MEMBERS:

Dinangwatan, Jeremy T.

Gamutlog, Zyra C.

Laigo, Rashenee Jehan G.

Miñoza, Freya Pamela O.

Sacla, Kzy D.

Quilitorio, Kristyn Joi

TABLE OF CONTENTS
TITLE PAGE

I. OVERVIEW

a. DESCRIPTION
b. FOUNDING DATE AND KEY PEOPLE

II. EVOLUTION AND DIVERSIFICATION JOURNEY

a. MILESTONE
b. DIVERSIFICATION ANALYSIS
1. TYPES OF DIVERSIFICATION
2. RATIONALE

III. MISSION, VISION AND VALUES

IV. ORGANIZATIONAL PORTFOLIO

a. CORE BUSINESS
b. DIVERSIFIED SEGMENTS
c. REVENUE BREAKDOWN

V. DIVERSIFICATION OUTCOME

a. TRIUMPHS
b. MISSTEPS

I. OVERVIEW
a. DESCRIPTION
 Nestlé has been one of the world's largest food and beverage companies that
has 447 factories in 194 countries, employing 3,39,000 people. Its primary
 objective is to have and execute a "good food, good life” motto, providing
excellent quality goods that make people happy and healthier all around the
globe. The company started its business by producing baby foods, and
Condensed Milk. As the time passed, the firm expanded its products by
manufacturing additional foods such as chocolates, cereal grains, coffee and
other beverages, frozen food, mineral water, healthcare nutritions, seasonings,
soups and sauces, having over 2000 products that are sold in over 187
countries throughout the world.
 Since Food processing is one of the most prominent and active industries in
the world, Nestle continues its operation to serve a large variety of consumers.
Throughout the years, Nestle has made a solid marketing strategy to deliver
various goods. Its success is all about the identification of the Market
segmentation and positioning strategy in the market so that they can provide a
variety of goods for its target clients, or consumers. From manufacturing and
operating branches in over 194 countries, Market segmentation has a huge part
to distinguish the company’s consumers based on their age, profession,
seasons, weather, gender and other factors. In addition, the company was also
able to operate and develop a successful positioning strategy, surpassing its
competitors all over the world.

b. FOUNDING DATE AND KEY PEOPLE

FOUNDING DATE AND FOUNDER OF NESTLE:

 Nestlé was established in 1866 in Switzerland by Henri Nestlé, a pharmacist.

The history of Nestle begins with the foundation of the Anglo-Swiss
Condensed Milk Company founded by Charles Page and George Page, the
Page Brothers, in which they offered an evaporated milk product. On the other
hand, Henri Nestle is also a businessman who developed milk-based baby
food. The founders of the two different businesses decided to merge their
company to form the Nestle Group. As of today, the Nestle Company
continues to operate its business, providing their consumers a good and high
quality product that they can offer around the world.

EXECUTIVE BOARD MEMBERS OF NESTLE:

BOARD MEMBERS POSITION

Mark Schneider Chief Executive Officer

Laurent Freixe Executive Vice President

Chief Executive Officer of Zone Latin America

Marco Settembri Executive Vice President

Chief Executive Officer of Zone Europe

Francois-Xavier Roger Executive Vice President

 Chief FInancial Officer

Stefan Palzer Executive Vice President

Chief Technology Officer

Beatrice Guillaume Executive Vice President Global Head Human Resource &
Grabisch Management Service

