Nestlé Sa: Nutrition, Health, And Wellness Strategy

Nestlé has been a household name since I was growing up, and they are still one of the largest food companies in the world. This may be due to their strategic management and strategies focusing on their long-term growth. In 1997, Nestlé and their then-CEO, Peter Brabeck envisioned Nestlé to be the leading nutrition, health and wellness company in the world, and from there, they were able to develop a strategy that focused on their long-term growth and lead them to continuously develop their company, provide quality and diversity in their products while also maintaining a growth in sales and net profits.

Guided by their vision of being an industry leader, Peter Brabeck created a division specifically for strategic business to help them towards becoming a nutrition, health and wellness (NHW) company. Brabeck displayed himself as a strategic leader by creating this division because this was a major first step in his goal for the company, and in creating this division, it shows the dedication and commitment that Nestlé had towards achieving their goals. This allowed for more focus on research and strategy implementation that would work towards their vision, such as acquiring Powerbar, an energy and nutrition bar maker, which was a significant first move for the company that allowed them to step away from food and beverage to becoming more nutrition focused. Following this, Nestlé then started to work on a new unit, Nestlé Nutrition which was a consolidation of other existing nutrition divisions, signaling a furthering of their commitment to their strategy.

Nestlé continued to grow and acquire different nutrition and health brands giving them a competitive advantage in the industry. While there are many competitors in the NHW industry, Nestlé was able to acquire brands that were leading in their own industries, expanding on Nestlé’s presence in these industries, and also growing their research and development department to further innovate and improve in their healthcare nutrition. For example, their acquisition of the Medical Nutrition of Novartis allowed them to increase their share in the market to 25% and also acquiring their management team with a pharmaceutical background that would help their innovation in healthcare nutrition. Nestlé also acquired Gerber baby foods from Novartis that lead Nestlé to increasing their nutritional food sales and becoming a leader in the industry. By focusing strictly on health and nutrition within the food industry and providing such a large variety of products, Nestlé was able to maintain their competitive advantage and lead the industry. While Nestlé’s strategy involved large acquisitions in the different health and nutrition industries, they also focused a lot of their resources in the research and development department. In order to become the leading NHW brand, they would need to continuously develop and innovate their health products backed by science and research in order to gain consumer confidence and competitive advantage over competitors.

I believe the research and development played a huge role in developing and transforming the firm, with over 5,000 employees and investments of about $2 billion each year.