Nestle Global Strategy

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Key learning’s from Nestle Case

Is there anything like the “first mover advantage”? This phrase has been discussed zillion times across boardrooms all over the world, but nobody knows what the real answer is. There have been times when the person entering first was able to create sort of monopoly. Whereas, in other cases, companies entering second had a bigger advantage. I am not sure which one is better but one thing I am pretty confident about is that thorough knowledge and preparation can nullify the importance of this phrase. As we saw in Nestlé’s case that the same strategy paid well when the company had done thorough research and brainstorming before putting its foot forward.

Following are the key learning’s from this case-

1). Value and strategy for Contadina pasta: For entering the pasta market, company acquired Lambert’s to make a quick fire entry. It provided it with a product, which has been tested and tried over the years. And then the different strategies of changed name – to make it sound authentic, distribution network – use of brokers for quick entry, bundling – for better quality control and Bases 2 – for thorough market survey helped the company beat its competitors in every way. The thorough analysis helped the company give better results than even its own expectations.

2). Move into new uncharted category - Pizza : After the overwhelming success of pastas, company moved into an entirely new domain. This frozen pizza segment was not tried by anybody before, not even by the smaller companies. But riding on the success of Pasta, management made some quick decisions to make sure that they again enter the market before Kraft. However, while making quick decisions, management didn’t go at length to research everything, which cost Nestle heavily.

3). Improper positioning : The pizza was improperly positioned between the fresh pizza and frozen pizza market. Although it was not a lot better than frozen pizza but still it...
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