Nestlé Case Study
Did Nestlé undergo either first-order and/or second-order change according to the case?
Answer, listing examples of types of change from the above story.
From what I read the Nestlé company under went both the first-order and the second-order. In the First-order the strategic changes the company took string in 1900’s. The Swiss based company only sold its products through sales agents to outside countries. It soon changed its approach to global expansion by purchasing local subsidies in foreign markets. This changed maintained the companies’ goals and organizational purpose.
The next strategic change was during the WWI with the increase demand in dairy products. Nestlé took this opportunity to expand in the U.S. by acquiring several already established factories. The most important change affecting the expansion of Nestle was WWII. During this time there was a feeling of seclusion for Nestlé as it’s based of operations were in Switzerland. They started to move the executives from the home base of Switzerland to offshore markets. The U.S. move was part of Nestle strategy of increasing the efficiency and productivity of the company.
Second-order for change for Nestlé was in 1974. This is the first time the company diversifies its products by acquiring a cosmetic company, this was a transformation from the products of Nestlé. This acquisition alters the fundamental product line of the company. In 1974 the Nestlé Company became a major shareholder of the L’Oreal Company. Due to this choice Nestlé is still dealing with the consequences of the partnership. The company shareholders believed that Nestlé over extended itself financially with this acquisition and the debts that came with it.
The next venture in diversification of Nestlé was the acquisition of Alcon Laboratories Inc. a pharmaceutical company. Maucher continued to improve the financial situation of the company in the 80’s.... [continues]
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