Nestlé Company was set up in 1867 by Henri Nestlé. In the beginning, Nestlé Company specializes in selling infant milk; which provide alternative for mothers who could not breast feed their infant. The value of the product was soon recognized, as it saved many children’s life. In 1905 Nestlé Company merged with the Anglo Swiss Milk Company by the Page Brothers. The merger provides the company with a broader product line. WWI provides the company with new demand in the form of government contract. After the war ends, consumer started switching the type of milk preference. Nestlé was able to respond quickly to the change of demand; thus giving them a very high advantage to stay competitive in the market. In 1920, the company decided to enter the chocolate market as their second most important production. Nestlé also did am unrelated diversification through their shareholding in L'Oréal in 1974. In the later year, Nestlé also focus their diversification in the ice cream market. The beginning of this interest shows in the year 2003 when the company decided to acquire Movenpick Ice Cream. Then, in 2005 and 2006, Nestlé bought 2 huge ice cream companies, Delta Ice Cream and Dreyer’s; making them the world’s biggest ice cream maker with a market share of 17.5%. These decisions further enhance Nestlé’s position as one of the world market leader in this product category. In 2007, Nestlé Company made a related acquisition and strategic alliance to improve the overall performance of the company. The first one is their acquisition of Gerber Products from Novartis AG. Although Nestle has a strong position and market power in baby food market in emerging countries, such as China and India, they do not have the same strong position in baby food market in the US. Acquiring Gerber product, which has around 80% market share in baby food in US market, allows Nestle to grab the market easier. The second one is their strategic alliance strategy which partner Nestlé...
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