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Assessment Tittle WRITTEN ESSAY ON NESTLE

AS EXPERT IN
INTERNATIONAL EXPERT
Module Code M520B

Module Title M520B INTERNATIONAL

ECONOMICS
Module Tutor Prof. CLAUDIA WITTMANN

Date of Submission 22nd of DECEMBER 2023

Declaration of Authorship
I declare that all material in this assessment is my own work except where there is clear
acknowledgement and appropriate reference to the work of others. I fully understand that the
unacknowledged inclusion of another person’s writings or ideas or works in this work may be
considered plagiarism and that, should a formal investigation process confirm the allegation, I would
be subject to the penalties associated with plagiarism, as per GISMA Business School, University of
Applied Sciences’ regulations for academic misconduct.
Signed……………….......... Date ……………………
Contents
Overview of Nestlé's International Operations:.....................................................................................3
KEY FACTORS OF SUCCESS.....................................................................................................................3
 CULTURAL UNDERSTANDING AND LOCAL ADAPTATION.............................................................3
 Regulatory Compliance and Adaptability...................................................................................4
 GLOBAL TALENT MANAGEMENT................................................................................................4
 STRATEGIC ACQUISITIONS AND PARTNERSHIPS.........................................................................4
 Brand Portfolio and Innovation..................................................................................................4
 Supply Chain Efficiency..............................................................................................................4
 Corporate social responsibility...................................................................................................5
Factors Influencing Nestlé's Sourcing Decisions:...................................................................................5
 Cost Considerations...................................................................................................................5
 Proximity to markets..................................................................................................................5
 Quality and Availability of Raw Materials..................................................................................5
 Political and economic stability..................................................................................................5
 Regulatory environment............................................................................................................5
Potential Benefits of Nestlé's Global Supply Chain................................................................................5
 Economics of scale.....................................................................................................................5
 Risk diversification.....................................................................................................................6
 Responsiveness of market demand...........................................................................................6
 Access to specialized resources.................................................................................................6
 Global brand consistency...........................................................................................................6
Challenges Associated with Nestlé's Global Supply Chain.....................................................................6
 Geopolitical risk.........................................................................................................................6
 Supply Chain Disruptions...........................................................................................................7
 Environmental Sustainability Concerns......................................................................................7
 Currency fluctuations.................................................................................................................7
 Complexity of coordination........................................................................................................7
 Summarized...............................................................................................................................7
Challenges and Risks Faced by Nestlé in the Context of the Russia-Ukraine Conflict:...........................8
Global Geopolitics and Economic Impact..............................................................................................9
Recommendations for Nestlé to Gain Long-Term Competitive Advantage:.........................................10
Conclusion...........................................................................................................................................10
REFERENCING......................................................................................................................................11
Overview of Nestlé's International Operations:

Nestle with operations in 186 countries, the Swiss multinational food and
beverage corporation Nestlé has made a name for itself as a worldwide leader
since its founding in 1866. The company's skillful handling of a variety of
markets, which reflects a strategic commitment to comprehending and adjusting
to local cultures, is a key factor in its global success. Nestlé's broad product line,
which includes everything from food and drink to skin care and health research,
demonstrates its capacity to satisfy a broad range of customer tastes.
Multinational corporations (MNCs) exhibit exceptional proficiency in handling
the intricacies of many regulatory frameworks, showcasing a profound
comprehension of local statutes and compliance obligations. The deliberately
assembled and developed worldwide workforce of Nestlé is a reflection of the
company's focus on talent acquisition and development, which encourages
creativity and adaptability in the face of shifting market conditions.
Furthermore, strategic alliances and acquisitions have been essential to Nestlé's
global growth, enabling the corporation to enter new markets and include
important companies into its portfolio. Nestlé's endurance and success in the
global marketplace may be attributed to this all-encompassing strategy, which
has helped to establish the company as a major participant in the dynamic and
interrelated world of worldwide commerce.
With operations spanning across 186 countries, Nestlé, the food and beverage
corporation has gained global recognition since its establishment, in 1866. The
companys effective approach in markets driven by a commitment to understand
and adapt to local cultures plays a pivotal role in its worldwide success. Nestlés
extensive range of products encompassing food, beverages, skincare and
healthcare research demonstrates its ability to cater to customer preferences.
Multinational corporations (MNCs) showcase proficiency in navigating
regulatory frameworks by deeply understanding local laws and compliance
obligations. Nestlés built and nurtured workforce reflects the companys
emphasis on talent acquisition and development fostering creativity and
adaptability amidst evolving market dynamics. Additionally strategic
partnerships and acquisitions have played a role in Nestlés global expansion
journey by facilitating entry into markets and incorporating significant
businesses into its portfolio. This holistic approach can be credited for Nestlés
resilience and prosperity, in the world of global commerce where
interconnectedness prevails.

