Nestlé and Kraft's Transnational Way
Introduction
In order to dominate other rivals in the global fierce competition, a company operating globally needs to transform its initial mentality which might be international, multinational or global to transnational in order to pursue the goals of efficiency, flexibility and innovation and learning simultaneously. Furthermore, these goals can be achieved by economies of scale and scope and national differences.
Global Efficiency refers to the overall efficiency of a company can be regarded as the ratio of the value of their outputs to the value of their inputs, which means the company can increase their efficiency by reducing the costs or enhancing the revenue.
Multinational Flexibility mainly depends on the capability of a company to reduce the risks and leverage the opportunities, which may appear due to the diversity and volatility of the global environment.
Worldwide Innovation and Learning is considered as the vital factor to achieve both efficiency and flexibility. Four approaches, including centre-for-global and local-for-local innovation, locally leveraged innovation and globally linked innovation, are used by companies to win the competition in the global market.
Facts
Nestlé is the world’s largest food company based in Vevey, Switzerland. Headquartered in Northfield, United States, Kraft is the world’s second largest food company. In 2009, Nestlé has 280,000 employees while Kraft has 97,000. They challenge each other in global dominance in 3 sectors: beverages, convenient meals, snacks. Nestlé has a “Good Food, Good Life” ambition, which emphasizes nutrition, health and wellness. Kraft responds to Nestlé globally by “making today delicious”.
Nestlé’s initial motivation for globalization was resource and market seeking as domestic market potential and resources are restricted. Kraft’s primary motivation for global expansion was to exploit new market based on its advanced technologies and abundant resources in the US. Additionally,
In order to dominate other rivals in the global fierce competition, a company operating globally needs to transform its initial mentality which might be international, multinational or global to transnational in order to pursue the goals of efficiency, flexibility and innovation and learning simultaneously. Furthermore, these goals can be achieved by economies of scale and scope and national differences.
Global Efficiency refers to the overall efficiency of a company can be regarded as the ratio of the value of their outputs to the value of their inputs, which means the company can increase their efficiency by reducing the costs or enhancing the revenue.
Multinational Flexibility mainly depends on the capability of a company to reduce the risks and leverage the opportunities, which may appear due to the diversity and volatility of the global environment.
Worldwide Innovation and Learning is considered as the vital factor to achieve both efficiency and flexibility. Four approaches, including centre-for-global and local-for-local innovation, locally leveraged innovation and globally linked innovation, are used by companies to win the competition in the global market.
Facts
Nestlé is the world’s largest food company based in Vevey, Switzerland. Headquartered in Northfield, United States, Kraft is the world’s second largest food company. In 2009, Nestlé has 280,000 employees while Kraft has 97,000. They challenge each other in global dominance in 3 sectors: beverages, convenient meals, snacks. Nestlé has a “Good Food, Good Life” ambition, which emphasizes nutrition, health and wellness. Kraft responds to Nestlé globally by “making today delicious”.
Nestlé’s initial motivation for globalization was resource and market seeking as domestic market potential and resources are restricted. Kraft’s primary motivation for global expansion was to exploit new market based on its advanced technologies and abundant resources in the US. Additionally,
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