\NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES,

(Deemed University), MUMBAI-56.

 

DITM

 

INTERNATIONAL BUSINESS ENVIRONMENT

 

Marks: 100] [Duration: Three Hours

 

• Attempt ANY THREE Questions
• All questions carry EQUAL marks
• Total Number of questions are FOUR

 

 

Q. 1 The study of international business is fine if you are going to work in a large MNC, but it has no relevance for individuals who are going to work in small firms, especially in India. Evaluate this statement.

 

Q. 2 You are the CEO of a company that has to choose between making a $100 million investment in Russia or Czech Republic. Both investments promise the same long-term return, so your choice is driven by risk considerations. Assess the various risks of doing business in each of these nations. Which investment would you favour and why?

 

Q.3. What are the barriers to international trade? How do they act as a barrier? Name and explain the tariff barriers.

 

Q. 4. Write short notes on (Any Two):

 

(a)    WTO agreements and their implications on Indias foreign trade

(b)   TRIPS and TRIMS

(c)    Depreciation of domestic currency and its impact on the countrys foreign trade

 

 

 

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NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES,

(Deemed University), MUMBAI-56.

 

ADITM

 

INTERNATIONAL BUSINESS ENVIRONMENT AND

INTERNATIONAL MARKETING

 

Marks: 100] [Duration: Three Hours

 

• Attempt TWO Questions from BOTH the sections.
• Section I consists of a case and has TWO Questions which carry FIFTY marks and section II has THRRE questions. You may attempt ANY TWO questions from them.
• All questions carry EQUAL marks
• Total Number of questions are SIX.

 

 

SECTION I: INTERNATIONAL BUSINESS ENVIRONMENT

 

 

CASE: GLOBAL MARKETING STRATEGY FOR THE MUSIC BUSINESS

 

On a spring day in 1997, the managing director of the Entertainment Group in BMG, Marcus Schmidt, gets on a plane in Frankfurt. The plane is bound for New York, where Marcus, among other things, is going to participate in the launch of Toni Braxtons new CD. Toni Braxton was one of BMGs best-selling artists in 1996, and Marcus is looking forward to meeting the megastar personally.

 

As Marcus is new in his job as managing director, he uses the plane trip over the Atlantic to study the global music industry more thoroughly. Marcus has noticed that BMG is very proud of being one of the top five record companies in the world. But BMG is only No.5 in this group, with a worldwide market share of 14 percent.

 

Fortunately, Marcus has brought his portable PC, which he turns on to read a report that one of his marketing associates has written. But first a little general information about BMG:

 

      It is the third largest media corporation in the world.

      The groups holding company is Bertelsmann AG, which is based in Gutersloh, Germany.

      The group employs 58,000 people in more than 570 companies and profit centres spread across 40 countries.

      Revenues in 1995/6 topped $ 15 billion and the net income was $595 million, an increase of 8 percent on 1994/5.

 

Bertelsmann is divided into four product lines:

 

      Books

      Entertainment

      Press

      Industry

 

It publishes and distributes books, magazines and newspapers. It runs record and film companies, TV and radio networks, and is active in all related businesses. The entertainment business (of which recorded music is an important part) amounts to one-third of its total revenues.

 

The global market for music on CDs, LPs and cassettes

 

According to the International Federation of the Phonographic Industry (IFPI), the retail value of global music in 1995, was nearly $40 billion. From 1991 to 1995 the global sales volume of CDs, LPs and cassettes rose from 2.8 billion to 3.8 billion units.

 

About 34 percent of all compact discs, tapes and records are sold in Europe. The European market share has risen from 28 to 34 percent in the past ten years, while the American share has fallen from 36 to 33 percent (Table 1). Behind Europes huge market share is an increase in sales of 12 percent in the last five years and 40 percent in the last ten years. At the same time, the sale of music stagnated in the large American market in 1995, after a long period with strong growth.

 

About 80 percent of the worlds retail sales come from pop/rock/dance/soul/reggae/country/folk while classic/jazz accounts for the remaining 20 percent.

 

The largest market in Europe is Germany ($3 billion) followed by the UK ($2.5 billion).

 

TABLE 1: WORLD RETAIL MUSIC SALES BY REGION, 1995

 

REGION MARKET SHARE (%)

 

Europe 34

North America 33

Japan 19

Far East(excluding Japan) 5

Latin America 5

Pacific 2

Middle East 1

Africa 1

 

Source: IFPI

 

The global music industry

 

The IFPI estimates that 60 percent of all the music that Europeans buy is recorded by European artists. This is the exact opposite of the film market, which is totally dominated by the USA.

