Global Strategy for Nestle

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At the beginning of the 21st century, the world’s largest food and beverage company, Nestlé, decided to standardize their operations. This project named GLOBE (Global Business Excellence) Program implements a single set of procurement, distribution and sales management systems and processes worldwide. It aims at increasing consistency and efficiency on its business operation so that profit will increase. It sounds very tempting. However, because this program requires involvement and cooperation from every aspect of the company, the implementation of the GLOBE has encountered numerous challenges. The firm has 500 facilities in 200 countries. Each of them is allowed to conduct business in a way that suitable for the local situation. That means in order to choice a standard for even only one business process, they need to go through different types of methods. Along with different cultural and political differences, it is extremely time consuming for the standardization considering the amount of processes for the largest company in this field. Chris Johnson who was in charge of this program was given a deadline ending within three years. Moreover, there is a cap on how much the project can cost each year. The CEO needs to be realistic to spend money strategically on this project without affecting cash shortages on other program. This is going to slow down the implementation progress. Also, because after the standardization of business process and systems, every organization has to adopt the same way of doing their jobs, no matter where it is, what culture they have, and what methods they used for daily operation. The adjustment requires time and efforts, and the planning process needs to be very careful and thorough as one mistake might leads to very serious consequences.

The other aspect that Nestlé faced challenges during the standardization process is on the management. In order to standardize everything, market heads lost some of their power on controlling...
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