The Ways Nestle Managed Its Environment Over Time
Nestle used different ways to manage its environment. It did this through expansion of the product offering, expansion of the customer base, and by developing lower-cost ways to make and sell products.
Early on, Nestle managed its environment by expanding into new markets, in both developing and emerging nations. As trade barriers fell, the CEO of Nestle Barbeck-Latmathe seized the opportunity and decided it’s the right time for Nestle to expand geographically into the developed and emerging markets such as those in Eastern Europe, India and Asia. By doing this, Barbeck drove Nestle’s performance dramatically, taking into consideration the massive number of potential customers in these regions and the enlargement in Nestle’s customer’s base.
In the 1990’s; Nestle managed its environment by acquiring other companies. The companies which Neslte acquired at that time included U.S. food companies Carnation, Buitoni Pasta, Ralston Purina, Dreyer’s ice cream and Chef America, the British chocolate maker Rowntree, the French bottled water company Perrier, and the Mexican food maker Ortega. It is noticeable that Neslte regards acquisitions and efforts at diversification as logical ways to supplement their business. Nestle only acquires food making companies, the business it has special knowledge and expertise in. After all, Barbeck’s intentions were to customize these products to suit the tastes of customers in different countries around the world as he was eager to enter other markets.
Later, Nestle managed the environment by increasing operating efficiencies. Barbeck made many decisions to achieve this and reduce the cost of managing global operations. These decisions included cutting the work force by 20%, closing 150 factories, designing a new streamlined operating structure and using advanced IT to increase the flow of information between Nestle’s food product units and all the countries in which it sells its products. Barkeck target was to speed up product innovation by leveraging Nestle’s expertise across its food businesses; to create more attractive food products that will increase Nestle’s global share. All these improvements reduced the operating costs by over 12%. Barkeck used advanced IT also to reduce the number of Nestle’s global suppliers and to negotiate for better supply contracts with them. It was fruitful and it resulted in a significant drop in purchasing costs.
Today, the environment is extremely different compared to the 90’s; customers tastes have changed dramatically. Health concerns have arisen, and people around the world are demanding healthier and more nutritious food products. In response to these changes, Barbeck came up with a new way that he calls “organic approach” that he claims will puts customers health and safety as its primes concern and will make Nestle the world’s leading nutrition, health and wellness food company recognized by customers.
Obviously Nestle is a very dynamic global company and is more like a lizard that keeps on changing its skin according to the requirements and in response to the changes in its environment and it has been successful doing so for the past 145 years of its life! How amazing!
Reasons for Nestle to Change Its Methods in Managing Its Environment
There is no doubt that the management strategy needs to fit the environmental situation if an organization wishes to be successful and continue to survive. Nestle didn’t just change from an expanded product offering to acquisitions because it was a new management technique, but rather they did this in response to the environment they were facing.

For instance, customers’ taste for food products has changed and having healthy and low fat food is a priority for the ever expanding health focused customers base stretching all around the world. This has created a new big market to address the new needs of customers. Obviously, Nestle noticed the trend and responded to this environmental change by offering a new and innovative products range of low fat and organic foods. After all, all organizations seek survival and to maintain that they have to respond to the continuously changing environment they operate in by meeting the every changing customer needs and seizing the opportunities that emerge without any hesitant.