 

Today, the global music industry is dominated by five majors, which control more than 80 percent of the market. They are Polygram (the Netherlands), BMG (Germany), Sony (Japan), Warner (USA) and EMI (UK). Table 2 gives a description of these companies. Right behind the big five comes a little No.6, the record company MCA, which the American Seagram bought in 1994, from the Japanese Matsushita concern. The rest of the industry is divided among 1,100 minor record companies.

 

All companies operate under several labels and are part of large multimedia conglomerates, which also deal with film, TV, books, magazines and other entertainment. The only exception is EMI, which at the moment is being separated from Thorn EMI, which is to be divided in two. EMI has expanded into the retail business with the international music chain HMV, but has until now refused to expand into other media activities.

 

Table 3 shows the market shares of the big five and the independents in a number of countries in 1995. The largest market growth (till year 2005) is expected to take place in Latin America, eastern Europe and Asia, which stand to grow by 13 percent a year compared to a global growth in the same period of 7.5 percent a year.

 

Growth of the local/regional music scene

 

The big five are also batting new regional independents, such as Taiwans Rock Records, Brazils Sigla and Japans Pony Canyon. Often run by street-wise local entrepreneurs, the independents can spot new talents more easily. In the past sixteen years, Rock Records has built itself into eastern Asias largest independent record company, with 50 Chinese-language artists, including the regions most popular stars. Sales were estimated at $85 million for 1995.

 

In Asia, tastes are changing even more rapidly. In the early 1990s, as political winds shifted in markets such as Taiwan, newly liberated music fans went for western pop idols such as Whitney Houston. Later a Cantopop genre developed, mostly bubblegum music lip-synched by film and soap opera stars. Now, local music is becoming more sophisticated. Fans seem to want songs that rediscover a common heritage and are sung in their own language.

 

Take China, where 32-year-old singer Wei Wei soared to fame with ballads and love songs. She cut four albums that sold 106 million copies, making her more popular than Madonna. But in 1994, when she began singing in English to broaden her appeal, her popularity plummeted at home.

 

In Malaysia, Americas gangsta rap is not popular, but Malaysian teenagers love their home-grown rap group, Kru. An EMI scout heard the three brothers who make up Kru singing a jazzy song for the local Selangor soccer team on the radio. He signed them to a contract in 1993, and in two years they have sold 300,000 albums. After a slow start, the big five music companies are catching on to the demand for local talent.

 

 

Threats to the global music industry

 

The exploding pirate copy market has put a damper on the expected growth in Asia and Eastern and Central Europe. It is estimated that between 5 and 10 per cent of the worlds total sales volume does not go through registered record companies.

 

China produces 40 percent of all pirate CDs sold in the world. After a long tug-of-war with the EU and USA, China has promised to take action against the illegal copying, and at the same time make it easier for foreign music companies to establish themselves in China. But according to the IFPI it is a very slow process and the organization has just filed a complaint to the EU on this matter. In Europe the music industry is becoming still more concerned about Bulgaria, which is known as a China on Europes doorstep. That country alone is responsible for a huge part of the illegal sales in Europe, with an export of 20 million pirate CDs a year. The exports go mainly to Eastern Europe and Russia, but the Bulgarian copies have also been found in the UK, Germany and the Netherlands.

 

Another threat towards the established record companies is on-line music delivery via the telephone line and the Internet directly to the world consumers home. According to the IFPI much of the conventional sale of music on CDs and cassettes will soon be replaced.

 

Large retail concerns estimate that as much as 15 percent of the global sales in music shops will be replaced by on-line delivery in the next five years. In Europe, this is equivalent to a market of nearly $2 billion. The on-line market is a golden opportunity for music companies, but only if they are protected by copyright. The American music organization RIAA has also warned that competition from the Internet and computer games will increase, and the market for electronic entertainment is expected to overtake the music market in the USA within a few years.

 

BMGs basis for challenging the market leaders in the music market

 

BMG has traditionally been strong in markets that were geographically close to Germany, but in buying the American record company RCA in 1986, many possibilities were suddenly opened up in the USA. The new markets in Eastern Europe and the Far East have also been discussed, but top management of BMG has not yet decided which marketing strategy to use in these markets.

 

When the plane arrives at JFK airport in New York, Marcus Schmidt feels that BMG still needs to consider some very important strategic questions. When Marcus enters the arrival hall of the airport, he hurries to a fax machine to send some questions home to head office in Gutersloh in Germany.

