,The international road to China for Nestle,Environment,Entry mode decision,Life circle,Introduction,Background,Distribution and promotion,Background,Nestle, (Henri Nestle) created in 1867 and headquartered in Vevey, Lake Geneva, Switzerland (Vevey) Nestle is a 138-year-old company originated in Switzerland In 2005, Nestle has more than 500 factories worldwide, 25 million employees and annual sales of up to 91 billion Swiss francs.,DIVISIONS OF THE COMPANY,1 Baby Foods 2 Breakfast Cereals 3 Chocolate &Confectionery 4 Coffee 5 Dairy products 6 Drinks 7 Ice Cream 8 In the Kitchen 9 Nestl Professional 10 Nutrition & Health 11 Petcare,main products : 1 :Nescafe,1Introducing freeze-dried soluble coffee with the launch of Gold Blend 2 Sustainable packaging:Finding the right materials. 3 A team work with sustainable agriculture,2 : Dairy Products,There are many essential nutrients in the Nestle milk products processing technology,Environment,Environment,PEST Analysis：A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors: Political/Economic/Social/Technological.,（1）Political analysis,Chinas top legislature approved the Food Safety Law. In 2001 Shanghai nestle research center was founded.,Preconditons and Risk,Preconditon : Chinas opening up policy was settled . Risk: The governent of China takes action to proctect national industry.,（2）Economic analysis,1、A certain level of purchasing power is directly affect the economic environment for marketing activities. 2、China high purchasing power provides a broad market space for Nestle to introduce a more secure, high-quality dairy products.（opportunity）,3、Threat: (1)Threat of New Entrants: 1)multinational brands 2)domestic coffee bean suppliers (2)Availability of Substitutes,（3）Social analysis,1、Changing lifestyles and growing urbanization in larger cities in China have brought in wider acceptance of newer products and the pursuit of higher living standards. 2、Nestle company could meet peoples demand for it. This provides the basis for Nestle to expand market in China（opportunity）.,3、Threat:Due to the influence of Chinese tea drinking customs ,some Chinese people still advocate to drink the traditional hot drink - tea.,（4）Technology analysis,1.With the development of science and technology, more and more Chinese people have a high demand for their dairy products. 2、The PRC government strongly supports the development of e-commerce in the retail sector. 3、 Nestle has two R & D centers in China, and fully guarantee the product quality and safety and innovation.So it offers an inexhaustible motive force.（opportunity）,4、China has rapidly developed in recent years, especially in the fields of technology and innovation,which have far more than many countries. Therefore,many high-tech domestic enterprises are emerging. Threat:Therefore this causes a great threat to the Nestle company in technology.,Market Entry Mode,Internal factors 1. Firm size 2.Control 3.International experience 4.Product complexity 5.Product differentiation advantage,Why does Nestle choose this mode?,External factors 1. Country risk / demand uncertainty 2. Market size and growth 3. Direct and indirect trade barriers 4. Intensity of competition,As to Nestle,1. Large-size 2. Diversification 3. International experience 4. Good quality, innovation and good design of advertisement 5. Chinese governments support 6. Large demand in China,Export Mode,Direct exporting minimal risks and investment to a specific cause acquiring exist sales channels in an unfamiliar market However hard to control, far from the target market, contracts can be troublesome, and currency risks use local materials and sell in the local market In 1908, set up sales agent in Shanghai,Intermediate Entry Mode,Licensing A seller allows its technology, trademarks, company name, design, processes, or intellectual property to be used by a buyer In the early 80s, begin to negotiate with Chinese government about investing to build factory in China, chansfer its technology to China,Intermediate Entry Mode,Joint venture share risks, costs, and management with a partner in a foreign country Since 1987, cooperate with Chinese government In 1990, set up the first Nestle joint ventureShuangcheng Nestle limited (双城雀巢有限公司) In 2000, cooperate with Taitaile Group(太太乐集团)and have 80% shareholding,Intermediate Entry Mode,Joint venture In 2001, sign a joint venture agreement with Haoji Group(豪吉集团), and have 60% shareholding Now, Nestle takes up a large market in China.,Entry Mode Decision,To sum up its Entry Mode Decision lays a solid foundation on its successfully marketing in China.,Consumer products：convenience products,Black coffee Instant coffee The source of raw materials in China,Nescafe in China,Top 3 sales volume in China (2010) Nescafe Maxwell house CafeMocha,The taste The package The price,“Good to the last drop”,Brand image The taste The package,T