Leanne Geale Executive Vice President

Group General Counsel

Bernard Meunier Executive Vice President

Head of Strategic Business Unit and Marketing and Sales

Steven Wood Presley Executive Vice President

Chief Executive Officer of Zone North America

Remy Ejel Executive Vice President

Chief Executive Officer of Zone Asia, Oceania and Africa

David Xiqiang Zhang Executive Vice President

Chief Executive Officer of Zone Greater China

Stepanie Pullings Hart Executive Vice President

Head of Operations

Greg Behar Deputy Executive Vice President

Chief Executive Officer of Nestle Health Science

Sanjay Bahadur Deputy Executive Vice President

Head of Group Strategy and Business Development

David Rennie Deputy Executive Vice President

Head of Nestle Coffee Brands

Lisa Gibby Deputy Executive Vice President

Chief Communications Officer

II. EVOLUTION & DIVERSIFICATION JOURNEY

a. MILESTONES
 The Pioneer Years (1866-1904) – In the year 1866, the Nestle Company
history begins. When the US brothers Charles and George Page established the
Anglo-Swiss Condensed Milk Company using the abundant supplies of fresh
milk in Switzerland, Henri Nestle was also developing baby food products. By
1905By 1905, Henri Nestle established Nestle Group with the foundation of
the Anglo-Swiss Condensed Milk Company. The two founders’ merges
together to form a new business named Nestle Company.

 The Belle Epoque (1905-1913) – As the time went by, the company that was
merged was growing and developing. By the year of 1905, Nestle & Anglo-
Swiss had more than 20 factories, and was selling in Africa, Asia, Latin
 America and Australia. In addition, as World War One occurred, the company
sees an opportunity to offer their products. Nestle Group enjoys the period of
prosperity and called it the Belle Epoque or ‘Beautiful Age’.

 Adapting during Wartime (1914-1918) – When the outbreak of war in 1914

continues, this creates new challenges and opportunities for the company of
Nestle. The demand for condensed milk and chocolate increased which
benefited the company. However due to the high demand of product, the
company experiences a shortage of raw materials and cross-border trade that
slows down production. To solve these problems, the company acquired
processing facilities in the US and Australia which by the end of the war,
Nestlé & Anglo-Swiss had 40 factories.

 Crisis and Opportunity (1919-1938) - After years of opportunity during the

war, military demand for milk declined, causing a major crisis for Nestlé &
Anglo-Swiss in 1921. Fortunately, the company recovers, however Nestle was
rocked by the Wall Street Crash, which reduces consumer purchasing power.
Nonetheless, despite the challenges and downs of the company, Nestle still
delivers many positives. The company's management corps is
professionalized, where researchers found a way in which they pioneered
products, launching the Nescafé coffee.

 Riding out the storm (1939-1947) – In the time when the outbreak of World
War Two in 1939 affects virtually every market, Nestlé & Anglo-Swiss
continues to operate in difficult circumstances. They continue in supplying
both civilians and armed forces. In 1947, the company added Maggi soups and
seasonings to its product range and adopted the name Nestlé Alimentana.

 Creating convenience for consumers (1948-1959) – As the war ended, the

post-war period is marked by growing prosperity. People in the US and
Europe start spending money on machines that make life easier, like
refrigerators and freezers. Convenience foods have also become popular.
From this, Nestle sees again an opportunity to create a new product that would
make its consumers purchase within their company. Nestlé Alimentana
launched their new additional products including Nesquik and Maggi ready
meals.

 Frozen foods to pharmaceuticals (1960-1980) – In this era, acquisitions

enable Nestlé to enter new areas like frozen foods, while expanding its
traditional businesses. In the 1970s the company diversified into
pharmaceuticals and cosmetics. Growing criticism from activist groups allege
Nestlé's marketing of infant food is unethical. Nestlé later became one the first
companies to apply the WHO code on breast-milk substitutes.

 Towards health, nutrition and wellness (1981-1999) - After years of

growth, Nestlé starts promoting brands that meet the demands of more health-
conscious consumers, in line with its new 'Nutrition, Health and Wellness'
strategy. The company expands in Eastern Europe and Asia, and targets for
global leadership in water, ice cream and animal food.
  Creating shared value (2000-2016) – From the 20 century, Nestlé
th

articulates its Creating Shared Value approach to business. Followed by the

launch of the Nestlé Cocoa Plan and Nescafé Plan to further develop
sustainable supply chains. While the business continues strengthening its
position in traditional segments like infant formula and frozen foods, it also
starts focusing on medical nutrition.
 Creating a better tomorrow, today (2017-present) – As the company
creates a better tomorrow, alongside traditional market segments, Nestlé
continues to find new growth opportunities in healthcare. It acquires
businesses including Zenpep, Vital Proteins and Aimmune, plus a majority
stake in Orgain, a leader in plant-based nutrition. The company also steps up
its sustainability aims, committing to recyclable packaging and net zero
emissions.

