Nestle - Global Strategy Case - 1650 Words

1.What is the company’s strategy with regard to business development in emerging markets? Does this strategy make sense? From the NESTLE : GLOBAL STRATEGY case, it can be seen that Nestle generally operates worldwide with the strategy of customization rather than globalization. It moves into consumer markets by using Niche market strategy to become the market leader in each of the niches. It mainly focuses on European markets, which make up 70 percent of its sales. As mentioned, these markets are in the mature state of the life cycle of that industry and also demographic changes such as the stagnation of population growth rate and slight decline in the food consumption have made it very challenging for companies like Nestle to generate†¦show more content†¦This is due to the fact that Nestle’s strategy is based on a broad range of local brand names which are not entitled as â€Å"Nestle†. The company uses this approach in order to reach the consumers easily as they are accustomed to those local brand names and they think they know what they are buying. Consequently, marketing is easier and less costly because a brand image, a distribution channel and customer loyalty already exists for that locally acclaimed product. As a result Nestle can focus its distinctive competencies on product improvement and technological aspects such as process innovation. Lastly, the key to Nestle’s success is customization rather than globalization. This has ensured its success so far. An example is Nestle’s success in the Chinese milk powder market. There was hardly any infrastructure, transportation system or product distribution channel in 1987 when the company entered the market. Nevertheless, Nestle increased the output of powdered milk from 316 tons in 1990 to 10,000 tons in 1994. These figures show the success of their flexible strategy by scanning the environment where they operate. Combining all these factors makes Nestle’s strategy a sensible and successful one. 2.How would you describe Nestlà ©Ã¢â‚¬â„¢s strategic posture at the corporate level; is it pursuing a global strategy, a multidomestic strategy, an international strategy, or a transnational strategy? A transnational strategy is an international business structure whereShow MoreRelatedUnilever V Nestle1235 Words   |  5 PagesToday we live in a global economy in which the time taken for people to move between continents has been significantly reduced and in which Internet and other connections make instant connections possible. Businesses and organisations now have to recognise that they now operate in a global market place and to develop appropriate strategies. A global strategy is an organisational plan that takes into account these new global realities. 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