KEY FACTORS OF SUCCESS

 CULTURAL UNDERSTANDING AND LOCAL ADAPTATION

The secret to Nestlé's success is its ability to customize its goods to suit regional
tastes and inclinations. Nestlé engages in learning about other cultures and
customizes its products appropriately, as opposed to taking a one-size-fits-all
strategy. The company's ability to forge solid relationships with customers all
around the world thanks to this localization approach has increased brand
loyalty.

 Regulatory Compliance and Adaptability

The secret to Nestlé's success is its ability to customize its goods to suit regional
tastes and inclinations. Nestlé engages in learning about other cultures and
customizes its products appropriately, as opposed to taking a one-size-fits-all
strategy. The company's ability to forge solid relationships with customers all
around the world thanks to this localization approach has increased brand
loyalty.

 GLOBAL TALENT MANAGEMENT

Talent development and acquisition are top priorities for Nestlé. Nestlé makes
sure that its teams have the cultural intelligence and experience necessary to
successfully negotiate challenging foreign markets by constructing a diverse
and competent workforce. This strategy promotes creativity, flexibility, and
effective problem-solving on a worldwide level.

 STRATEGIC ACQUISITIONS AND PARTNERSHIPS

Strategic alliances and acquisitions have aided Nestlé's expansion. The business
has a track record of locating important players in various markets and
incorporating them into its holdings. Using this strategy, Nestlé may reach new
markets, increase the range of products it offers, and capitalize on the
advantages of acquired businesses.
 Brand Portfolio and Innovation
Nestlé offers a vast array of items under its many brands, ranging from drinks
and candies to beauty care and health sciences. The effects of market swings in
any one area are reduced by this diversification. Nestlé's dedication to
innovation, demonstrated by its numerous R&D facilities across the world,
guarantees that its products remain current and satisfy changing consumer
demands.

 Supply Chain Efficiency

A major factor in Nestlé's success on a worldwide scale is its supply network.

The business carefully selects production sites and raw materials, streamlining
its supply chain to reduce costs and increase efficiency. With this strategy,
Nestlé is able to maintain competitive prices while guaranteeing a steady supply
of goods to a wide range of markets.
 Corporate social responsibility

In order for Nestlé to conduct business internationally, its commitment to CSR

is essential. The organization is actively involved in community development,
sustainable development, and responsible sourcing programs. This dedication
not only fits with changing customer expectations but also aids Nestlé in forging
strong bonds with regional communities, boosting its standing internationally.

Factors Influencing Nestlé's Sourcing Decisions:

 Cost Considerations
When choosing where to source its products worldwide, Nestlé takes into account costs associated
with labor, production, and raw materials. To ensure cost efficiency, this entails looking for areas with
favorable production expenses and competitive wages.

 Proximity to markets
For Nestlé, being geographically close to important consumer markets is essential. A more agile
supply chain is ensured by placing production facilities closer to these markets, which also helps to
lower lead times, cut down on transportation costs, and react faster to changes in demand.
  Quality and Availability of Raw Materials
Nestlé gives preference to areas with a consistent and excellent source of raw materials. This is
especially crucial because of the wide variety of products it offers; all of them need consistent access
to components that satisfy exacting quality requirements.

 Political and economic stability

The political and economic climate's stability plays a major role in Nestlé's sourcing choices. To
reduce the danger of supply chain interruptions, the corporation prefers areas with strong economic
circumstances and stable political environments.

 Regulatory environment
Adherence to regional laws and ordinances is an essential factor. In order to guarantee compliance
with regulations and steer clear of legal issues that can impair business operations, Nestlé thoroughly
assesses the regulatory landscape in possible sourcing regions.

Potential Benefits of Nestlé's Global Supply Chain

 Economics of scale

Nestlé takes advantage of economies of scale by leveraging its global reach.

