Nestle: Organisational perspective
Organizational perspective
Nestle have been aiming for a more decentralized, transnational strategy by trying to branch out and reach a variety of customers from many different countries. Just 2 years after being open in Switzerland, they had already established foreign offices in London, which proves that even in the early stages it was already clear which path Nestle would be undertaking.
Partner, Merge and acquire
Heizer et al (2011) justifies Transnational strategy to be one such strategy that exploits the economies of scale and learning which entails gaining a cost advantage by increasing the output of a product and further clarifies that a company that would use such a strategy would, “combine the benefits of global scale efficiencies with the benefits of local responsiveness.” Nestle has created 7 worldwide strategic business units (SBU’s) and each SBU focuses on its own specific products but together they engage in acquisitions and market entry strategy among other strategies.
Acquisition has become a critical function for Nestle since two thirds of growth is owed to this process. Nestle will seek out potential opportunities to completely buy a company in a market or create a partnership with such a company. These opportunities will, “leverage existing brands that might populate the market” (lawteacher.net, 2009). These partnerships and buyout will assist Nestle to become the dominant force in a market as well as assist in the customization of products to suit the market needs. It will also be difficult for competitors to enter the market with Nestle with such a strong foot-hold. An example would be when Nestle merged with Anglo-Swiss condensed milk in 1905, thus extended Nestles product line.
The idea of transnational is said by Heizer et al (2011) to move material, people and knowledge across national borders. Nestle has created an “expatriate army” which consists of 700 managers that move around from one country to the next. This “army” transfer
Nestle have been aiming for a more decentralized, transnational strategy by trying to branch out and reach a variety of customers from many different countries. Just 2 years after being open in Switzerland, they had already established foreign offices in London, which proves that even in the early stages it was already clear which path Nestle would be undertaking.
Partner, Merge and acquire
Heizer et al (2011) justifies Transnational strategy to be one such strategy that exploits the economies of scale and learning which entails gaining a cost advantage by increasing the output of a product and further clarifies that a company that would use such a strategy would, “combine the benefits of global scale efficiencies with the benefits of local responsiveness.” Nestle has created 7 worldwide strategic business units (SBU’s) and each SBU focuses on its own specific products but together they engage in acquisitions and market entry strategy among other strategies.
Acquisition has become a critical function for Nestle since two thirds of growth is owed to this process. Nestle will seek out potential opportunities to completely buy a company in a market or create a partnership with such a company. These opportunities will, “leverage existing brands that might populate the market” (lawteacher.net, 2009). These partnerships and buyout will assist Nestle to become the dominant force in a market as well as assist in the customization of products to suit the market needs. It will also be difficult for competitors to enter the market with Nestle with such a strong foot-hold. An example would be when Nestle merged with Anglo-Swiss condensed milk in 1905, thus extended Nestles product line.
The idea of transnational is said by Heizer et al (2011) to move material, people and knowledge across national borders. Nestle has created an “expatriate army” which consists of 700 managers that move around from one country to the next. This “army” transfer