Nestlé S.A. is a Swiss multinational food and beverage company headquartered in Vevey, Switzerland and it’s largest food company measured in the world. Nestlé’s origins date back to 1866. Their product includes baby food, diary products, bottled drinks, cereals, snacks and ice cream. It is the most astronomically immense food company in the world quantified by revenues. In September 1867, in Vevey. Henri Nestlé started with a milk-based baby food, and soon began selling it. Daniel Peter begin seven years of work perfecting his invention in the milk chocolate manufacturing process. In August 1866, Anglo-Swiss Condensed Milk was established and this is where their history begins and today Nestle has became a world leading food company. Nestle remains the quality and nutrition of their products. Nestlé and other corporations engender a good standing relationship with the countries’ regime for the future of their corporation.

The rise in IT consuming which concerns the sale of hardware, software, machineries, and related internal and external services has improved the efficiency of distribution and production between the seller and the consumers. It also contributed to the enhancement of IT systems of companies, especially those who operate in an industry that deeply rely on technologies. And Nestle is definitely one of them. In appeasing local and government laws and regulations in different countries, economical factors like rates of inflation and exchange play a very important party in foreign relationships with the country. Nestle can estimate whether how to maximize their profits after understanding the employment costs, country’s currency exchange and taxes by understanding the specific country’s rates in employment, inflation and currency exchange. Thus Nestle will achieve much benefits in investing into these technologies. Technology can cut down the sorts of variable and fixed cost and also being very efficiency of the production of products and other aspects internally for the organization. On the other hand Nestle also collaborates with local government to provide better technical assistance and machineries to local farmers in growing and harvesting crops. This would be a win win situation because the farmers will get income and Nestle will also get to purchase goods and raw materials to produce their food in lower cost. BY having this Nestle should no longer needs to import any raw materials from other countries. For example Nestle is currently planting their own chilis in Kedah, Malaysia in order to produce Maggi Sos Cili in much lower cost. By having own local productions will also benefit the consumers because consumers could enjoy local productions with low price. More consumers will use Nestle’s products therefore they will gain more profit from that.

Not only corporations have to follow the laws and regulations of their origin country, they are also required to follow the laws and regulations of countries they’re doing business in. Nestle is one of a very good example. It operates and sells their products in almost every countries. In each and every country Nestle is operating in, they are required to follow and regulate every laws and regulations being set down by the government of the country. Let’s say every country have different perspective and different religion rules against food. For example Muslims are Halal and they are not allowed to consume pork and any alcoholic products. Thus Nestle can’t produce such products in Muslim country like Malaysia. Not only that, whatever products being consume by the Muslim consumers are required to go through Islamic Development Malaysia (JAKIM) is to make sure the products are safe to consume by Islam consumers.

Being socially responsible is one of Nestlé’s greatest responsibilities. Especially in light of the Nestlé boycott in 1977 by the Infant Formula Action Coalition. (Nestlé) With the many products Nestlé produces for every region worldwide, they produce the products specifically suited towards the regions and according to the countries regulations. As well, Nestlé produces countless brands marketed to certain demographics. Nestlé failed to be socially responsible in the 1970s, pushing out their infant formula products and to discourage breastfeeding. This action led to a worldwide boycott towards Nestlé for encouraging formula over breastfeeding and failing to factor in the living conditions of third world countries. (Baer) For example, most third world countries do not have clean water while the infant formula requires it. Even though Nestle is a leading food industry, it still shares its knowledge and proficiency with local small either medium companies. This helps entrepreneurs to compete in new free trade market which will definitely benefit the industry and economy by making the market growth
When a multinational corporation expands to a new country, not only do they determine if the market will produce any profit for the company, they look to the political factor to see if the company will be able to function effectively under the countries’ government. Respectively the factors, regulatory and political, coincide with one another. Expanding to a new country, a corporation or Nestlé becomes knowledgeable of the laws, regulations, social and political aspects, and of the benefits that the country’s government and its population can provide before deciding to expand.
In the market or industry factor, Nestlé distributes some of their products to other companies, some being their competitors in certain countries, for these to later distribute to countries they primary have their markets in. Giving competitors the ability to help distribute Nestlé’s products to other countries can lower production and operation costs, such as wages, packaging, and marketing. As well as, producing affiliations with the competitors, being able to learn from their competitors and use their local country advantage in marketing their products in a market they are trying to reach.

Political issues are one of the major concerns for the company to operate in the country. Political status in many countries that Nestle entered is belongs to stability although there are existence of different language groups and cultural regions. With the political stability in the market, Nestle can actually maintain the sales or even boost up the sales, as the stability will actually bring economic growth, therefore, the consumer purchasing power will eventually growth due the improvement of living standard. For example, Nestle can actually enjoy the tax benefit compare to most countries of the EU and USA and can be enjoy by Nestle is the company can actually deduct the taxes from the income as an expense that relatively lower effective tax rate compare to most other countries where the taxes are not deductible