Cost efficiencies are made possible by shared resources, standardized
production procedures, and bulk purchasing, which enables the business to
provide competitive prices.
 Risk diversification

The impact of regional threats is lessened by the diverse global supply chain.
Due to its capacity to source from several areas, Nestlé's supply chain is
resilient and risk-mitigated, preventing disturbances in one area from destroying
the entire system.
 Responsiveness of market demand

With a worldwide supply chain, Nestlé can react swiftly to shifting consumer
preferences. The corporation can remain ahead of trends by strategically
positioning its manufacturing facilities to cater to distinct consumer tastes in
various locations and customize its product offerings accordingly.
 Access to specialized resources
Due to its global presence, Nestlé has access to specialized resources across
many geographical areas. This adds to the originality and distinctiveness of its
product offerings with specialization, cutting-edge technologies, and unusual
ingredients.
 Global brand consistency

The uniformity of Nestlé's product quality and brand image in various markets
is guaranteed by an international supply chain. This promotes consumer loyalty
and trust while helping to establish and preserve a powerful worldwide brand.

Challenges Associated with Nestlé's Global Supply Chain

 Geopolitical risk

International conflicts and geopolitical pressures provide challenges for Nestlé.

The company's activities in particular regions may be impacted by supply chain
disruptions caused by changes in trade regulations, political instability, or
sanctions.
 Supply Chain Disruptions

Global occurrences like pandemics, natural disasters, or delays in transit might

affect Nestlé's supply chain. Strong risk management techniques and emergency
preparation are necessary for controlling and minimizing these disruptions.
 Environmental Sustainability Concerns

Nestlé faces a difficulty in ensuring sustainability in a global supply chain. To

satisfy changing customer demands and legal requirements, the business must
handle issues with resource depletion, responsible sourcing, and environmental
effect.
 Currency fluctuations

Nestlé is subject to swings in foreign exchange rates due to its operations in

multiple areas. Currency exchange rate fluctuations can have an effect on a
company's profitability, revenues, and costs across several geographies.
  Complexity of coordination
Operations issues arise when coordinating and managing a complicated global
supply chain. Nestlé has to make sure that cooperation and communication are
seamless between many locations while navigating a variety of regulatory
frameworks, cultures, and languages.
 Summarized
Nestlé's global supply chain management and sourcing choices are impacted by
a number of variables, such as political stability, raw material quality, cost
concerns, and market accessibility. The company gains from access to specialist
resources, worldwide brand consistency, risk diversification, economies of
scale, and responsiveness to market demands. However, difficulties including
supply chain interruptions, currency fluctuations, environmental sustainability
issues, geopolitical risks, and coordination difficulties highlight the necessity of
a strategic and flexible approach to guarantee the success and resilience of
Nestlé's international operations.

Challenges and Risks Faced by Nestlé in the Context of the Russia-

Ukraine Conflict:
 Geopolitical uncertainties
Geopolitical concerns brought forth by the Russia-Ukraine war may have an
effect on Nestlé's international business. Trade policies may alter as a result of
sanctions, geopolitical unrest, and changes in diplomatic ties, which could
disrupt the supply chain and impact the flow of goods.
 Supply Chain Disruptions
The crisis in Europe, especially in Ukraine, could cause problems for Nestlé's
supply chain. This could hinder the company's capacity to meet demand across
the globe and include possible disruptions in the flow of raw materials,
production delays, and difficulties in transferring finished items.
 Currency Fluctuations and Economic Impact
Particularly in the European region, the fighting may exacerbate economic
instability and currency swings. Nestlé may encounter difficulties in mitigating
exchange rate risks due to its multi-currency operations, thereby affecting its
cost of goods, profit margins, and overall financial performance.
 Consumer Behavior Changes
Tensions in the geopolitical arena can affect how consumers feel and act. Nestlé
might see changes in customer preferences as people react to world events.
Maintaining market share requires marketing strategies to be adjusted to reflect
shifting customer sentiments.
 Regulatory Challenges
Trade policy and regulatory frameworks may alter as a result of the conflict. As
laws, tariffs, and trade restrictions change, Nestlé has to be aware of how they
can affect its business operations in Europe and other regions.
 Brand Image and Reputation
- Nestlé'sbrand image may be influenced by the geopolitical situation.
Consumer perceptions of a company's stance on international conflicts can
impact brand loyalty. Managing communication and ensuring a neutral or
socially responsible image becomes crucial during such geopolitical events.
 Risk of Political Unrest
The conflict may lead to political unrest in certain regions, potentially affecting
Nestlé's operations and the safety of its workforce. Political instability can
disrupt supply chains, create operational challenges, and necessitate adjustments
in business strategies.
 Energy and Transportation Costs
Energy price variations and higher transportation costs are frequently caused by
geopolitical tensions. Due to its reliance on international transportation
networks, Nestlé may see an increase in the cost of moving products over
international borders, which would have an effect on total operating expenses.

