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Nestle Expands Globally

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The Switzerland-based Nestle Corporation, once a Swiss chocolate maker, now is the world’s biggest food company and the largest producer of coffee, powdered milk, and frozen dinners. The company also became number 1 in candy after passing Mars. And with the purchase of Perrier for $ 2.7 billion, Nestle became the world’s largest producer of mineral water with a 20 per cent share of the world market. Nestle achieved its success through intensive global expansion. Nestle does only 2 per cent of its business in Switzerland: the remaining 98 per cent is in other countries.

One of the first multinational corporation, Nestle now has production facilities in more than 60 countries. Its products can be found almost everywhere around the globe. In Europe, where Nestle’s success is greatest, sales of instant coffee, mineral water, yogurt, frozen foods, cold cuts, candy, and cereal bars total roughly $10.2 billion.

One secret to Nestle’s success is that many of its products – especially instant coffee, chocolates, and frozen foods – appeal to consumers all over the world. For example, coffee is closing in on tea as the favourite drink, in Japan. Frozen dinners, long a hit in the United States, are catching on in Europe. And of course chocolate tastes the same in any language. Although these products have to be adapted slightly to local tastes, they generally can be sold worldwide. Because of high research and development costs as well as high costs of marketing, Nestle benefits greatly by offering products with global appeal. After making large investments in its products, the company has been to move brands from one country to another with relative ease. ;

Now Nestle is looking to what Maucher thinks is the market of the future, the Third World. Currently, 20 per cent of the world’s population consumes 80 per cent of Nestle’s products. They would be satisfied if the company’s products were seen in more parts of the world. The company also will look to what Maucher considers the food of the future-pasta. As he puts it, “We can’t feed the world on beefsteak. So noodles will conquer the world”.

Most industry experts agree that Nestle is in the best position of any food company to expand internationally. Most of its competitors, which have been concentrating on their domestic markets, would be happy if they were involved in the profitable international trade.

1. Established in 1908, General Motors Corp. became the nation’s leading car maker by the early 1930s, winning the competition with Ford Motor Co. By that time, the plant has acquired its best known brands, such Cadillac and Chevrolet. The Buick line was the part of the company from its foundation. Over the decades, the Detroit-located company has enlarged a long list of technological innovation, including the V-8 engine, which was put into production in 1914, and the automatic transmission in 1948. But management mistakes and growing competition in the 1970s and 1980s caused financial crisis in the company. It led to a serious reorganization that returned GM to financial health by the end of 1995.

2. Standard Oil Co. Since 1899 New Jersey Standard Oil Co. was an umbrella for John Rockefeller’s numerous oil operations. The federal government closed the umbrella in 1911, breaking Standard Oil into 33 different companies. The one that kept the name Standard Oil of New Jersey was renamed in Exxon Corp. in 1972. Today Exxon is the nation’s biggest oil company, and also has interest in refining and marketing chemicals, in coal, mineral and power-generating business. The company is located in Irving, Texas.

3. Coca-Cola Co. Atlanta pharmacist John Pemberton brewed Coca-Cola in 1886, advertising it as a tonic for lots of illnesses. In 1891, pharmacist Asa Candler bought the company for $2,000and promoted the beverage as a soft drink. Coke’s huge business was launched in 1894 when it started selling the beverage in bottles. In 1919 the company was bought by Atlanta banker Ernest Woodruff for $25 million. His son, Robert W. Woodruff, was soon appointed president, beginning more than six decades of successful leadership that build the company into a market giant.

4. International Business Machine Corp (IBM). Big blue was incorporated in 1911 under the rather inelegant name Computer-Tabulating-Recording Co. It produces scales, adding machines and other business equipment. CTR became IBM in 1924. In the 1950s, IBM made an entry into electronic computers. It dominated that market till the early 1980s when its position was challenged by the rise of personal computers. Since then, under new management, IBM has laid off tens of thousands of workers, refocused its products and returned to profitability, though it hasn’t returned its former dominance.

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