the world. Nestle has been a transnational food
and drink company that is headquartered in Switzerland, and has wide presence globally and in
UK. Nestle being a market leader in food processing has around 308,000 employees, as of 2018
and the revenue is CHF91.439 billion (Nestle.com, 2019). Eventually, the company has also
acquired a fast growing market for the healthcare products, and many other food items, including
chocolates. Nonetheless, Nestle has been facing the issue of loss of cultural identity in the last 2-
3 years. As globalisation has defined foreign cultures easy to access, it also began to meld the
cultures too. However, the success of these cultures has cause nations for emulating the lifestyle,
on losing to global diversity.
1.2. Significance of the research
The significance of the topic, assets that, Nestle being a foreign company has wide presence in
the food processing industry. Global competition could encourage innovation and creativity may
help companies to stay one-step ahead with competitors. It could certainly drive towards price
and quality for improvement of major products. Most importantly, the lowered cost will help the
people in developed and developing nations, which live better on less money (Cruz, 2013).
Unlike, the cost reductions from the inexpensive manufacturing of Nestle have also lowered cost
for living too. While Nestle’s globalisation has major effect on environmental that have caused
abuse of the resources and pollution (Ezedike, 2013). For instance, Nestle failed in obeying
regulations in China, and it discharged large wastes in lakes and rivers. Further, Nestle has

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positively affected economy in certain nations, which have offered training and job opportunities
for people. Nestle also brought employment to people living in varied nations, as it encouraged
child labour in emerging nations.
1.3. Aim
The research aim is to identify how globalisation can drive business success for Nestle.
1.4. Objectives
The major objectives that are proposed for the research are as follows:
 To identify the factors responsible for business success of globalisation for Nestle
 To investigate the major challenges that Nestle have faced due to rapid globalisation
 To examine how Nestle can find sustainability in their business in the global environment
1.5. Research Questions
1. What role society, culture and politics have played a major part for driving business
success of Nestle?
2. How globalisation has been remained effective for Nestle to attain success factor?
3. How Nestle can improve their sustainability measure in major parts of UK?
Chapter 2: Literature Review (LO1)
2.1. Introduction
The literature will critically analyse the major opinions and arguments of many authors, which
would be reflected to attain success factor in globalisation. It shows that literature on the topic
will be associated by key factors, which will attain business success for globalisation for Nestle.
This will be further analysed with association of theoretical implication, and the measure that the
company can attain sustainability in global business environment.
2.2. Factors responsible for attaining business success for globalisation for Nestle
Nestle being the recognized brands globally, it has found success increasingly in food industry.
As opined by Sirkeci (2014), production, marketing, brand strategy and product planning

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contributes key to effective localization for Nestle. Since international demand for product
offering remains rife, just 2% of the total global sales are being generated in Switzerland. This is
where marketing campaigns have made a large focus on what client needs, when it is opposed to
creating global trends. Manning (2013) have cited that Nestle also has made an international
presence, which resonates with the key customers across the globe. Their logo has intended to
define a visual link between the company’s name and infant cereal products for representing
company’s commitment to health, wellness and nutrition. Finally, Nestle also attributes a huge
deal for its success to acquisitions and mergers. By this, it can create a strong market position,
with ease of cultural integration and a wide global scope.
However, other factors could have affected Nestle in many ways. The rise of sustained technical
change has decreased cost of communicating information with the knowledge products using the
web technology. Besides, many economists have believed that an increase in MES (minimum
efficient scale) is related to major industries. If MES is arising, the domestic market could be
regarded to satisfy advertising needs of the industries. Okur-Berberoglu (2014) have pointed that
the desire for the business for benefitting from the low unit labour costs and favourable
production factors have also encouraged many nations for adjusting tax systems to attract FDI. In
pursuit of the profit and revenue growth, global business brands like Nestle have invested more
in expanding, and this has proved potential for success (Singh et al. 2014). It has fuelled rising
number of middle-class customers with the ongoing economies.
With the increasing trend of globalisation, Nestle has found its key success factor with culture of
renovation and innovation, and the role of continuous improvement. According to Galalae and
George (2017), the firm has focused hugely on the operational viability, just to develop product
availability in tandem. It is intended that Nestle has remained effective for their market
expansion. The stage remained effective with availability of Nescafe, which have enhanced the
expansion of vending machine network (Lebaron and Lister, 2015). In quest, the new areas of
opportunities for confectionary and chocolates were being developed in areas like the railway
platforms and college canteens. During the last few years, Nestle has also focused heavily to
develop the supply chain in decreasing waste and provide key customers with fresh stocks.
Relatively, Vibhuti and Pandey (2014) have identified that there has been effective control for
the distribution cost when used by the innovative measures. In the Indian market, Nestle has

