Peer-graded Assignment: Respond to the letter of an activist investor
PROMPT
You are working for Nestlé. Write a response to Third Point that you will not divest any business (other than possibly the US confectionery business) in the current circumstances. Your explanation should be plausible (not necessarily true). The response should not exceed 200 words.
Hello Third Point,
We appreciate your interest and concern about Nestlé's strategic decisions. We have judged that divesting any business, other than maybe the US confectionery business, would not be the best viable course of action at this time after thorough consideration of the existing conditions. Our selection is influenced by a number of things. To begin with, Nestlé has successfully diversified its portfolio over the years, allowing us to handle difficult market conditions and capitalize on emerging opportunities. We feel that having a varied portfolio of businesses ensures stability and reduces risk. Second, our global presence and large distribution network give us a competitive advantage in a wide range of businesses. We can continue to create growth across our businesses by utilizing our operational knowledge and brand recognition. Finally, consumers, stakeholders, and regulatory agencies have recognized and supported our continuous commitment to sustainability and responsible business practices. Certain corporate divestitures may imperil our progress in these areas, as well as the beneficial impact we have had on communities and the environment. While we understand your desire to optimize our portfolio, we are certain that our present strategy is optimal for Nestlé and its shareholders. We remain committed to providing long-term value and will continue to look for ways to grow and optimize within our existing business lines.
Sincerely,
Nestlé