Case Detail

Case Summary

Nestle Ice Cream in Cuba

Case Number: 5-315-504, Year Published: 2015

HBS Number: KEL919

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Authors: Russell Walker; Kyle Bell

Key Concepts

Competitive Strategy, Cross-Cultural Relations, Global Strategy, Globalization, International Business, Risk Management, Strategic Positioning, Cuba, Dairy, Ice Cream

Abstract

In 1996, as the Castro regime began welcoming limited international investment back to Cuba, Nestlé signed a letter of intent with the Cuban government to build an ice cream factory in Havana’s El Cotorro neighborhood. The plant, a joint venture between the Cuban government and Nestlé, would produce high-quality ice cream products for tourists and affluent Cubans.

Nearly twenty years after this decision to enter the Cuban market, it is not clear how successful the investment has been and what the future might hold for Nestlé on the island. Nestlé has faced important challenges in Cuba—such as supply shortages, entrenched domestic competitors, and risk of government interference—but there has been evidence of some marketing and financial success. The 2015 normalization of diplomatic relations may bring new strategic threats and opportunities as American companies begin to eye the Cuban market and current competitors prepare for market changes.

In the case, students will evaluate Nestle’s investment and strategy for future growth in the Cuban market and consider the company’s market entry strategy, operations, and finances.

Learning Objectives

After reading and analyzing the case, students will be able to:

  • Better understand the current and future market conditions in Cuba
  • Analyze strategies for overcoming operational and marketing challenges in new markets
  • Estimate financial results using limited data

Number of Pages: 15

Extended Case Information

Teaching Areas: Strategy

Teaching Note Available: Yes

Geographic: Cuba

Industry: Food

Organization Name: Nestlé

Organization Size: Large

Year of Case: 2015