RISK MANAGEMENT

Risk Management

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Table of Contents

Nestle Background & Overview3

SWOT analysis5

Nestlé's Risk Management Approaches6

Insurance and Business Risk11

Providing Security:11

Distributing Risk:12

Source for Gathering Funds:12

Encourage Savings:12

Alternative Risk Management Techniques13

References16

Risk Management

Nestle Background & Overview

Nestle (or 'the company') is the largest food and beverage company in the world. The company's products include beverages, milk based products, ice creams, prepared dishes, and pharmaceutical products. Nestle operates in Europe, the Americas, Asia and Africa.

Nestle (or 'the company') was established in 1866, by a pharmacist, Henri Nestle, as a producer of food for babies who were unable to be breastfed. The first product from Nestle was called Farine Lactee Henri Nestle. With infant milk forming the backbone of its expansion abroad, the company was operating factories in the US, the UK, Germany and Spain in early 1900s. In 1905, Nestle merged with the Anglo-Swiss Condensed Milk Company and was known as Nestle and Anglo-Swiss Milk Company. In 1907, the company began manufacturing in Australia, and warehouses were built in Singapore, Hong Kong and India to supply rapidly growing Asian markets (www.nestle.com).

Nestle's primary operating segments are divided into three geographic zones and four globally managed businesses.

The three geographic zones are Zone Americas, Zone Europe, and Zone Asia, Oceania and Africa.

Zone Americas comprises of the operations in the US, Canada, Latin America and Caribbean regions. Zone Europe includes the company's operations in Central, Western, and Eastern Europe. Zone Asia, Oceania and Africa include the company's businesses across Asia-Pacific, Africa, and Middle East. The company's major product divisions in these regions includes powdered and liquid beverages, milk products and ice cream, prepared dishes and cooking aids, confectionery, and pet care products (www.nestle.com).

Apart from these geographic divisions, the company's four globally managed businesses include Nestle Waters, Nestle Nutrition, other food and beverages, and pharmaceutical products.

The Nestle Waters division produces and markets bottled water under Pure Life, Aquarel, Acqua Panna, Vittel, and Vera brand names among others. The division operates nearly 100 production sites in 36 countries and offers a portfolio of 64 bottled water brands (www.nestle.com).

Other food and beverages division primarily includes Nestle Professional, Nespresso and food and beverages joint ventures managed on a worldwide basis. Nestle Professional is a globally managed business offering Nestle's branded products in international market.

The milk products and ice cream division offers diary-based products. The milk products division produces powdered milk, yoghurts and desserts among others. Its popular brands include Coffee-Mate, Nido, Carnation, and La Laitiere. The ice cream business division offers products such as ice cream tubs, waffle cones, and ice cream bars. The company key brands in this segment include Haagen-Dazs, Movenpick, Extreme, and Dreyer's.

The prepared dishes and cooking aids division includes frozen and chilled, culinary and other businesses. Its popular brands include Buitoni, pasta and sauce ingredients; Herta, packaged meals; Hot Packets, frozen sandwiches; Lean Cuisine, low-fat packaged meals; Maggi, noodles, soups and seasonings products; Stouffer's, frozen entrees and side dishes; and Thomy branded mayonnaise, mustard, dressings, sauces, oils, and spreads. This division also includes the breakfast cereals business of Nestle that produces ...