 

As you have just been employed by Marcus Schmidt as marketing co-ordinator, you are presented with the following questions:

Questions

 

1.      Which geographic market areas should be chosen for closer analysis?

 

2.      Which marketing strategy and entry mode should be used in these markets?

 

Justify your decisions.

Table 2:The big five of the global recorded music industry (pop / rock category, 1994)

	Polygram	EMI / Virgin	Warner Music Group	BMG	Sony
Ownership	The holding company is 75% owned by Philips (Netherlands)	Owned by Thorn EMI Plc (England)	Owned by Time Warner Group (USA)	Owned by Bertelsmann AG (Germany)	Owned by Sony Corporation (Japan)
World-wide market share	19%	15%	18%	14%	17%
Sales/pre-tax net income	$47 billion / $685 million	$3.4 billion / $450 million	$4 billion / $366 million	$3.8 billion / n/a	$4.9 billion / n/a
Major international record lables	Polydor, Phonogram, Island, A&M Motown, Decca, Philips	EMI, Virgin records, Parlophone, Chrysalis Records	WEA, EastWest	RCA, Ariold, Arista	Columbia (CBS), Epic, S2
Top international artists	Bon Jovi, Stevie Wonder, Dire Straits, Elton John, U2, Ace of Base, Boys II Men	Frank Sinatra, Janet Jackson, Meat Loaf, Cliff Richard, Paul McCartney, Queen	Madonna, REM, Simply Red, Enya, Chris Rea, Hootie and the Blowfish	Toni Braxton, ZZ Top, Whitney Houston, Annie Lennox, Take That, David Bowie, Eros Ramazotti	Michael Jackson, Bruce Springsteen, Mariah Carey, Billy Joel, George Michael, Sade
Top regional artists	Jacky Cheung (Hong Kong), MC Solaar (France)	Yumi Matsutoya (Japan), Jon Secada (Cuba), Eric Moo (Taiwan), Mamonas Assassinas (Brazil)	Laura Pausini (Italy), Aaron Kwok (Hong Kong), Dadawa (China), Luis Miguel (Mexico)	Masahuru Fukuyama (Japan), So Pro Contrariar (Brazil), Diego Torres (Argentina), Peter Maffay (Germany)	TUBE (Japan), Harlem Yu (Taiwan), Patricia Kaas (France), Roberto Carlos (Brazil)
Strengths /weaknesses	No.1 worldwide. Early focus on building local repertoire in international markets now paying off, but top management is distracted by demands of new film unit.	Boosted world-wide market share from 10% after buying Virgin records in 1991 and Japanese affiliate in 1994, but is weak in the USA	Dominates the USA with 22% market share, but is playing catch-up in the global market, building local repertoire fast.	Publishing hard to develop local talent in central Europe. Weak in the USA	No.2 spot in USA dominates Latin America, but in other markets is overly dependent on American talent.

 

 

 

 

 

 

Table 3:

International market shares of the Big Five and the Independents, 1995 (%)

 

	UK	USA	Germany	France	Denmark	Netherlands	Japan
Polygram	23.3	11.5	22.0	32.0	24.1	24.1	12.3
EMI/Virgin	19.2	10.7	20.7	19.0	30.1	12.4	13.6
Warner	11.7	22.5	17.6	10.0	11.4	12.6	8.0
Sony	10.5	17.5	11.7	15.0	13.3	15.5	25.9
BMG	8.1	11.0	17.6	11.0	11.8	17.7	5.0
Big Five	72.8	73.2	89.6	87.0	90.7	82.3	64.8
Independents	27.2	26.8	10.4	13.0	9.3	17.7	35.2
Total	100	100	100	100	100	100	100

 

 

 

SECTION II

 

Q. 3. W hat is marketing? Discuss FIVE product promotion strategies available to an international marketer.

 

Q. 4. You wish to introduce a new tooth-paste in Dubai. Discuss the various steps in target marketing the same in Dubai.

 

Q. 5. (a) What is a bill of lading?

(b) Explain with suitable diagramme the letter of credit mechanism.

 

 

 

 

 

 

 

 

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NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES,

(Deemed University), MUMBAI-56.

