Nestle Growth Strategy
Nestles Growth Strategy:-
As their main growth strategy Nestle used the acquisition method which is when the company takes the ownership of another company. Scholes(2008) This method might not always be as easy as it seems and could face direct failure, 70% of acquisition ends up with lower returns. As the biggest mistake organizations commits is paying too much for a company which might not have the resources or experience required.
Despite the chances of failure nestle has managed to succeed by doing its home work well, they knew who exactly to acquire and where. Between 1990 and 2000 they had acquired companies in around 30 countries. But in 2002 came the major acquisition which was with Dreyers, which is an American leading ice cream company. Nestle knew what were they doing they didn’t just acquire any company, but they chose companies which were leading in their markets such as in the case of Dreyers in North America and Movenpick in which is a German ice cream company nestle acquired it in 2003 and thought that it would be a good chance for improving its performance and growth and also it would help in its competitive position.(Nestle.com) Another successful decision was when they acquired Delta ice cream company which is a leading ice cream company in Greece and Bulgaria markets. By these acquisitions Nestle continues its growing process and becoming one of the leading companies in the ice cream market globally. (INVgr.com)
The reason Nestle thought of acquisition was due to a number of reasons such as :- * It wanted a quick entry to the ice cream market. Especially in the European market due to that it entered a bit late in the 1980’s. Therefore acquiring companies such as Dreyers which was established since 1928 was a good decision as it would offer them the experience. * The competitive situation ( Which was ) influenced Nestle to adopt the acquisition method. Since Unilever market shares were higher it would have been difficult for a new
As their main growth strategy Nestle used the acquisition method which is when the company takes the ownership of another company. Scholes(2008) This method might not always be as easy as it seems and could face direct failure, 70% of acquisition ends up with lower returns. As the biggest mistake organizations commits is paying too much for a company which might not have the resources or experience required.
Despite the chances of failure nestle has managed to succeed by doing its home work well, they knew who exactly to acquire and where. Between 1990 and 2000 they had acquired companies in around 30 countries. But in 2002 came the major acquisition which was with Dreyers, which is an American leading ice cream company. Nestle knew what were they doing they didn’t just acquire any company, but they chose companies which were leading in their markets such as in the case of Dreyers in North America and Movenpick in which is a German ice cream company nestle acquired it in 2003 and thought that it would be a good chance for improving its performance and growth and also it would help in its competitive position.(Nestle.com) Another successful decision was when they acquired Delta ice cream company which is a leading ice cream company in Greece and Bulgaria markets. By these acquisitions Nestle continues its growing process and becoming one of the leading companies in the ice cream market globally. (INVgr.com)
The reason Nestle thought of acquisition was due to a number of reasons such as :- * It wanted a quick entry to the ice cream market. Especially in the European market due to that it entered a bit late in the 1980’s. Therefore acquiring companies such as Dreyers which was established since 1928 was a good decision as it would offer them the experience. * The competitive situation ( Which was ) influenced Nestle to adopt the acquisition method. Since Unilever market shares were higher it would have been difficult for a new