b. DIVERSIFICATION ANALYSIS
 Diversification is used by businesses for risk reduction strategies to help them
increase their profitability and help them to expand their product in new
markets or industries. It is important because through this, it allows companies
to remain competent, innovative, competitive and relevant in consumer
markets. Like Nestle, diversification is one of the keys to be successful in the
business world.

1. TYPES OF DIVERSIFICATION

a. Concentric Diversification - Concentric Diversification is used as a growth

strategy in seeking to have improvement and development inside the company
by adding new products to its existing product lines to attract new consumers.
And in years, Nestlé has diversified. As the company who first produced only
baby food and condensed milk, Nestle entered into related businesses, such as
pet food, baby food, and skincare. These businesses are complementary to
Nestlé's core food and beverage business.

b. Vertical Diversification - Nestle is a company that sells everything from

baby food and bottled water to cereal and healthcare nutrition products.
Nestle’s vertical diversification entails seeking growth and business
development by introducing new products within existing product lines. In this
approach, it benefited the firm in several ways, including increased market
power, reduced transaction costs, improved quality control, and enhanced
innovation potential.

c. Horizontal Diversification - Throughout the years, Nestle has been one of

the largest and most well-known food-processing enterprises in the world.
And to achieve this, the company smartly introduces horizontal product
diversification to create and develop new products that are complementary to
the business and appealing to its current consumers. Horizontal diversification
occurs when Nestle decides to introduce and launch new product development
and unrelated existing products. From Nestle offering beverages like mineral
water to coffee to other beverages like milkshakes. The company also offers
other food products like cereal, and other food products that became popular
in the market. Nestle became known as a source of a wide range of food
production
 d. Geographic Diversification - Nestlé has diversified into new geographic
markets all over the world. As a business, it is important to have Geographic
Diversification because this practice helps the business to spread its currency
and investment. Through this, the company was able to achieve its goals to be
successful. As of now, Nestle has operated and supplied goods and services in
over 180 countries.

1. RATIONALE
 The strategic reasoning behind Nestlé's diversification moves has varied depending on
the specific business area or market that the company was entering. However, some of
the key reasons include:
 Growth: Nestlé has diversified into new businesses and markets in order to
achieve growth. For example, the company's acquisition of Purina Mills in
1974 gave it access to the growing pet food market.
 Risk spreading: Nestlé has diversified into unrelated businesses in order to
reduce its risk exposure. For example, the company's acquisition of Galderma
in 2014 gave it access to the growing skincare market, which is less cyclical
than the food and beverage industry.
 Leveraging core competencies: Nestlé has diversified into related businesses
in order to leverage its core competencies in food science and manufacturing.
For example, the company's acquisition of Gerber Products Company in 2007
gave it access to expertise in baby food.

III. MISSION, VISION AND VALUES

MISSION

"Nestle is the world's leading nutrition, health, and wellness company. Our mission is to
provide consumers with the best tasting, most nutritious choices in a wide range of food and
beverage categories, and to promote a healthy lifestyle."

VISION

To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved

shareholder value by being a preferred corporate citizen, preferred employer, preferred
supplier selling preferred products.

VALUES

Nestlé is a multinational food and drink company that values several core principles in its
operations. These core values shape the company's behavior and guide its decision-making
processes.
1. Quality: Nestlé is committed to providing high-quality products that exceed consumer
expectations. They strive for excellence in every aspect of their products, ensuring that their
offerings are safe, nutritious, and of superior taste and quality.
2. Nutrition, Health, and Wellness: Nestlé is dedicated to enhancing the overall health
and well-being of individuals and families. They aim to promote a balanced diet, along with
active and healthy lifestyles, by providing nutritional information, ingredient transparency, and
innovative product solutions.
 3. Responsible and Sustainable Practices: Nestlé places a strong emphasis on acting
responsibly towards society and the environment. This involves adopting sustainable practices
throughout their value chain, including responsible sourcing of raw materials, reducing waste,
conserving water, and minimizing their carbon footprint.
4. Professionalism and Integrity: Nestlé values professionalism, integrity, and honesty
in all of their interactions. They uphold a strong ethical code of conduct, ensuring transparency,
fair practices, and compliance with applicable laws and regulations.

