ANSWER SCRIPT: NESTLE

North South University

SBE
Department of Marketing and IB

Semester: Spring 2019

Course Code: INB 372, Section: 07

SLA Case Study

Faculty: ALK

Date: 10.04.2019

Marks obtained:

(This space is for faculty’s usage. Do not write here.)

Group Name:

Name ID
Md. Mahtab Uddin 1721451630
Fariha Akan Atoshi 1721881630
Sadik Sharieare 1621729030
Tabassum Tahmin 1721637630
Marwa Binte Reaj 1631088030
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1. How is culture influencing Nestlé’s product development and marketing strategies

around the globe?
As a ‘Glocal’ company Nestlé thinks globally- act locally. To maintain various economics
scale they try to serve local product and find suitable niche . e.g. A Bavarian soup in
Taiwan
instead of Noodles, Halal food’s for Muslim. And as a global brand, they serve Kitkat,
Maggi
and fit it in individual market preference. e.g. different flavors Kitkat in Japan, different
types of soup designed instead of Maggi. Nestlé gains customers trust all over the world
by it. Nestlé marketing strategy influenced by culture. As a ‘Glocal’ company Nestlé know,
how to adapt local and global brands to find out suitable niche with different product
variation.
By selling basic food items and concentrate on marketing and managerial resources they
find out limited number of key niches. When people’s income levels rises, Nestlé
introduce
more upscale items. Local and global market both works perfectly as whether what
needs.
Lastly, Customization rather than standardization is key of emerging strategy of market.

2. Does it make sense for Nestlé to focus its growth efforts on emerging markets?
Why?
The growth level of Nestle is rising in developing nations.Thus it makes sense for Nestle to
focus
Its growth in emerging markets. The company through joint venture and acquisitions
developed
Its growth and expended the operations along with increase in market share in emerging
mark-
Ets.AS the rising markets are providing ample of opportunities for Nestle to expand their
busin-
ess in certain growing economies, thus it can provide them opportunity for sustained growth.
In General the company’s strategy has been to enter emerging markets early before
competition
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And build Substantial position by selling basic food items that appeal to the local population
base Formula, condensed milk, noodles and tofu. By narrowing its initial market focus to just
a
Handful of strategic brands, Nestle claims it can reduce risk and concentrate in making
Resources and managerial effort on a limited number of key niches. The goal is to build a
Commanding market position in each of these niches. As income levels rise, the company
pro-
Gressively moves out from these niches, introducing more upscale items.

3. Critically analyze Nestlé’s entry mode across the globe?

In the commutative world Nestle would be looking towards other new markets from the
growth perspective. Implement successfully implement the strategies for market
development, flexibility, ability to adapt any market condition and achieve short and long
term goals.
Nestle have entered in every place through their own effort and joint ventures. Maintaining
economies of scale and culture preferences Nestle is become global company but act local.
Company main strategy has enter developing market early before the competitor get into
it.
Nestle focus on simplify the risk and focused on marketing resources, mostly specific
niches.
Although, company is knows as several key brand around the world and some of them
know
as local brand in different countries market. Another company strategy is customization

rather than standardization in developing market. Respecting others culture, willingness

to learning attitude others and pragmatism Nestle to enter in global market. Local market

Are perfectly designed to fulfill demand of local consumers, and make this happened they

Use different criteria of product in different place with different strategy. Sometimes logos

And basic stuff may be slightly change varies on country to country. Lastly, Nestle are

optimized for higher level of production, achieve higher revenue, gain large share across
the worldwide.

4. How would you describe Nestlé’s strategic posture at the top level (corporate level;
is it pursuing a global strategy, a Multidomestic strategy, an international strategy,
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or a transnational strategy) and is the company’s strategy about business developed

in emerging markets?
Nestle pursuit a transnational strategy at the corporate level.

Transnational strategy involves elements of both global and multidomestic industry.

Nestle had to face the high pressure for cost reduction and local responsivesness .

Due to high competitive conditions, in order to maintain growth rate they focued on cost reductions.
As food has always been a local product they focused on localization.

Localization rather than globalization, customization rather than standarlization is the key
characteristic of the Nestle's idea.

Nestle focuses on national differences and customizes their products by responding to the needs of
local preference.

It acquires local firms when good opportunes arise.

Nestles strategy about business developed in the emerging markets as it has always been active in
developig economies.
Nestle has a strong basis within the developed market.

Nestlé’s marketing strategy also influenced by culture.

5. What ethical dilemmas are faced by the Nestlé’s management and why and how
should the deal with it?

NESTLE FACED WITH THE RISING OF CONSUMER BOYCOTT WHICH CAME TO BE A BROADLY ISSUE IN CASE OF BUSINESS
ETHICS
THIS BOYCOTT STARTED IN UNITED STATES IN JULY 7, 1977. WITHIN SHORT TIME IT SPREAD THROUGHOUT US AND
EXTENDED IN EUROPE.
THE MAIN REASON FOR THIS BOYCOTT WAS THE OVER AGGRESSIVE MARKETING FOR “ BREASTMILK SUBSTITUTES “
SPECIALLY IN LESS ECONOMICALLY DEVELOPED COUNTRIES , LARGELY AMONG THE POOR.
. ANOTHER REASON WAS SIGNIFICANT NUMBER OF CHILDREN WORK IN THE COCOA PRODUCTION SECTOR IN NESTLE
AND ANOTHER MAIN REASON IS NESTLE IS BUYING PALM OIL FROM SINAR MAS, THE INDONESIAN COMPANY ACCUSED OF
ILLEGAL DEFORESTATION AND PEATLAND CLEARANCE
. THEY NEED TO TAKE SOME STRONG STEPS TO DEAL WITH THIS . THEY HAVE TO STAR FROM THE START . FIRSTLY THEY
HAVE TO STOP THE AGGRESSIVE MARKETING FOR THE “ BREASTMILK SUBSTITUTES “ IN LESS DEVELOPED COUNTRIES
THEY HAVE STOP USING CHILD LABOUR IN THEIR COCOA PRODUCTION SECTOR NOT ONLY THAT THEY HAVE TO ISSUE A
PUBLIC APOLOGIES
THEY HAVE TO CANCEL THEIR CONTRACT WITH COMPANIES LIKE SINAR MAS AND KEEP IN MIND TO GATHER MORE
INFORMATION ABOUT SUPPLIERS BEFORE GOING IN TO CONTRACT WITH THEM .
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