Case Nestle pp. 109-110 Read the Nestle case and answer the questions following the case. Place questions above your responses. Be thorough, cite and apply textbook. Minimum four (4) pages
Case Study Nestlé By 2000 Nestlé was considered the world’s biggest food company with 500 factories operating in 80 countries employing 224,000 people with annual sales of $47 billion. 149 A worldwide leader known for manufacturing products as diverse as chocolates and cosmetics, it is now a far cry from the company that was created by the underlying desire to help new mothers who could not breastfeed their newborn infants. 150 With a commitment to long-term out- comes that “will never be sacrificed for short-term performance,” 151 Nestlé has clearly been through many changes over the years. CHANGING NESTLÉ As a Swiss national organization, Nestlé only sold through sales agents to countries outside of its home market. By the 1900s, it changed its approach to global expansion and began purchasing local subsidiaries in foreign markets. 152 Its launch into the American market was initiated when the First World War increased demand for dairy products. Nestlé took this opportunity to establish its presence in the United States by acquiring several existing facto- ries. 153 During the Second World War, a feeling of isolation in Switzerland led to the transfer of many executive offices offshore to the United States. 154 These moves into offshore markets were part of Nestlé’s commitment to changing the company in order to increase efficiency and productivity. In 1974 Nestlé diversified for the first time out- side the food industry in order to promote growth. It became a major shareholder in the cosmetic giant L’Oréal. This diversification has had significant conse- quences for the organization that continue today with investor concern that Nestlé may have overextended itself with its acquisition of debt-ridden L’Oréal. 155 To offset the instability of the risk involved in investing in…