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received developmental facilities, which could be expertise with innovation by benchmarking
customer tastes in many products. Further, Nestle is in process to implement GLOBE project
worldwide, which will reflect on the company to maintain competitive advantage. Moreover, the
company has a positive outlook on Indian economy, since income of major people is rising and
the lifestyle is changing too.
2.3. Major challenges that have affected Nestle because of rapid globalisation
There could be other areas, where Nestle have a major impact on culture and society. As Nestle
has known to be for diverse ways, its change in coffee culture, instant noodles with high portion
of leads, and infant formula scandals were known to be quite common. According to Verbeke et
al. (2016), the company is also accused in harming health for infants, mainly in third-world
nations. The baby milk scandal has also resulted in boycotting against Nestle by late 70s.
Besides, Nestle did claim that breastfeeding could be the best, as they will hire sales girl who
have dressed for appealing to mothers, and provided them samples to be hooked with the “infant
formula”. Likewise, many poor and the undernourished women were unable to breast feed, and
were pre-occupied with basis of survival to find time (Bernstein and Brass, 2016). In that case,
Nestle proved a great help. With such instances, the company has begun to develop educational
materials for parents and healthcare professionals on the advantages of breastfeeding and
seminars. However, Nestle do not donate the powder milk formula, but are ready to go for drinks
and foods.
From the opinion of Wilhelm (2016), Nestle has a major effect on culture with the spread of
spurring Coffee. It has already been promoting Coffee in China, while the per capita income is
just 4 cups/person a year in contrast to Hong Kong’s 150 and Japan 400. While they have opened
Nescafe Coffee Centre for offering effective training, not only to farmers but also to
agronomists. According to Sundar (2017), the company has sent many experts to Vietnam for
helping the Coffee farmers for improving quality of Coffee beans. In that case, the rising number
of Coffee drinkers in the developing nations has increased. Although, Yunnan Coffee has been
expensive for utilization within China, but have enough quality being considered as a specialty
Coffee.

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While the rapid globalisation also brought negative and positive effect in terms of politics. One
such positive instance could be that Nestle entered into a partnership with Vietnam for training
farmers for developing sustainability. One negative instance could be that Nestle made a large
deal with Grace Mugabe (wife of infamous dictator in Zimbabwe) in purchasing 1 million liters
of milk a year. While this lead to international boycott, as Grace build her empire from the illegal
confiscated firms (Winschewski, 2017). However, Nestle did go forward with the deal, as the
inflation was reaching useless levels and agricultural-based economy was collapsing.
Nestle also faced a massive impact from the globalisation with their environment. An instance
could be Nestle Waters was using the eco-friendly plastics bottles, which were made with at least
thirty less plastics than average half-liter bottles. As opined by Raimi et al. (2017), the company
also succeeded to decrease packaging weight because of large collaboration between packaging
agencies and the R&D center of Nestle. By 2008, non-renewable energy and greenhouse gas
emissions for the packaging process decreased by 19% in Nestle waters. Further, the company
also uses renewable energy for decreasing greenhouse gas emissions. As a matter of now, Nestle
in Mexico finds its 85% of electricity from the wind power. In quest, Nestle also failed on the
effect on their good environment like abuse of resources and pollution (Nissanke, 2017). For
example, as per Greenpeace, Nestle failed in obeying regulations in China, and discharged large
wastes in lakes and rivers. Nestle also found illegal pumped millions of gallons of water from
San Bernardino National Forest in California that was against Federal law.
2.4. Nestle could find sustainability in their global business environment
For being a leading Nutrition firm, Nestle strives for enhancing quality for the customers on
healthy foodstuff and beverages. They understand that their business success would be evolved
in caring to preserve environment for the future generations. According to Okur-Berberoglu
(2014), they have reduced environmental effect of packaging to ensure, if packaging protects
products efficiently. Nestle also has been decreasing weight of packaging, by 1991 with
reduction of 500 million kg to 2019 (Nestle.com, 2019). Besides, Nestle has been promoting
recycling, recovery and utilizing recycled materials where there is a possibility. They have been
inherently considering a major impact of packaging on environment, by looking at the carbon
footprint, non-renewable energy use, water use and solid waste generation. Further, Ezedike
(2013) have opined that their product labeling has been a key area, which works based on

