Nestle Harvard Case Solution & Analysis

Nestle Case Solution


Profile & Heritage:

Nestle was founded by Henri Nestle in 1886, and today it is the world’s largest Food and Beverage Company.  The history of company began in Switzerland in 1867 when Henri Nestle (Pharmacist) launched his product Farine Lactee Nestle, nutrition gruel for children. Henri’s surname was “little nest” so he used his surname in both (Company and Logotype). Nest which is represented as security, family and nourishment (food), still plays avital role or we can say very important role in Nestlé’s profile. On the other hand, there was a bundant milk supply in Switzerland and that was easy access to enter into European market and that was the perfect location for operating milk factory. The first canned condensed milk was produced in US market ten years before and planned to sell milk in European market but the plan was failed. In 1866, he established Condensed (thick and strong) milk in Switzerland.

In 1867, the founder of Nestle (Henri Nestle) launched Farine Lactee (flour with milk) in Switzerland. It was made up of Cow’s milk, Wheat flour and Sugar. Nestle developed this product for those employees/students who were unable to take breakfast early in the morning, this product began with high mortality rate and this product was liked by many people at that time.

Between 1871 and 1873, daily production of milk was more than double from 1000 tons to 2000 or 2500 tins. One of the Nestle goals was to bring baby milk product in everyone’s reach and they tried a lot to do so, convinced mothers and doctors for the benefit of the product. In 1873 demand of Nestle product was very high and generated more profit and growth in the market.

In 1877 new competitors entered into the market Anglo-Swiss Condensed Milk Company, and that company was large manufacturer and high profitable/leading company in Europe. This company wanted to buy Nestle but he already told that “Nestle is not for sell”. Competition begins from here and Nestle purchase Anglo-Swiss Company’s first Factory which was operated in US (1881).

In 1875, Henri Nestle sold his company and factory in Switzerland to three businessmen and those businessmen employed many chemists and skilled workers to expand the business and generate growth and profits.

In 1878,due to new entrants, competition began in between Nestle and Anglo-Swiss and these both companies sold rivals’ products of original version to different markets, and both companies had different and better products. Due to this their sales increased and they expanded their business in International Markets.

In 1882-1902,due to high sales in 1878, Farine expanded his business in US, after death of George, his plan was flopped and unfortunately he sold his US based operations.

In 1904: Nestle wanted to sell more and unique products to different and international markets that’s why in 1904 Nestle began to sell Chocolates first time and their sales converted from domestic to international. Henri Nestle himself worked a lot and played a vital role in development of Milk Chocolates when he supplied milk to Daniel Peter, his neighbor. Peter developed first commercial for this product in 1880s.

In 1905, Nestle and Anglo-Swiss Company decided to merge and create Nestle and Anglo-Swiss Milk Company.

In 1938 Nestle introduced its new product which was Nescafe.

In 1985 Nestle acquired another companies/in corporations Carnation and Hills Brothers Inc.

In 2002 Nestle acquired Ralston-Purina for becoming leader in food industry.

Since Nestle was established over 130 years ago, it succeed with product innovation, development nestle turned into or developed into Food Company and which became Large Food Company in the world. Nestle turned into many different products (liquid as well as ill-liquid) and services like: chocolates, soups, yogurt, frozen products/meal, coffee, mineral water and different food products and services. In 1970s, Nestle expanded its business from milk to food and pharmaceutical products and cosmetics.....................

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