Nestle

Chapter 1

1.1Organizational Background:

Nestlé - the world's largest food & Beverage Company in terms of sales as well as product range and geographical presence. The key factor which drove the early history of the enterprise that would become the Nestle Company was Henri Nestlé’s search for a healthy, economical alternative to breastfeeding for mothers who could not feed their infants at the breast.

Nestlé began in Switzerland in the mid1860s when founder Henri Nestlé created one of the first baby formulas. Mothers who were unable to breastfeed often lost their infants to malnutrition. Henri’s product was a carefully formulated mixture of cow’s milk, flour and sugar. Nestlé’s first product was called Farine Lactee Nestle. Nestlé's first customer was a premature infant who could tolerate neither his mother's milk nor any of the conventional substitutes, and had been given up for lost by local physicians. People quickly recognized the value of the new product, after Nestlé's new formula saved the child's life and within a few years, Farine Lactee Nestlé was being marketed in much of Europe.

Henri Nestle showed early understanding of the power of branding. He had adopted his own coat of arms as a trademark; in his German dialect, Nestle means 'little nest'. One of his agents suggested that the nest could be exchanged for the white cross of the Swiss flag. His response was firm: "I regret that I cannot allow you to change my nest for a Swiss cross .... I cannot have a different trademark in every country; anyone can make use of a cross, but no-one else may use my coat of arms."

In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestlé's production had more than doubled. The 1920s also saw Nestlé's first expansion beyond its traditional product line. The manufacture of chocolate became the Company's second most...