Global Geopolitics and Economic Impact

 Trade Policy Changes
Global trade policy can shift in response to geopolitical developments. Changes
in trade agreements, tariffs, and export/import laws could have an impact on
Nestlé as a global player and affect the price and accessibility of goods and
services.
 Macroeconomic Uncertainty
Wider macroeconomic worries are exacerbated by the conflict between Russia
and Ukraine. Economic slowdowns or downturns in impacted areas may have
an effect on consumer spending power and the demand for Nestlé products as a
whole.
 Investment Climate
Global investment conditions can be impacted by geopolitical tensions. Given
its involvement in a number of markets, Nestlé may have difficulties when
choosing investments, managing risks, and maintaining the stability of its
international business operations.
 Cross-Border Relationships
International geopolitics has the ability to sour diplomatic ties between nations,
which could have an effect on Nestlé's cross-border connections. The business
must handle intricate global dynamics to preserve goodwill with stakeholders
and governments.
 Social and Cultural Dynamics
Global social and cultural dynamics can be impacted by geopolitical events.
Because it operates in a variety of markets, Nestlé needs to be aware of changes
in society views and values and adapt its marketing plans and product
positioning accordingly.

Recommendations for Nestlé to Gain Long-Term Competitive

Advantage:
 Diversification of Supply Chain:
Nestlé ought to broaden its supply chain diversification even more in order to
reduce reliance on areas impacted by geopolitical unrest. Finding substitute
suppliers for important raw materials and manufacturing sites can increase
adaptability and lessen susceptibility to shocks.
 Technology Integration for Supply Chain Visibility
Supply chain visibility can be increased by making investments in cutting-edge
technology like blockchain, artificial intelligence, and data analytics. Nestlé will
be able to proactively identify and address any problems through real-time
monitoring and data-driven insights, which will improve operational efficiency.
 Stakeholder Engagement and Advocacy
It is essential to fortify linkages with communities, local government, and non-
governmental organizations (NGOs). Nestlé may enhance its reputation and
strengthen its defenses against social and political threats by actively promoting
peace and stability.
 Sustainable Practices and Responsibly Sourced Materials
In its supply chain, Nestlé should keep putting sustainability first. Brand
reputation will be improved by putting an emphasis on ethical raw material
procurement, minimizing environmental effect, and putting eco-friendly
procedures into practice. These strategies will also fit with changing customer
expectations and legal requirements.
 Market Diversification and Innovation
Investigate new markets actively if you want to lessen your reliance on
particular areas. In order to satisfy regional tastes and changing consumer
trends, prioritize ongoing innovation at the same time. This will help Nestlé stay
flexible and competitive in a variety of areas.

Conclusion

In conclusion, Nestlé can strengthen its long-term competitive advantage by

embracing a holistic approach that encompasses supply chain diversification,
technology integration, sustainable practices, market diversification, risk
management, talent development, effective communication, and collaboration
with industry peers. These recommendations aim to position Nestlé as a resilient
and adaptable multinational corporation in the ever-evolving global economic
and geopolitical landscape.

REFERENCING

NESTLE - Google Search (no date). https://www.google.com/search?

q=NESTLE&oq=NESTLE+&gs_lcrp=EgZjaHJvbWUyBggAEEUYOzIGCAEQRRg5MgYIAhAjGCcyDAgDEAAY
QxiABBiKBTINCAQQABiDARixAxiABDISCAUQLhhDGK8BGMcBGIAEGIoFMgwIBhAAGEMYgAQYigUyCgg
HEAAYsQMYgAQyDAgIEAAYQxiABBiKBTINCAkQABiDARixAxiABNIBCDM0NDVqMGo3qAIAsAIA&source
id=chrome&ie=UTF-8.

Home (no date). https://www.nestle.com/.

About us (no date). https://www.nestle.com/about.

Nestlé (no date) Nestlé | LinkedIn. https://www.linkedin.com/company/nestle-s-a-.

Update on Ukraine and Russia (no date).

https://www.nestle.com/ask-nestle/our-company/answers/update-ukraine-russia.

Harvey, S. (2023) 'Nestlé latest FMCG major to feature on Ukraine’s ‘sponsors of war’ list,' Just Food,
2 November. https://www.just-food.com/news/nestle-latest-fmcg-major-to-feature-on-ukraines-
sponsors-of-war-list/?cf-view.