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Is Nestle A Model multinational firm?

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Globalization gives prominence to non-state actors and transnational networks that constitute and reclaim space. These players are characterized by their multiplication and diversification, so they are both international organizations, NGOs, firms or mafia networks. A multinational corporation is generally defined as "a company that made direct investments abroad, allowing it to own settlements through wholly or partly-controlled subsidiaries. They date from the late nineteenth century and were generalized in the early twenty-first century.

The majority of FDI takes place among industrialized countries. More than multinationals, these companies are transnational and tend to the largest enterprises to transform themselves into global-networks. From the economic point of view, the objectives of a multinational is to control the raw materials, always seeking new opportunities, and not being limited to internal growth, to ensure a market leadership.

It is evolving into an open space, which is more and more integrated and adapts its strategy to these changes. Examples of multinational firms are not plenty: McDonald's, Coca Cola, Renault-Nissan are some of them. They are synonyms for some consistency to American hegemony, while for others they symbolize an increasingly globalized market that is bringing in new opportunities.

The Swiss company Nestle, the world leader in the food industry, could be considered as a model of multinational firm. Since its inception in 1866, Nestle is facing out and the expansion is first European and then international. The investment strategy is to acquire new subsidiaries to be present on all continents. Thus the company became a full participant in the globalization, whose commitment is not limited to its business alone and which is sometimes confronted with other players such as NGOs.

In 1857, Henri Nestle, a Swiss architect and chemist, invented a powdered milk in order to feed the infant when the mother was unable to do so. This was one of the causes for infant mortality rates that were relatively high in those days. In 1866, H.Nestle sold this product, and thus began the journey of Nestle.

From this work, because of limited opportunities provided by Switzerland, the company had to make a move towards a larger scale, and in 1873 the product was first exported to Germany, England, Australia, the United States of America and Argentina.

In 1898 it opened the first industrial establishment abroad, in Norway (selected according to good economic conditions and relations with Britain) and in 1900 it opened in the United States, then in Britain and in 1905 in Spain. The industrial and commercial expansion of Nestle seems inseparable from its "essence" of its nature, making it an element of analysis relevant to understanding the future strategy of the company.

Tags: Nestle; model multinational firm; investment strategy

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