IV. ORGANIZATIONAL PORTFOLIO

a. CORE BUSINESS
 Nestle’s core is to apply their expertise in nutrition, health and wellness to
help people, families and pets live happier, healthier lives. Nestle works to
protect and restore the environment and generate significant value for our
shareholders and other stakeholders alike. They express this aim through their
corporate proposition Good Food, Good Life.

b. DIVERSIFIED SEGMENTS
 Products and brands

Six worldwide corporate brands, Nestlé, Nescafé, Nestea, Maggi,

Buitoni and Friskies contribute about 70% of the group's total sales, with the
Nestlé brand itself contributing 40%. These brands are the first choice of
consumers around the world, whether as stand alone brands or in combination
with product brands such as KitKat and LC1. Nestlé also owns regional and
national brands with which consumers have a close and often longstanding
familiarity. These brands enable consumers to express their individuality and
to respect their traditions whilst still enjoying the quality of a Nestlé product
and, as such, are key elements of the Nestlé portfolio. Nestlé’s brands and
products are the focus of continual innovation and renovation so that they will
be relevant and appealing to today’s and tomorrow’s consumers.

 Beverages
1. Soluble coffee- Nescafé
2. Ready-to-drink varieties- Nespresso
3. Chocolate/malt beverage- Nesquik, Milo and Nescau
4. Fruit juices- Nestea and Libby’s
5. Mineral and spring water - Vittel, Contrex, Perrier, S.Pellegrino,
Levissima, Vera, Panna, Fürst Bismarck and Naleczowianka in Europe
and Arrowhead, Poland Spring, Zephyrhills, Deer Park and Ozarka in
the United States.

 Milk products, nutrition and ice cream

 Nido, Nespray, La Lechera and Carnation and chilled dairy and ice
cream under the Nestlé brand.

 Prepared dishes, cooking aids and pet care

1. Diversified range of noodles, soups, stocks, sauces and culinary
preparations known as Maggi
 2. Frozen prepared dishes- marketed mainly under two brands, Stouffer’s
in the United States and Maggi in other regions of the world
3. Pet care business- under the Friskies brand
4. Cold sauces and condiments- under various brands such as Thomy,
Crosse & Blackwell and Winiary.
 Chocolate, confectionery and biscuits
 includes international brands such as Nestlé, KitKat, Smarties, Lion,
Crunch, After Eight and Polo as well as popular local brands such as
Cailler, Butterfinger, Rossiya, Orion, Caja Roja, Sao Luiz and Star.
 Food Services
 brands such as Davigel, Minor’s and Chef
 Pharmaceutical products
1. Alcon Laboratories (known as Alcon for generic label) is the global
leader in vision care. Its product lines cover therapeutic, surgical and
consumer products.
2. Nestlé and L’Oréal formed Galderma- a company offers
dermatologists a range of products for the treatment of skin complaints
 Associated companies
 The most important associated company is L’Oréal, the world leader in the
cosmetics market. Nestlé’s involvement with L’Oréal started in 1974. L’Oréal
markets over 500 brands and more than 2000 products in all sectors of the
beauty business: hair color, permanents, styling aids, body and skincare,
cleansers and fragrances. Its products are found in all distribution channels.
 Nestlé holds an interest of at least 20% in these companies but does not
exercise management control. They are included in the financial statements by
the equity method
c. REVENUE
BREAKDOWN

