The Economic Globalization

The monetary globalization in terms of international trade, international direct investment (FDI) and outsourcing has gained more significance these days as a consequence to advertise liberalization and scientific improvement. In this essay, we expose on the possible effect of financial globalization on Nestle. The emphasis is on whether Nestl's internationalization strategy easily fit into to the observation that people are moving into a globalize world where differences and ranges across countries no more matter.


The company that we decided for our project is Nestle which is one of the world's biggest global food and nutrition corporations; it includes more than five hundred factories in more than eighty countries, and vends its products in more than hundred and ninety countries. Nestle is one of the oldest multinational firm which was started in 1866 in Switzerland by Heinrich Nestle. The Nestle firm from its very first days, seemed to different countries for development opportunities and Nestle started its global business by setting up its foremost foreign office buildings in London in 1868. The Nestle received merged in 1905 with Anglo Swiss Milk Corporation to increase the company's products and by the past due 1990's the Nestle Company possessed more than 500 factories in various countries almost functioning its business in each country of the world.

There are certain commercial business key points that Nestle follow in all the countries in which it runs its business activities, considering local legislations, social and religious tactics of every country. These concepts are

1. Nestl's basic intend is to improve the grade of consumers' each day lives by offering tastier, healthier and hygienic food and beverage choices that encourages a healthy lifestyle.

2. Second Nestle gives quality assurance and product safe practices all over on the planet as well as the company name Nestle quite simply symbolizes a warranty to the consumer that the product is safe and most of standards.

3. Nestle also make sure that they are committed to accountable and trustworthy consumer communication that gives power to consumers to use their rights and present any sort of opinions about their products.

4. Nestle also feels that they are highly focused on do their business procedures so that are environmentally ecological like by any means phases of the merchandise life cycle they make sure that they use natural resources efficiently.

5. Last but not minimal Nestle is highly committed to the sustainable use of water and tries to boost constantly in drinking water management as depends upon facing a mounting obstacles of drinking water and because of this Nestle convey information to all people to use water as a whole necessity.

The term globalization usually refers to the opening of international borders to operate, information and technology and the overseas immediate investment (FDI). Globalization has brought on amazing changes to the business enterprise practices across the world. Nestle outsource professionals from various areas of the globe, causing job shifts and changes in company structures. Nestle thinks that broadening business internationally books to voluntary exchange of capital and employees as well as goods and services, which provides overall universal growth. Alternatively the detractors of globalization claim that more might be done to help out people in poor countries attain the living requirements of those in richer countries.

Nestle employs a decentralization and everything the tasks of operating decisions is pressed right down to local products, which typically enjoy a high magnitude of independence in regards to to decisions relating to pricing, distribution, marketing, human source etc. Nestle can be called as a regional organization because the company divides the world into five major geographical zones Europe, THE UNITED STATES and Asia that are accountable to develop local strategies, as Nestle manages in more than eighty countries this is a smart decision of dividing a world into geographical zones so every area would easily take care of that each country follows developed local strategies and keep maintaining same quality criteria across the world.

There are certain ramifications of foreign immediate investment (FDI) on the house country of the business. Within the number countries multinational organizations like Nestle more often than not pay higher salaries than the locally possessed firms the key reason behind this is their occurrence usually increase the pay level in the sponsor countries. These multinationals usually have higher output than local firms. The major role of FDI is to aid the growth of web host country exports and organizations to beyond your world and also the conversion of sponsor economies from being exporters of food to relative high technology manufacturers. Nestl's impact of FDI is the fantastic knowledge of world market segments and of various ways of appropriate into international production networks.


A multinational company like Nestle can attain technology infrastructure assets, along with superior business aptitude and good control over worldwide operations with an individual global illustration of its activity source of information planning system, however the essential combination of databases and program servers can be technically and managerially difficult.

Nestle uses online technology to manage worldwide transportation. The Nestle Research Centre is the target of global research area, internally, with best experts from across the world and outwardly, in collaborations with key international research colleges. The basic role of Nestle Research Middle is essential in helping the company to fulfill its eyesight of GOOD FOOD ONCE AND FOR ALL LIFE. The complete network of Research and Development and the Nestle Research Middle carry out timely research on diet, health and wellness issues, and for that reason using research studies to produce new product ideas keeping in mind consumer health and wellness needs.

The research ideas from Nestle Research Center are changed into product applications and procedures through Nestl's international network of Product Technology Centers and Research and Development. The Product and Technology Center exist for each specific product category which includes Dairy, Beverages, Delicious chocolate and Caffeine, Biscuits, Ice cream, Pet good care and food services. THE MERCHANDISE Technology Centers also offers arrange for product creativity and packaging.

