Nestle Case Study
EXECUTIVE SUMMARY
The purpose of this report is to study, analyse and understand the various challenges Nestle faced during its conversion from a decentralized system to a centralized one.
This report focuses on a number of aspects:
• The inefficiencies of a decentralized system.
• Nestlé’s decision to launch a new initiative called GLOBE (Global Business Excellence) and its potential benefits.
• The challenges faced by Nestle and its team of 400 executives in trying to standardize its business process all over the world and implement the mySAP internet-based system.
• The strategies planned to overcome these challenges.
• Its eventual success.
This report will address 4 specific questions:
1. Analyse Nestlé using the competitive forces and value chain models. What challenges did Nestlé face?
2. What type of Global Business and Systems Strategy did Nestle adopt? Was this strategy appropriate for Nestlé’s business model?
3. What management, organization, and technology challenges did Nestlé have to deal with to standardize its business processes and systems?
4. What strategies did Nestlé management use to deal with these challenges? How successful were these strategies? Explain your answer.
In the conclusion, the report will summarize what we have discussed after reading the Case Study.
INTRODUCTION
Nestle is the largest food and beverage company in the world and has its headquarters in Vevey, Switzerland. It is best known for its chocolate, coffee and its milk products. For hundreds of years, Nestle has sold a number of products which have been adapted to fit local markets and cultures. Even the local organizations conducted their business based on the local customs and cultures. Nestle had adopted a more decentralized strategy. However, the management soon came to learn of the inefficiencies of such differences and decided to standardize their business processes and systems in all countries in the hope of minimizing costs and bringing a sense
The purpose of this report is to study, analyse and understand the various challenges Nestle faced during its conversion from a decentralized system to a centralized one.
This report focuses on a number of aspects:
• The inefficiencies of a decentralized system.
• Nestlé’s decision to launch a new initiative called GLOBE (Global Business Excellence) and its potential benefits.
• The challenges faced by Nestle and its team of 400 executives in trying to standardize its business process all over the world and implement the mySAP internet-based system.
• The strategies planned to overcome these challenges.
• Its eventual success.
This report will address 4 specific questions:
1. Analyse Nestlé using the competitive forces and value chain models. What challenges did Nestlé face?
2. What type of Global Business and Systems Strategy did Nestle adopt? Was this strategy appropriate for Nestlé’s business model?
3. What management, organization, and technology challenges did Nestlé have to deal with to standardize its business processes and systems?
4. What strategies did Nestlé management use to deal with these challenges? How successful were these strategies? Explain your answer.
In the conclusion, the report will summarize what we have discussed after reading the Case Study.
INTRODUCTION
Nestle is the largest food and beverage company in the world and has its headquarters in Vevey, Switzerland. It is best known for its chocolate, coffee and its milk products. For hundreds of years, Nestle has sold a number of products which have been adapted to fit local markets and cultures. Even the local organizations conducted their business based on the local customs and cultures. Nestle had adopted a more decentralized strategy. However, the management soon came to learn of the inefficiencies of such differences and decided to standardize their business processes and systems in all countries in the hope of minimizing costs and bringing a sense