 

PGDBM-II / PGDMM II

 

INTERNATIONAL MARKETING

 

Marks: 100] [Duration: Three Hours

 

• Attempt All THE Questions. Questions are listed at the end of the case.
• All questions carry EQUAL marks
• Total Number of questions are FOUR

 

 

 

NESTL: GLOBAL STRATEGY

 

Introduction

 

Nestl is one of the oldest of all multinational businesses. The company was founded in Switzerland in 1866, by Heinrich Nestl, who established Nestl to distribute "milk food," a type of infrant food he had invented that was made from powdered milk, baked food and sugar. From its very early days, the company looked to other countries for growth opportunities, establishing its first foreign offices in London, in 1868. In 1905, the company merged with the Anglo-Swiss Condensed Milk, thereby broadening the company's product line to include both condensed milk and infant formulas. Forced by Switzerland's small size to look outside its borders for growth opportunities, Nestl established condensed milk and infant food processing plants in the United States and Britain in the late 19^th century and in Australia, South America, Africa and Asia, in the first three decades of the 20^th century.

 

In 1929, Nestl moved into the chocolate business when it acquired a Swiss choclate maker. This was following 1938, by the development of Nestl's most revolutionary product, Nescafe, the world's first soluble drink. After World War II, Nestl continued to expand into other areas of the food business, primarily through a series of acquisitions that included Maggi (1947), Cross & Blackwell (1960), Findus (1962), Libby's (1970), Stouffer's (1973), Carnation (1985), Rowntree (1988), and Perrier (1992).

 

By the late 1990s, Nestl had 500 factories in 76 countries and sold its products in a staggering 193 nations - almost every country in the world. In 1998, the company generated sales of close to SWF 72 billion ($51 billion), only 1 percent of which occurred in its home country. Similarly, only 3 percent of its 210,000 employees were located in Switzerland. Nestl was the world's biggest maker of infant formula, powdered milk, chocolates, instant coffee, soups and mineral waters. It was number two in ice-cream, breakfast cereals and pet food. Roughly 38 percent of its food sales were made in Europe, 32 percent in the Americas, and 20 percent in Africa and Asia.

 

A Growth Strategy for the 21^st Century

 

Despite its undisputed success, Nestl realized by the early 1990s, that it faced significant challenges in maintaining its growth rate. The large Western European and North American markets were mature. In several countries, population growth had stagnated and in some, there had been a small decline in food consumption. The retail environment in many Western nations had become increasingly challenging and the balance of power was shifting away from the large-scale manufacturers of branded foods and beverages, and toward nationwide supermarket and discount chains. Increasingly, retailers found themselves in the unfamiliar position of playing off against each other - manufacturers of branded foods, thus bargaining down prices. Particularly in Europe, this trend was enhanced by the successful introduction of private-label brands by several of Europe's leading supermarket chains. The results included increased price competition in several key segments of the food and beverage market, such as cereals, coffee and soft drinks.

 

At Nestl, one response has been to look toward emerging markets in Eastern Europe, Asia and Latin America for growth possibilities. The logic is simple and obvious - a combination of economic and population growth, when coupled with the widespread adoption of market-oriented economic policies by the governments of many developing nations, makes for attractive business opportunities. Many of these countries are still relatively poor, but their economies are growing rapidly. For example, if current economic growth forecasts occur, by 2010, there will be 700 million people in China and India that have income levels approaching those of Spain in the mid-1990s. As income levels rise, it is increasingly likely that consumers in these nations will start to substitute branded food products for basic foodstuffs, creating a large market opportunity for companies such as Nestl.

 

In general, the companys strategy had been to enter emerging markets early - before competitors - and build a substantial position by selling basic food items that appeal to the local population base, such as infant formula, condensed milk, noodles and tofu. By narrowing its initial market focus to just a handful of strategic brands, Nestl claims it can simplify life, reduce risk, and concentrate its marketing resources and managerial effort on a limited number of key niches. The goal is to build a commanding market position in each of these niches. By pursuing such a strategy, Nestl has taken as much as 85 percent of the market for instant coffee in Mexico, 66 percent of the market for powdered milk in the Philippines, and 70 percent of the markets for soups in Chile. As income levels rise, the company progressively moves out from these niches, introducing more upscale items, such as mineral water, chocolate, cookies, and prepared foodstuffs.

 

Although the company is known worldwide for several key brands, such as Nescafe, it uses local brands in many markets. The company owns 8,500 brands, but only 750 of them are registered in more than one country, and only 80 are registered in more than 10 countries. While the company will use the same "global brands" in multiple developed markets, in the developing world it focuses on trying to optimize ingredients and processing technology to local conditions and then using a brand name that resonates locally. Customization rather than globalization is the key to the company's strategy in emerging markets.

