Nestle Globalization Analysis

Globalization is defined as a “process involving a fundamental shift or transformation in the spatial scale of human social organization that links distant communities and expands the reach of power relations across regions and continents.” 1 One significant contributing factor of globalization is the rapid growth of multinational companies. These companies have greatly shaped the regime of international politics and economy. Nestlé, since its establishment in 1905, is considered one of the most recognizable brands in the world. This company is a paradigm of how multinational companies contribute to the process of globalization.

Firstly, I would present an overview of the company. Founded in Vevey, Switzerland, Nestlé has now expanded to

The foundation of Nestle was set by the merger of the Anglo-Swiss Milk Company. Since then, it has acquired over 8,000 brands, with big brands like DiGiorno, Purina, and Dreyer’s. By having so many famous brands under its umbrella, Nestle has been able to engage in horizontal integration, which is defined as “the process of a company increasing production of goods or services at the same part of the supply chain” 6. First established as a milk producing company, Nestle now expands its market from medical food, confectionery, pet foods, etc. to cosmetics, being one of the main shareholders of L’Oreal 7. Such rapid expansion proved to be profitable as Nestle was listed number 1 in the Fortune Global 500 in 2011 8. Patricia M. Goff emphasized the impact of big companies merging when she talked about the merger of Time Warner and America Online. This merger was particularly eventful as it built the foundation of “synergy” 9. The synergy strategy aims to build layers of markets in order to exploit cultural properties in many ways. Nestle’s “consumption web” is growing larger by the minute. The web proves to bring great profit to company, yet it is leading to monopoly on the market. For example, Nescafe is one of the most famous coffee brands on the market, and it remains the same in Vietnam, the second largest coffee producing country10. The Swiss coffee brand does not concern

The company has been largely criticized and boycotted for using child labor in its supply chain. African families have reported to being “trafficked from their homes” and forced to work on the company’s cocoa plantations in Ivory Coast 12. Nestle has been making promises and signing protocols to cease the offence, yet 15 years later, it was again reported by the Fair Labor Association13. In addition, the company’s attitudes towards organized labor were among the worst in the labor community. Workers who attempted to organize labor reported to have been threatened with firing and physically intimidated. Nestle also have multiple facilities located in nations with lax labor laws like Colombia, North Korea, and China14... This allows the company to avoid having its practices being