 Based on Nestlé’s press release last October 2023, in the category by product,
Purina PetCare was the largest contributor to organic growth, with strong
momentum across all channels. Purina ONE, Purina Pro Plan and Felix all
recorded double-digit growth. Coffee saw high single-digit growth, with
positive sales developments across brands and channels. Starbucks products
reported strong growth, supported by innovation and the launch of ready-to-
drink offerings in South-East Asia and Oceania. Infant Nutrition posted high
single-digit growth, with broad-based contributions across brands and
 geographies. Confectionery recorded double-digit growth, fueled by a strong
sales development for KitKat. Dairy reported high single-digit growth, led by
coffee creamers and affordable fortified milks. Prepared dishes and cooking
aids posted mid single-digit growth, with strong demand for Maggi. Nestlé
Health Science recorded low single-digit growth, as continued momentum for
Medical Nutrition was partly offset by a sales decline in vitamins, minerals
and supplements. Water posted low single-digit growth, impacted by
temporary capacity constraints for Perrier.

V. DIVERSIFICATION OUTCOME

a. TRIUMPHS -

Nestle creates value through a persistent focus on relevance, operational agility and
executional excellence. As a company, Nestle continuously evolves its offered
product to meet the consumers needs and wants. By doing this, they were striving for
a balanced pursuit of financial growth through innovation, operational efficiency and
resource allocation. Nestle's long-term strategy is to ensure that they will deliver a
consistent, sustainable success for their consumers and for the company itself.

To live with the company’s motto, “Good food, Good life”, the business enforces a
great value based on a balanced, well sustained, and prioritized value to invest for the
business to grow.

1.Growth through continuous innovation

 Nestle always takes the opportunity to grow and expand its production.
Through this, the company was able to create a long term value and
name for them to be known around the world. They were committed to
enhance their food systems and offer more product, food and
beverages to meet the consumers’ expectations.
2. Sustained Organic Sales
 Nestle maintains a diversified portfolio, both in terms of geography
and category. Their objective is to sustain a mid single-digit organic
growth rate through rapid innovation, market share gains and portfolio
management. Through this, they were able to sustain its sales and
continue to maintain the long term financial performance of the
company.
3. Operating the business in more efficiently
 As Nestle continues to evolve, the company fuels its growth agenda
through disciplined cost management, improving operational
efficiency at all levels of the business. This approach enables the
company to free up sources for reinvestment in product innovation,
brand building, digitalization and sustainability initiatives, while
creating value for its shareholders.
4. Prudent Allocation of capital
 Nestle priorities are to invest in the long term growth and development
of their business, while increasing shareholders return and creating
shared value. The company pursues a value creation model that
balances growth in earnings per share, competitive shareholder returns,
flexibility for external growth and access to financial markets. From
 this, the Nestle company will continue to invest to drive brand
building. Innovation, digitalization and sustainability.

b. MISSTEPS
 Nestlé has had its share of missteps in the past. One of the most significant missteps
was the acquisition of businesses that did not align with the company’s core
competencies. Nestlé has acknowledged that it made mistakes in some of its
acquisitions and has taken steps to address these issues .
 In 2017, Nestlé announced plans to diversify into new categories such as pet care,
cereals, skin health, and premium coffee business .While it is too early to tell if these
diversification strategies will be successful, Nestlé has a history of making strategic
acquisitions that have helped it grow and expand into new markets . However, Nestlé
has also learned from its past mistakes and has taken steps to ensure that its
acquisitions align with its core competencies and long-term strategy .
 Another misstep that Nestlé has faced is the failure of some of its products to meet
recognized definitions of health . An internal presentation reported by the Financial
Times found that 63% of Nestlé products don’t meet a “recognized definition of
health” (in this case, at least 3.5/5 stars on Australia’s health rating system) . Nestlé
has since rethought its strategy and is working to improve the nutritional value of its
products .
 Overall, Nestlé has learned from its past missteps and has taken steps to address these
issues. The company has a long-term strategy that focuses on innovation, operational
efficiency, and sustainability, along with its diversified portfolio and commitment to
social responsibility, which have been key factors contributing to its success.

REFERENCES:

Home. Nestlé Global. (n.d.). https://www.nestle.com/