Strategy and International Business: Nestle Case Study
Strategy & International Business
Assignment 3: Case 5.1 – Nestlé
MSc Strategic Management Strategy & International Business Lisa Chen Tessa Trlaja Sergey Sargin Putra Kostermans Martina Korudova Date: 9-10-2012 Words: 1578 336815 319268 353289 321976 331437
1
Strategy & International Business
Over the years, many typologies of multinational companies (MNCs) have been developed. As such, Bartlett and Ghoshal (1989) provided the most extensive typologies regarding MNCs. Besides, Harzing (2000) uses a different division of the multinational companies and separates them in relation to organizational design and subsidiary role, local responsiveness and interdependence. The identified types are: Multidomestic, Global and Transnational (Harzing, 2000). Multidomestic typology combines high national responsiveness and domestic competition, implying that the company responds to national differences and has a decentralized structure, although scores low on global competition and economies of scale. In contrast, Global typology characterizes high global competition, economies of scale, and low national responsiveness, as companies tend to build cost advantages through economies of scale. Finally, the Transnational cluster combines both typologies focusing on economies of scale as well as national responsiveness. Verbeke (2009) describes four archetypes of administrative heritage, namely the ‘centralized exporter, ‘international projector’, ‘international coordinator’, and ‘multi-centred MNE’ which regard to a specific routine of internationally transferring FSAs. In comparison to Harzing’s (2000) typology, these four archetypes of administrative heritage describe how a company’s FSAs are internationally transferred and its location advantages, while Harzing’s typology discusses the types of MNCs and its measurement to various elements. In 1986, Bartlett and Ghoshal
Assignment 3: Case 5.1 – Nestlé
MSc Strategic Management Strategy & International Business Lisa Chen Tessa Trlaja Sergey Sargin Putra Kostermans Martina Korudova Date: 9-10-2012 Words: 1578 336815 319268 353289 321976 331437
1
Strategy & International Business
Over the years, many typologies of multinational companies (MNCs) have been developed. As such, Bartlett and Ghoshal (1989) provided the most extensive typologies regarding MNCs. Besides, Harzing (2000) uses a different division of the multinational companies and separates them in relation to organizational design and subsidiary role, local responsiveness and interdependence. The identified types are: Multidomestic, Global and Transnational (Harzing, 2000). Multidomestic typology combines high national responsiveness and domestic competition, implying that the company responds to national differences and has a decentralized structure, although scores low on global competition and economies of scale. In contrast, Global typology characterizes high global competition, economies of scale, and low national responsiveness, as companies tend to build cost advantages through economies of scale. Finally, the Transnational cluster combines both typologies focusing on economies of scale as well as national responsiveness. Verbeke (2009) describes four archetypes of administrative heritage, namely the ‘centralized exporter, ‘international projector’, ‘international coordinator’, and ‘multi-centred MNE’ which regard to a specific routine of internationally transferring FSAs. In comparison to Harzing’s (2000) typology, these four archetypes of administrative heritage describe how a company’s FSAs are internationally transferred and its location advantages, while Harzing’s typology discusses the types of MNCs and its measurement to various elements. In 1986, Bartlett and Ghoshal