 

Executing the Strategy

 

Successful execution of the strategy for developing markets requires a degree of flexibility, an ability to adapt in often unforeseen ways to local conditions, and a long-term perspective that puts building a sustainable business before short-term profitability. In Nigeria, for example, a crumbling road system, aging trucks, and the danger of violence forced the company to re-think its traditional distribution methods. Instead of operating a central warehouse, as is its preference in most nations, the country. For safety reasons, trucks carrying Nestl goods are allowed to travel only during the day and frequently under-armed guard. Marketing also poses challenges in Nigeria. With little opportunity for typical Western-style advertising on television of billboards, the company hired local singers to go to towns and villages offering a mix of entertainment and product demonstrations.

China provides another interesting example of local adaptation and long-term focus. After 13 years of talks, Nestl was formally invited into China in 1987, by the Government of Heilongjiang province. Nestl opened a plant to produce powdered milk and infant formula there in 1990, but quickly realized that the local rail and road infrastructure was inadequate and inhibited the collection of milk and delivery of finished products. Rather than make do with the local infrastructure, Nestl embarked on an ambitious plan to establish its own distribution network, known as milk roads, between 27 villages in the region and factory collection points, called chilling centers. Farmers brought their milk - often on bicycles or carts - to the centers where it was weighed and analyzed. Unlike the government, Nestl paid the farmers promptly. Suddenly the farmers had an incentive to produce milk and many bought a second cow, increasing the cow population in the district by 3,000 to 9,000 in 18 months. Area managers then organized a delivery system that used dedicated vans to deliver the milk to Nestl's factory.

 

Although at first glance this might seem to be a very costly solution, Nestl calculated that the long-term benefits would be substantial. Nestl's strategy is similar to that undertaken by many European and American companies during the first waves of industrialization in those countries. Companies often had to invest in infrastructure that we now take for granted to get production off the ground. Once the infrastructure was in place, in China, Nestl's production took off. In 1990, 316 tons of powdered milk and infant formula were produced. By 1994, output exceeded 10,000 tons and the company decided to triple capacity. Based on this experience, Nestl decided to build another two powdered milk factories in China and was aiming to generate sales of $700 million by 2000.

 

Nestl is pursuing a similar long-term bet in the Middle East, an area in which most multinational food companies have little presence. Collectively, the Middle East accounts for only about 2 percent of Nestl's worldwide sales and the individual markets are very small. However, Nestl's long-term strategy is based on the assumption that regional conflicts will subside and intra-regional trade will expand as trade barriers between countries in the region come down. Once that happens, Nestl's factories in the Middle East should be able to sell throughout the region, thereby realizing scale economies. In anticipation of this development, Nestl has established a network of factories in five countries, in the hope that each will, someday, supply the entire region with different products. The company, currently makes ice-cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria. For the present, Nestl can survive in these markets by using local materials and focusing on local demand. The Syrian factory, for example, relies on products that use tomatoes, a major local agricultural product. Syria also produces wheat, which is the main ingredient in instant noodles. Even if trade barriers don't come down soon, Nestl has indicated it will remain committed to the region. By using local inputs and focussing on local consumer needs, it has earned a good rate of return in the region, even though the individual markets are small.

 

Despite its successes in places such as China and parts of the Middle East, not all of Nestl's moves have worked out so well. Like several other Western companies, Nestl has had its problems in Japan, where a failure to adapt its coffee brand to local conditions meant the loss of a significant market opportunity to another Western company, Coca Cola. For years, Nestl's instant coffee brand was the dominant coffee product in Japan. In the 1960s, cold canned coffee (which can be purchased from soda vending machines) started to gain a following in Japan. Nestl dismissed the product as just a coffee-flavoured drink rather than the real thing and declined to enter the market. Nestl's local partner at the time, Kirin Beer, was so incensed at Nestl's refusal to enter the canned coffee market that it broke off its relationship with the company. In contrast, Coca Cola entered the market with Georgia, a product developed specifically for this segment of the Japanese market. By leveraging its existing distribution channel, Coca Cola captured a 40 percent share of the $4 billion a year, market for canned coffee in Japan. Nestl, which failed to enter the market until the 1980s, has only a 4 percent share.