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environmental sustainability. Eventually, they have committed to offer a science-based area,
which could be verified regarding activities and products. As Nestle being a key member of ISO
Water Footprint Group, they have misled with the customers for neglecting a product impact on
the non-renewable energy resources and CO2 emissions (Sirkeci, 2014). Besides, they did belief
that on-pack labeling might not be a good option to communicate the complex issues with
environmental impact (Nestlé Waters, 2019). Thus, Nestle has remained committed for using
communication methods for engaging customers on the environmental issues. An instance could
be Nestle launching world’s first mobile application for Android and iPhone, which has helped
people to recycle the waste packaging in a correct manner.
More importantly, Nestle is also in the run to make 100% of their packaging re-usable by 2025.
The vision is that packaging will end up in a litter or a landfill. As discussed by Manning (2013),
the firm also focuses on areas, which includes encouraging utilization of plastics allowing
effective recycle rates, eliminating the non-recyclable plastics, and changing complexion of the
key packaging materials. Besides, the requirement of a circular economy has remained
committed for playing a key role towards recycling schemes and well-functioning collection, on
where they operate (Singh et al. 2014). In case, working as value chain partners in the industry
will explore diverse solutions in packaging. This is where Nestle is integrating on labeling plastic
product packaging with their recycling data to help the customers, dispose in an effective way.
Thus, it needs to identify a certain market for recycled plastics, just by continuing for increasing
amount of the recycled plastics.
2.5. Implication of Human Capital theory
For analysing this theory, it can be evaluated that the theory remains credible across disciplines,
on a subject matter. Vibhuti and Pandey (2014) have identified that measuring the economic
human capital and ROI will play a major consequence. This is quite effective to regain business
success for any company that is developing its channels credibly. A major area that Nestle can
find from the theory is that it can promote its products, across several schools, so that the value
of education can be increased globally. The theory also has been remained effective in terms of
the measurement utility and planning utility. Galalae and George (2017) have reflected that this
theory allows major individuals for making effective decision, which remains evident to analyse
the cost of future benefits. On the other hand, the theory also makes introduction to the

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investment risk, including the opportunity cost or payback periods. Further, the theory is even
applied to the company’s employees when they would be intending to look towards investment
in social capital or time allocation (Lebaron and Lister, 2015). Moreover, it can be asserted that
measuring intrinsic value from the theory will propose an opportunity cost, and other economic
returns as well.
2.6. Conclusion
It can be concluded from the literature that Nestle has attained good success factor with the rise
of globalisation. It has made profits across many countries, and the development factors works as
a knowledge transfer in the business environment. The company also has acquired intrinsic value
with application of theory, and the key success factors and challenges, such that it can remain as
the global leader in food processing.
Chapter 3: Methodology (LO1)
3.1. Research methods and techniques
From Research Onion, it could be interpreted that research could be developed by considering
key elements like Philosophy, Approach, Method and Design.