Nestle Acquisition In China Case Study

Acquisitions in China- In April 2011, Nestle announced a partnership agreement with a Chinese food company, Yinlu. The main reason for the partnership was that Yinlu’s products are tailored according to the Chinese customers taste. So by combining Yinlu’s local taste expertise and Nestles’ innovative and research capabilities, they became a market leader in China. Nestle currently operates 33 factories in Greater China. Last year alone, the group more that doubled its sales. According to its 2012 annual report, Nestle 's Chinese revenues totals CHF5.1bn, excluding the contribution of the Wyeth infant nutrition business, which was acquired from Pfizer Nutrition in April of that year. That compared to sales of CHF2.5bn in 2011. After this, China

Our company has a long-term commitment to rural development and the use of local raw materials rather than imports. We intend to significantly expand our business in Africa by developing local food resources for our factories. Nestle has built a huge network in African continent. In 2011, this network includes 27 factories and dozens of other warehouse and office facilities serving all 54 African nations. The Company employs approximately 15,500 people in Africa, and around 50,000 additional jobs have been indirectly created through the supply and distribution chain. It has built this business by establishing national and regional companies through consistent investments over many decades, despite often challenging economic circumstances. Thus, in this way Nestle got benefits through mergers and acquisitions in the last decade and thus, expanded

Effect of emerging global culture on national culture: Multinational companies have an impact on national culture as their main focus is on global culture. On contrast, Nestle has always paid attention towards national culture over global culture. It has launched several products to meet the requirements of local market. So, it has not affected national culture for its business.

4. Palm-oil case: Nestle faced a lot of criticism because of being destructive to the nature. Nestle was using palm oil for the production of its widely known chocolate “Kit-Kat”. The palm oil to Nestle was provided by an Indonesian company “Sinar Mas” that destroyed millions of trees in Indonesia for palm-oil plantation. Thus, Nestle faced oppositions by masses for being destructive to the nature.

5. Growth in Revenues: By the end of 2013, the sales of Nestle reached 92158 million CHF giving a profit of 10.9% that makes Nestle the world’s largest food and Beverage Company by revenue. The company’s growth is not limited by any barrier of difference in culture, economies and geography. It is managing its operations globally as one huge integrated firm.