 

While Nestl has built businesses from the ground up, in many emerging markets, such as Nigeria and China, in others it will purchase local companies if suitable candidates can be found. The company pursued such a strategy in Poland, which it entered in 1994, by purchasing Goplana, the country's second largest chocolate manufacturer. With the collapse of communism and the opening of the Polish market, income levels in Poland have started to rise and so has chocolate consumption. Once a scarce item, the market grew by 8 percent a year, throughout the 1990s. To take advantage of this opportunity, Nestl has pursued a strategy of evolution, rather than revolution. It has kept the top management of the company staffed with locals - as it does in most of its operations around the world - and carefully adjusted Goplana's product line to better match local opportunities. At the same time, it has pumped money into Goplana's marketing, which has enabled the unit to gain share from several other chocolate makers in the country. Still, competition in the market is intense. Eight companies, including several foreign-owned enterprises, such as the market leader, Wedel, which is owned by PepsiCo, are vying for market share, and this has depressed prices and profit margins, despite the healthy volume growth.

 

Management Structure

 

Nestl is a decentralized organization. Responsibility for operating decisions is pushed down to local units, which typically enjoy a high degree of autonomy with regard to decisions involving pricing, distribution, marketing, human resources, and so on. At the same time, the company is organized into seven worldwide strategic business units (SBUs) that have responsibility for high-level strategic decisions and business development. For example, a strategic business unit focuses on coffee and beverages. Another one focuses on confectionery and ice cream. These SBUs engage in overall strategy development, including acquisitions and market entry strategy. In recent years, two-thirds of Nestl's growth has come from acquisitions, so this is a critical function. Running in parallel to this structure is a regional organization that divides the world into five major geographical zones, such as Europe, North America and Asia. The regional organizations assist in the overall strategy development process and are responsible for developing regional strategies (an example would be Nestl's strategy in the Middle East, which was discussed earlier). Neither the SBU nor regional managers, however, get involved in local operating or strategic decisions on anything other than an exceptional basis.

Although Nestl makes intensive use of local managers to knit its diverse worldwide operations together, the company relies on its "expatriate army." This consists of about 700 managers who spend the bulk of their careers on foreign assignments, moving from one country to the next. Selected primarily on the basis of their ability, drive and willingness to live a quasi-nomadic lifestyle, these individuals often work in half-a-dozen natiosn during their careers. Nestl also uses management development programs as a strategic tool for creating an esprit de corps among managers. At Rive-Reine, the company's international training center in Switzerland, the company brings together, managers from around the world, at different stages in their careers, for specially targetted development programs of two to three weeks' duration. The objective of these programs is to give the managers a better understanding of Nestl's culture and strategy, and to give them access to the company's top management.

 

The research and development operation has a special place within Nestl, which is not surprising for a company that was established to commercialize innovative foodstuffs. The R&D function comprises 18 different groups that operate in 11 countries throughout the world. Nestl spends approximately 1 percent of its annual sales revenue on R&D and has 3,100 employees dedicated to the function. Around 70 percent of the R&D budget is spent on development initiatives. These initiatives focus on developing products and processes that fulfill market needs, as identified by the SBUs, in concert with regional and local managers. For example, Nestl instant noodle products were originally developed by the R&D group in response to the perceived needs of local operating companies through the Asian region. The company also has longer-term development projects that focus on developing new technological platforms, such as non-animal protein sources or agricultural biotechnology products.

 

 

Discussion Questions

 

1.      Does it make sense for Nestl to focus its growth efforts on emerging markets? Why?

 

2.      What is the company's strategy with regard to business development in emerging markets? Does this strategy make sense?

 

3.      From an organizational perspective, what is required for this strategy to work effectively?

 

 

4.      Does this overall strategic posture make sense, given the markets and countries that Nestl participates in? Why?

 

 

 

Sources

 

1.      Hall, W. "Strength of Brands Is Key to Success." Financial Times, November 30, 1998, p. 2.

 

2.      "How to Conquer China (and the World) with Instant Noodles." The Economist, June 17, 1995.

 

3.      Lorenz, C. "Sugar Daddy." Financial Times, April 20,1 994, p. 19.

 

4.      Michaels, D. "Chocolate Giants Worldwide Find Themselves Sweet on Polish Market." The Wall Street Journal, December 12,1 997.

 

5.      Nestl. "Key Facts and History." At http://www.nestle.com.

 

6.      Rapoport, C. "Nestl's Brand Building Machine." Fortune, September 19, 1994, p. 147.

 

7.      Steinmetz, G., and T. Parker-Rope. "All Over the Map." The Wall Street Journal, September 26, 1996, p. R4.

 

8.      Sullivan, M. "Nestl Is Looking to Coffee Market in Russia for Sales." The Wall Street Journal, August 7, 1998, p. B7A.

 

 

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