The global network of Product Technology Centers and Research and Development works carefully with Nestle Research Middle as well as with nestle Strategic Business Units to provide scientific support for the entire nestle product range and the outcome is the Nestle products are tasty, healthy, easily available.

Nestle feels that the Nestle Research center is a basis of Nestl's international success in guaranteeing safe and high quality products. Using the advance technology and scientific knowledge Nestle carefully assess their recycleables and finished products and ensure that they provide safe and healthy product to all consumers atlanta divorce attorneys area of the world and also thinks that it is their responsibility to protect consumers and keep maintaining their trust in Nestl's products and brand.

It is very important to any company to up grade its technology time to time to keep a competitive within on the market. Nestle just in five years from nineteen ninety four to nineteen ninety nine put in approximately 500 and seventy five million us dollars to seven hundred and fifty million dollars each year on its information system. These costs were mounting when the company was facing a loss.

Geography and Distance

As a multinational company Nestle runs in more than eighty countries with an increase of than 2 hundred and sixty five thousand employees. Although Nestle is a Swiss company but produces only two percent or even less than two percent with their sales in Switzerland which really is a home country of Nestle.

Nestle always believes in decentralization and also thinks that it is beneficial for any business to think internationally and respond locally. The people of Nestle assume that regardless of globalization the food business remains an area business which is based on local cultures, tastes and patterns. This thinking of Nestle helped a great deal to make a Nestle so renowned and successful all around the globe. Therefore we'll get another type of taste of Nestle products in each of the countries where Nestle sell its products.

Nestle may be acknowledged for its chocolates, coffee, clear water, dairy and infant formulation, but it is far more multifaceted and large than that, it's the world's biggest food company with almost seventy billion dollars in gross annual sales. Nestle manages five hundred factories in a few two hundred nations including those places as well that aren't part of the United Nations yet.

Nestle earn much more sales by reselling small items like Kit Kat delicious chocolate which is the most significant selling chocolate pub internationally. As we've just described above that each country has its own tastes and habits so for Nestle there is nothing simple as it manages in more than eighty countries. The caffeine Nescafe which really is a global brand and even more than hundred billion cups of it consumed each year in different countries and first product Nescafe the Nestle Company has 2 hundred formulations, to go with local tastes. In all the Nestle firm produces almost hundred and twenty seven thousand different types and ranges of products.

Brabeck, a ceo (CEO) of Nestle since nineteen ninety seven, wanted to maintain some self-discipline in terms of the way the company is functioning the businesses throughout the world that sustain marketing of its great selection of brands, products and factories. For Nestle operating business maintain same quality expectations in a wide variety of countries with substantial selection of products is very difficult and to keep control of its thousand of source chains with respect to each country and each product variety, along your predicting demand for different products in different countries and the uncountable different of ways of charging customers and collecting payments is more challenging.

Home and Foreign Authorities Policies

Administration control is a significant concern for multinational organizations that operate in international market segments (Geringer and Hebert, 1989; Groot and Product owner, 2000). Readily available indication claim that multinational businesses like Nestle transfers their managerial techniques from their country of origins which is also known as home country to the united states of operations that can be called a host country (Child et al, 2000). Companies operating in several country like Nestle proceed through pressures to include their international business. Nestle incorporate their business internationally through methods of standardization that could attain either on the basis of home tactics or any best global routines.

The level to that your host country affects multinationals like Nestle depends on two factors the first one is the institutional distance between your home country and the web host country. The more the institutional difference among the list of host and the home country the easier it is to identify the coordinator country effect. Subsequently the power of national institutional regulation is important. Nestle or any other multinational businesses are under more pressure to meet up with the conditions in more highly regulated business systems than in weaker institutional system environments.

There are certain government incentives as well like financial, funding and other incentives that play an important role in getting multinational investment funds. These government incentive guidelines are usually joint with performance essentials, for instance upsurge in exports, technology growth, innovation improvement and environmental friendliness. If multinational firms' opportunities meet all these government necessities they would be able to get special treatment.


As Nestle is a concept founded company it thinks that by creating distributed value is how they do business, which says that in order to create long term value and keep maintaining a good relationship with consumers they have to create value for population. All of the strategies that Nestle follows from product development to the delivery of products with their consumers clarifies that people are residing in a globalize term in which distinctions across the countries no longer subject. If we speak about the products that Nestle offers like chocolates, coffee, biscuits, drinking water, and milk etc, everyone in the whole world consume all of these products. So if every person is eating same kind of products with just little distinctions in terms of flavor verifies that we are residing in a globalize world where the distances and differences no longer subject. Nestle is one the most successful company who caters more than 192 nations of the world and maintains the same quality benchmarks of its brands and products throughout the world.

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