For Dr. Larry Byrd
February 1, 2013
This paper will discuss Nestle’ concerning globalization and its HRM strategies. With instant coffee, baby food, and bottle water in the mix, Nestle’ crunches more than just chocolate. The world’s #1 food company in terms of sales, Nestle’ is also the world leader in coffee (Nescafe’). It also makes coffee for the home-brewing system; Nespresso. Nestle’ is one of the world’s top bottle water makers (Nestle’ Waters), one of the biggest frozen pizza makers (DiGiorno), and a big player in the pet food business (Friskies, Purina). Its most well-known global food brands include Buitoni, Dreyer’s, Maggi, Milkmaid, Carnation, and KitKat. The company owns Gerber Products and Jenny Craig. In addition to its own products, Nestle’ also owns approximately 30% of cosmetics giant L’Oreal. Nestle’ employs around 330,000 people in over 150 countries and has over 450 factories with operations in over 80 countries. Nestle’ is headquartered in Vevey, Switzerland and is the parent company to Nestle’ in the United States. Nestle’ has over 45,000 employees in nearly all 50 states.
There are several factors that affect the HRM of Nestle’. Some of these are discussed in the succeeding paragraphs.
Globalization impacts the company in the following ways:
The first impact of globalization is it will increase the opportunities to reap scale and scope economies. The development of exploitation economies is heavily influenced by technological progress. Economies will only materialize in markets where the demand fits well with either type of economies (Baumol, Panzar, and Willig, 1982). The second impact of globalization is it will increase the love for variety and taste convergence, implying larger peaks and expanded peripheries. The resource shapes in the food industry are said to change in two ways. That is, the literature on the development of demand for food emphasizes two seemingly opposite developments, global convergence and regional differentiation (Trail, 1997; Blom, 2007). On the one hand. On the other hand. Demand for differentiation is further enhanced by modern considerations of health and safety, as well as consumer worries about the environment. The consequence of all of this is an increasing ‘love for variety’ (Feenstra 2004). In many domains of the food industry, this trend is associated with much product innovation activity. In beverages, for instance, many new products have been launched in the 1990s (e.g., isotonics and wellness juice) and 2000s (e.g., fortified waters and drinkable yoghurts) (Blom, 2007). The third impact of globalization is it will increase market concentration in the food industry, from which a subset of the generalist food companies across the value chain will benefit. Globalization is likely to produce trend effects in the food industry. That is, overall, the food industry is expected to reveal a number of general trends. The first one is that, due to the average convergence of consumer taste, market concentration will probably increase. The final impact of globalization is it producers can get the benefit from the different cultures and cheap labors all around the world. Cultures impact the company in the following ways:
The first impact of cultures is diversity. Managing diversity-developing reasonable perspectives and plans on how to attract, retain, and fully utilize a new and diverse workforce is the critical challenge facing organizational leaders. The second impact of cultures is changes in cross cultures may entirely affect business practices of an organization, even despite the influence and guidance of its mother company. This is because the approach of each Nestle’ company is customer-oriented, and based on the needs, preferences, and tastes of its consumers. In this regard, the...